On Tuesday night, the council voted to ratify a new contract with the Davis firefighters that would extend for three years. It passed by a 3-2 vote amid questions about process and about the actual savings derived from the agreement.
Davis City Councilmember Lamar Heystek along with fellow colleague Sue Greenwald were the dissenting votes on the fire contract on Tuesday. The Vanguard had a phone interview with Councilmember Hyestek Thursday night to talk about the vote, the implications of the contract, and what the future will bring on a fiscal front.
1. What is your biggest concern about the contract that was approved for the firefighters?
The biggest problem that I have with the contract is that it does very little to address our structural challenges in any meaningful way and it sets the tone for the contracts that we are poised to consider and adopt in the very near future.
There are some issues that are specific to the Davis Firefighters Association and there are some issues that are not necessarily specific only to that group. Issues about pension and retiree medical. There is also the issue of union bank hours and overtime. But on both fronts, the issue that is specific to that bargaining unit and issues that that bargaining unit faces, that are also confronted with the other labor groups, those issues were not addressed in a significant way.
The council apparently decided to take the bait on short-term salary reductions that begin increasing once again in a matter of six months. And so on paper, an outside observer might think that we’re reaping some kind of significant fiscal benefit, when it has been demonstrated that from the first year to the last year, the decrease is minimal to none given the fact that PERS rates are going to be going up and that we are continuing to cover the medical, we’re covering PERS, we’re covering the medical benefits.
So the one thing that really concerns me on a macrolevel is that it sets a tone for contracts that are yet to come. But if you want to get more specific about what concerns me, the fact that we continue to do business the same way with DFFA as we’ve done before. It’s not clear to me that this moves the ball in any changes as to the way they do business.
In fact, we’ve put more money into the department without making any changes in the way they do business. Like the battalion chief’s model. That model is going to end up costing us more and those cost projections do not take that into account.
2. Long term what issues does it fail to address?
The retirement benefits for new hires, union bank hours, overtime, retiree medical for existing employees, the overall increased cost to the department when there are fewer people in the department, the list goes on and on, so it’s not just about one particular thing, it’s about the package of all those things.
Cafeteria cash out, much has been about the fact that they are giving us 80%, that’s obviously in the right direction. The question whether its far enough in the right direction to make it worth our while. Like I said during open session, we talked a lot about cash out and there was a lot of talk about what we would like for the cash out to be, the level. So there isn’t an argument–I don’t argument with my colleagues that they don’t want the lower cash out, or the other structural changes, but the degree to which we are willing to drive that bargain, that was questionable to me.
It’s been said during council discussion that we would like to do more, but we can’t. The question is what makes us think this is something we can’t do that we were able to do with another group. In other words, we decided to declare impasse with DCA and I don’t the answers about why we did with them and not with other groups were very good.
Things that concern me the most are those things that some of us would trust future councils to go farther on. The issues of vesting or new hires, retiree medical benefits, the sharing in the decrease in PERS rates, etc. All these things, we tell that we are going to give them a letter and tell them this is what our thinking was and this is what we would do in the future. There is nothing to guarantee that any of us will be on a future council to effect any change. So when we say that we’re going to have to count on future councils to continue and carry the torch, I can’t as much as I’d like to trust people who are following us to do that kind of work, there’s nothing that guarantees that they will do that. In fact, as we continue to play politics with certain bargaining groups, the prospect that we will drive a harder bargain will be less.
The time was now for structural change. I really believe that the moment was now and we’re not nearly where we should be or where we need to be.
3. What are your concerns down the line for the other contracts?
The lines on furlough days is troublesome for me because those things will only last in the contract, those are permanent things to recover costs unless we make it a policy for now on that we’re going to do some kind of reduction in city services that would necessitate the closure and non-operation of services and programs. My concern is that we’re going to be looking at more of the same. I think with the impasse with DCA, I think that is something that we should have considered with the other groups if we were more serious about structural reform.
What concerns me is that were rushing to recover some savings. As I said in my remarks, it is important to have dollar savings. I can certainly understand the urgency with which other councilmembers are willing to get something nailed down ASAP. But, if that’s your singular goal of saving as much money in the current fiscal year as possible, then I think that’s penny wise and pound foolish. Why would we save a few dollars when the real issue is how are we going to save on a systematic basis in the future.
The number that concerns me is $42 million, how are we going to ask for greater cost-sharing there. I’m not saying that everyone has to take a vow of poverty to work for city government, but we have to recognize that it is being done in not just private organizations within our community but also the public agencies. Comparatively, working for the city of Davis, even after any of the reductions, adjustments, or cost-saving measures, is still a great career path. I’m just concerned that we’re not going to make a debt in that $42 million number. We can continue to set aside taxpayer money in the general fund and other funds, but greater cost-sharing for retirement is really the key. That’s retirement in pension and in medical.
The cafeteria cash out, taking money for benefits you don’t take, I’m not against taking a small amount of cash for a benefit you don’t take, because it does save the city money and we’re willing to pay to save a greater amount of money. But to pay an equal amount and to use that are your take home pay, and to be a cost-basis for compensating people forever more, I think that’s something that will plunge us into greater financial debt.
4. What does the city need to do to get its fiscal house in order?
We need to get tougher with our bargaining groups. We need set higher standards in our negotiations. We need to be focused on demonstrating fiscal responsibility for the taxpayers so that when we ask them to continue supplementing the city’s coffers with either sales taxes or parcel taxes. When we ask them to do that, we need to demonstrate that we deserve that kind of supplemental support. To get our fiscal house in order, the council needs to be united in backing higher goals. And we have not been united in backing higher goals. We have, I believe set our sights too low.
It begins with the council leadership in setting higher standards for fiscal responsibility. I don’t doubt that there are several aspects in the contract that move us in the right direction. In other words, we’re not taking several steps back in every aspect of the contract, but in some respects, we’re not moving at all on anything that long-term. In this fiscal environment, if we stand still, we end up losing ground at a future point.
It really depends on the council leadership and it also depends on what the community expects for fiscal responsibility. If the community doesn’t show up to ask that councilmembers act on their behalf, then there isn’t a lot of political pressure. We filled the room on whether or not people could put their yard-clippings in bike lanes on city streets. We filled the room there. I don’t doubt that’s an important issue for many in our community.
But I feel that when we’re adopting contracts, tens of millions of dollars, in size, that people should take some tangential interest on how it affects the city’s long-term financial future. I just feel that people don’t realize how the city’s finances affect their lives personally. They’re not even really aware about how it affects their lives when it comes to utility rates and even property taxes. Much of our community is made up of renters, and when renters don’t get the property tax bill or the utility bill, there is a lack information that they receive with regards to how much it really costs to live in the city of Davis. I think people need to put more pressure on the city council.
5. What impact does the short-circuiting of discussion by the mayor and the council majority have on this process?
I think any shortening of the discussion means that we don’t discuss all of the facts. As I said during my remarks in open session, the only discussions we’ve ever limited ourselves in terms of time have been about closed session topics such as labor agreements. And when we don’t give ourselves the time to discuss behind closed-doors and in front of the public we don’t make the best decisions. Even if councilmembers have heard what has already been said behind closed-doors, I think it helps when those facts and those things are said out in the open so that the members of the public can be aware. Some of the things that we heard before have not necessarily been heard by our community. When we don’t allow for a free discussion of those facts, that means our community becomes less aware. When our community is not privy to the information that we’ve discussed and heard before, then the community cannot be expected to apply any pressure in one direction or the other to improve the outcome of our discussions.
I don’t think we should set a precedent for limiting discussion on items of this magnitude because it is not a one-time decision. It’s not a decision that once you make it, you execute or implement it and then you don’t have to think about it. We have to continue to think about this decision each and every year. Each time we budget for the city, we have to think about how these contracts affect the bottom line.
Democracy, open discussion, and transparency, can often be inconvenient to a process. If our singular goal is the expedite a process, yes, I totally agree that free discussion, transparency, and sunshine are not good. But for the sake of democracy, transparency, and sunshine, we have got to let a little bit more light in when it comes to our labor agreements.
Once we do this again next time we should do an outside negotiator, we should maybe have a thirty day sunshine period and I don’t know if there is consensus for that. But that’s too late for the decisions that we have an impact on now. I think that most of the councilmembers sitting right now might not be around for those next discussions, so why say leave it to others to make these decisions. That strikes me as a bit hypocritical.
If I were the mayor, I would not have sought to cut out discussion. I noticed that some may be able to question more freely than others and some questions may be more rhetorical than others. I would just hope that everyone has a chance to say what they want to say.
6. How should we improve the process in the future?
I would say, getting the Finance and Budget Commission involved, having a thirty day review period, building that into the process and not being afraid to consult an outside negotiator. The administrators who are making programmatic decisions about that the effect the bargaining unit aren’t also making labor agreements with them. It becomes a very difficult thing to do when you’re dealing with those two different sets of issues. So outside negotiator and a thirty day waiting period would help.
I just wanted to add that I don’t think that anyone involved is trying to act in a way that’s nefarious. Whether the best judgment is being exercised is one thing. Everyone has his or her own point of view. I reserve my right to disagree strongly with my colleagues. But I hope that we don’t take that political disagreement and turn it into a personal animus. I’m afraid that when we have these very difficult discussions that’s what can happen and what has happened. People want to say that this is personal and it’s not, there is nothing personal about it.
—David M. Greenwald reporting
The City of San Francisco has allowed these unaffordable contracts for a long time and their budget is not close to being workable. The residents with jobs are fleeing.
http://www.sfweekly.com/2009-12-16/news/the-worst-run-big-city-in-the-u-s#Comments
Councilmember Heysteck spoke like a statesman and not a politician here. Most of his suggestions make sense to me, but I am skeptical about whether they can be implementated. I am also less charitable about the motives of some of his colleagues. This quote in particular is interesting:
“It really depends on the council leadership and it also depends on what the community expects for fiscal responsibility. If the community doesn’t show up to ask that councilmembers act on their behalf, then there isn’t a lot of political pressure. We filled the room on whether or not people could put their yard-clippings in bike lanes on city streets. We filled the room there. I don’t doubt that’s an important issue for many in our community.”
Lamar is saying two realy important things here:
1. We need better leadership. I do not want to put words in his mouth, but the Mayor is our leader and her leadership has been dreadful.
2. People need to realize how important this issue is and vote accordingly. Showing up to meetings is nice but voting in a new City Council majority is even better. We need to connect the dots forfolks and show them the connection between camapign money and fiscal irresponsibility.
[i]We need to be focused on demonstrating fiscal responsibility for the taxpayers so that when we ask them to continue supplementing the city’s coffers with either sales taxes or parcel taxes. When we ask them to do that, we need to demonstrate that we deserve that kind of supplemental support.[/i]
Words of wisdom from Lamar Reagan Heystek: Davis has a crummy government that doesn’t deserve our tax dollars.
I think you are misconstruing his statement there. He’s suggesting that we ought to demonstrate that we are using taxpayer resources wisely, that’s very different from Reagan arguing that Government was the problem–Lamar very much believes that Government can be a solution, but part of that means we have to spend our money wisely or we help no one.
Lamar crossed the line from warning us about a taxpayer revolt to buying into one. This cause is indeed a mixed marriage of Nader and Reagan.
I’m not following your reasoning here (nor buying it).
I don’t think there is necessarilly a contradiction between being a fiscal conservative and thinking government can work, though the two do not tend to go together. It should also be pointed out that Reagan increased the federal governments share of GDP (Clinton reduced it) and it wasn’t just defense spending.
We should all demand that government spend out tax dollars wisely regardless of our other political views.
Is anyone in favor of government waste (other that the special interests who benefit)?
It is also interesting that the two most “progressive” CC members, Sue and Lamar, are also the ones most concerned about our budget.
I too think that more can be done. I am very pro-labor, and Lamar was a shop steward when he belonged to UFCW, but what I fear is that the firefighters and others can be short sighted in terms of their own interests and the interests of the community. Destroying the fiscal health of the city is bad for everyone. As cities go into bankruptcy they are going to abrogate all of their labor contracts. There is also the question of fairness vis-a-vis other city employees, and the folks working non-professional jobs in the city. Frankly I think Sue’s suggestion that cash back for those opting out of health care should be set at 25% is very generous – it works out to $4,500. Personally it saves the city money to provide some incentive for folks to opt out, but I think that we need to reaffirm that the basic goal is to provide health care and not just and addition to salary.
I do not believe that the firefighters could garner a lot of public support for their compensation package, particularly if we are saying that we won’t reduce pensions already promised, only those going forward (if firefighters don’t like two tier, they could negotiate a solution with the city for a common pension benefit that would save comparable money.)
Public employee unions are necessary, but they are also in a unique position of negotiating with policy makers that they can help get elected, and with managers who almost always get the same as what they negotiate. They need to be constrained in their greed or there will be a significant and indiscriminant backlash, much like that attempted by the Governor when he attempted to eliminate all defined benefit pensions for public employees..
David: First, after Reagan was elected, he could no longer consistently say that the government, which he then led, was “the problem”. Instead, he would argue that we needed to cut “Congress’s allowance” to improve its spending habits. In that sense, this business with the sales tax renewal is a Reaganite pushback against the city government.
Moreover, Lamar is a main advocate of not renewing the sales tax. It is disingenuous to warn people of fiscal collapse, and then try to bring it on with tax cuts. It means that the real point is not sustainability, but to prove that every cent from taxpayers is sacred. This is also a Reaganite principle. After all, no one will file for bankruptcy from a half percent sales tax.
[i]Is anyone in favor of government waste (other that the special interests who benefit)?[/i]
I’m against jerking the city around with inconsistent accusations and warnings. For instance, if fiscal health is the problem, then DACHA should never have happened.
[b]LAMAR: [/b] [i] “We need to be focused on demonstrating fiscal responsibility for the taxpayers ….” [/i]
[b]GREG: [/b] [i]”Words of wisdom from Lamar Reagan Heystek … “[/i]
Calling Lamar’s [i]fiscal responsibility[/i] language Reaganite could not be further from the truth in an empirical sense. Reagan inherited a small budget deficit and turned that into (for the time) huge amounts of debt. Reagan, as president, was anything but fiscally responsible. (Arguably, the blame goes to the Congress, since they really control the purse strings. But it was our massive overspending on the military* as requested by Reagan which caused most of the deficit spending in the 1980s.)
*I have never bought the notion that our massive overspending on the military won the Cold War. It was irrelevant.
My read of history is that Soviet Communism was always a terrible economic system; and that over the decades everyone living behind the Iron Curtain was growing (on a relative basis) poorer and poorer. When Gorbachev came into office, he knew their economic system needed to be opened up; and in doing that and easing up on the brutal repression in Eastern Europe, the entire system of repression — that is, Soviet imperialism — came apart. It needed an iron fist to hold it together. Gorbachev released its grip. And that ended 70 years of hell. Insofar as Reagan’s policies deserve any credit, it was his classical liberal economic policies, which freed up our economy, allowed the U.S. economy to grow at a faster pace, and thus helped separate our quality of life from that on the wrong side of history.
[quote]It is also interesting that the two most “progressive” CC members, Sue and Lamar, are also the ones most concerned about our budget. [/quote] My take is that those two also care the most about delivering all the services that government can deliver and that the people of Davis would like delivered. I don’t think that is fiscal conservativism*; it’s fiscal responsibilism. Insofar as the City of Davis is not responsible for spending its money wisely, it will not be able to provide many of the services we are paying for. Lamar and Sue, I am sure, want the City of Davis to have the money available to do things like provide Community Transit for disabled people. But if we give, for example, an $18,177.76 a year cash out to 25 year old firefighters making a salary (with OT) of about $100,000 a year, soon enough we won’t be able to provide such services. We won’t be able to repair broken sidewalks or to fill potholes. If you ride a bicycle on the terribly maintained Howard Reese Memorial bike path, you know the city is not able to keep up with all of its service obligations. If you ride your bike to West Sacramento, you know, for example, that it would be much safer if the Dave Pelz overcrossing connected to the old Highway 40 bike path. But because of our fiscal irresponsibility, there is no money to pay for that connection. And you know that if we continue down the fiscally irresponsible path we have been on for about 15 years — where, for example, we have added about a dozen new top management positions, all of which make base salaries over $100,000 a year — just about every service provision in the City, including police and fire — is going to be much worse.
*A fiscal conservative doesn’t just believe in balancing the budget. He believes in less government. Liberals like Sue and Lamar believe Davis needs to use our money wisely so government can do more and more. But if we are irresponsible, Davis will pay the same in taxes but get less and less. (I would also add, having spoken with Sue countless times, that she has a strong bias in favor of not making Davis too expensive for older, poorer residents who cannot afford endlessly higher utility bills. That, arguably, is fiscal conservativism. But it is not a bias in favor of cutting taxes on the rich — or on Rich.)
Rich:
That’s a pretty good summary of their position and mine as well. My major concern is the provision of services by the City and as compensation costs rise and are unsustainable that is harmed.
My opposition to the sales tax is that if we are misusing people’s money or wasting it, I’m not going to continue to ask them for it so we can continue to waste it.
By the way … in case anyone who reads this blog and reads the Enterprise is interested, I have responded to the letters to the editor published on Wednesday which attacked my column on the severely mentally ill. You can read my response here ([url]http://lexicondaily.blogspot.com/2009/12/at-least-they-are-reading-my-column.html[/url]).
Because these attacks are repeats of the 2007 attacks — one of which in 2007 came from David Greenwald for my use of politcally incorrect language — none of them surprised me. But I do find the writers, most of whom describe themselves as “psychotherapists” and none of whom are medical doctors or speak for psychiatrists*, entirely disingenuous. They have a strong ideological bent; and that seems to cause them to make incorrect inferences as to my motivation and my position.
*It is my understanding that psychiatrists on the whole favor changing our laws so that patients with severe disorders can legally be held and treated against their will, even if they are not deemed to be an “imminent danger.” Moreover, speaking as a family member of a patient with severe paranoid schizophrenia, I am quite certain that all families which have a loved one who is not receiving treatment because the patient “chose” to go off his medications believe exactly the same as I do. …. Yet if you read the letters to the editor againt me, you will note that they claim to speak for “mental health professionals.” I doubt their credentials. They don’t know what they are talking about. They don’t have the education that psychiatrists have. I don’t make any claims as to my expertise in medicine. My call is for a change in the law. The same change in the law that I understand most psychiatrists favor.
I’m still not in agreement with you, but I didn’t find it offense like I did your 2007 piece.
[quote]My opposition to the sales tax is that if we are misusing people’s money or wasting it, I’m not going to continue to ask them for it so we can continue to waste it. [/quote] I think that is a good argument for not having passed the tax in the first place. I argued in vain against passing it when we did. However, I don’t see how a No vote now will help the City of Davis. I think the result will be one which scares me: Many dozens more city employees will be laid off* and the provision of services we will get worse. I think the more responsible answer is to elect more responsible members of the City Council.
*In his comments on Tuesday night, Don Saylor talked about how he did not want to cut out the cash-out provision by more than 20% because these firefighters have mortgages and they need the money because they have such obligations. I understand his point. But does not that apply to the people who work for the City who in a few years will be laid off and lose 100% of their (lower) incomes? I see this as a parallel to the DTA. I understand why they did not want their members to lose a portion of their pay. But I don’t understand why they think a good trade-off is for a some to then lose ALL of their incomes. I think that is far less fair and far less decent.
Rich:
How about the people who are going to have their water rates doubled or tripled? It seems a selective argument and we are talking about people making $120,000 or more in pay.
In terms of the tax, the original thinking was to force the council to deal with the fiscal issues. It is conceivable that if we defeated the tax (unlikely) that the council would have to address the fiscal issues in order to come back with a broader coalitions to pass it. In reality, it’s a symbolic measure of protest against the current problems.
For the record (and see above) I did not state that Sue or Lamar were fiscally conservative and I would agree with many of Rich’s comments above, though this blog today seems to be bogged (or should I say blogged) in semantics.
My main point is that many of our Council members need to go as they are not fiscally responsible. To me that is a necessary condition to be a CC member.
AS far as the sales tax issue, I agree with Lamar’s logic. One should give the City a chance to get its house in order. Having failed to do that, extending a tax increase only give the City a chance to waste more taxpayer dollars. If the City does not get its fiscal house in order, there will be a reckoning and it would be better to do it before raising taxes. Its seems clear that this City Council will not deal with the City’s issues and plans to kick the problem down the road to the next fiscal year. That is what one should expect from most politician’s these days (regardless of party) but I hope (and still expect, perhaps naively) more from Davis.
[quote]I’m still not in agreement with you, but I didn’t find it offensive like I did your 2007 piece.[/quote] I’m disappointed you don’t agree with me.
As you know, I find the idea of letting people who are severely sick with mental problems live on the streets or being locked up in prisons for their “crimes” [i]offensive[/i]. I find the civil libertarian attitude most offensive of all. And yes, I find anyone who gets side-tracked by the use of non-PC language offensive. The crisis is not our language. The crisis is for folks who are not getting proper psychiatric treatment. Apparently, that matters far less to some “psychotherapists” whose larger concern is about perceptions of prejudice, which they have wrongly branded on me.
I am more worried about cases like this one ([url]http://lexicondaily.blogspot.com/2009/12/set-to-be-executed-mental-patient-didnt.html[/url]), where we are executing the mentally ill whose “crimes” would never have occurred if we stopped listening to the civil libertarians.
I’ll flesh this out more when I’m not trying to type one-handed, the former system of institutionalization was a form of tyranny. We could probably add more safeguards than we had prior to thirty years ago, but I still question our ability to protect the rights of individuals, we don’t do a great job in the criminal system. I’m also extremely reluctant to put people away based on what they might do based on some notion and prejudicial preconception about mental illness.
In short, I agree with you that we need to help individuals get treatment, I agree that allowing them to live on the streets or being locked up in prison is a problem, but I’m not with you on the solution.
Rich: to tie this back into this piece, I think Lamar’s comment, “Democracy, open discussion, and transparency, can often be inconvenient to a process,” applies here as well. Democracy and the protection of rights under the law are inherently inconvenient and at times dangerous, but necessary.
[quote]the former system of institutionalization was a form of tyranny.[/quote] There were some bad hospitals in the 1950s and before. Most of the problem was that we lacked good treatment options back then. However, today, pharmacological advances have relieved that problem for most severely ill patients. It is the exception when the meds just don’t work. But medicines that are not taken never work. And the problem with putting seriously mentally ill patients in charge of their care and not allowing their families any power to force them to take their meds is that VERY OFTEN they spin out of control and no one can legally do anything until it is too late. [quote] … I’m also extremely reluctant to put people away based on what they might do based on some notion and prejudicial preconception about mental illness. [/quote] That, David, sounds to me like the same spin as the psychotherapists who are attacking me in their letters to the Enterprise. I have much more faith in medical doctors than I have in them. Board-certified medical doctors don’t make serious decisions based on “prejudicial preconceptions about mental illness.” That is just ACLU nonsense.
Problem is you still need a system of adjudication and despite your expressed confidence in doctors, they often do not act quite so honorably in the court system.
Just for the record, you guys are waaaaaaay off topic.
Maybe Rich would consider reposting his blog response on the Vanguard?
Yeah guilty Don. It’s Friday (that’s my poor excuse for being a bad role model).
I think WDF has a good idea or I can post a response to Rich’s op-ed.
[quote]Maybe Rich would consider reposting his blog response on the Vanguard? [/quote] No. I linked it in this thread. It really doesn’t belong on the Vanguard. I appreciate David’s generosity in not removing my link. I doubt many Vanguard readers will care to read my reply, but I hope a few do. It is repetitive and overly long, because I replied to everything the three letters said. …
FWIW, it bums me out that I cannot write a letter to the editor myself. I don’t want to use my biweekly column for that, since I don’t want to go on too much on any single topic*. I think the fact that I get 800 words and they only get 300 makes my doing so indulgent and unfair. I had my say. They had theirs. I think they were unfair in their criticisms of me — suggesting I am antipathetic to the mentally ill when in fact it is just the opposite — and I think they are wrong about the entire issue surrounding people with severely debilitating psychoses because these people are not looking at the issue from a realistic perpective like I do, because I have had personal experience trying to get a very sick relative help, only to realize over and over and over again how broken our system is and how helpless such people are because of the civil libertarian approach.
*I do, however, have a thought as to one more column on this topic. I have a few relatives who are psychiatrists; and through them I am hoping to get in touch with some local M.D.’s who will share with me their views on how broken our system is in dealing with many people with severe mental illness. I will then try to write a column based on what real experts have to say. (Also, I have read a couple of great books, both mentioned on my blog reply, which give the psychiatric view of this terrible situation. It’s just a ####ing shame that the folks from NAMI who wrote in to attack me never acknowledge how broken our system is for the severely ill, but instead focus on this side issue of “stigmatization,” which is all a lot of lefty PC nonsense.)
I would like to weigh in on two key issues. The first is that the firefighter contract in year 3 (fiscal year 11/12) only saves the city .82% over baseline (fiscal year 08/09). Given that the firefighters make far more than most other employees, given the city’s structural gap and unfunded liabilities, and given the fact that other public sector employees who live live in Davis will probably have given up far, far more by fiscal year 11/12, I feel that the firefighters have not done their share.
Second, I would like to talk about the cafeteria cash out. The cafeteria cash out is a highly unusual benefit which has allowed city employees with a spouse who has coverage to use their spouse’s coverage and take home as cash the cost to the city of medical and associated insurance. This means that some employees have been taking home $18,000 in cash over and above their pay and overtime.
This benefit is not even fair among employees. Some have spouses who are not covered by good health insurance programs, and they do not enjoy this benefit. I have even received e-mails from employees asking me to do away with this benefit on the basis that it is unfair.
This cash-out costs the city a mind-boggling $4 million dollars a year. At the same time, we have a mind-boggling $42 million unfunded retiree health liability which will start becoming due in only about 10 or 12 years. This unfunded liability is a train wreck in the making.
We could probably maximize savings to the city by cutting the cafeteria cash out to 25% of medical benefit costs, and my instituting a co-pay for family coverage that is equal to the co-pay charged by other public agencies. We could replace that co-pay dollar per dollar with a salary increase. This should give adequate incentive to maximize city savings.
We could probably save a staggering $3 million dollars a year by reducing this unusual and very unfair benefit. That $3 million per year could be put into a dedicated fund to pay off the $42 million unfunded retiree health liability. This would actually benefit employees tremendously, because it would assure that the money would be there to pay their health insurance cost when they need it most, which is in extreme old age when inflation has severely eroded their pensions (younger folks don’t realize that medicare alone does not provide adequate coverage for those with real health problems).
I argued tirelessly in closed session to make the needed cuts in the cafeteria cash out, but got nowhere.
Sue , why is Bill Emlen not being asked to take a pay cut or give up benefits ?
The answer is he should be, but he signed his contract before it became clear how bad things got. He should take a 5% paycut just to be fair, but in the scheme of things that isn’t going to change much. Principally, you have a good point.
Are the vested council members will to give up their lifetime medical benefit?
Are they aware that the cafeteria benefity is almost 33% of an entry level parks workers take home pay? Without it they would make about $36,000 a year. Try raising a family on that in this town.
Is it true that the cafeteria pay was negotiated for, by the city, in the mid 90’s as a way to remove retiree spouse’s from medical coverage?
If this is the case, why haven’t our city leaders prepared for the absence of funding that an inevitable financial downturn would create?
Why is it when times are good we can’t find enought projects to spend on (toad tunnels, bike tunnels, bike paths, swimming pools, theaters, dark skies, etc.)?
Why is it when times are bad we blame those responsible for maintaning these assets for our impending doom (bargaining groups)?
I have read about the backlash to the Firefighters contract. Did they not give up things that the city had agreed to on previous contracts?
Was this city manager part of those negotiations?
Were the firefighters working without contract for 6 mos?
Are there other groups working without contract for that same time?
Is there on group who has been without contract for almost 1.5 years?
If so, why aren’t we negotiating with them first?
What about the Police Dept.? Are we negotiating with them?
Should we blame our finicial crisis on the workers that our city has negotiated with, and agreed to pay these “fluffy” benefits to, or should we blame those responsible for maintaining the finances, those balancing the books, those paying the bills for our short falls?
Is it my fault that I did not save for a rainy day, or my gardener’s?
Please answer which questions you may.
“Should we blame our finicial crisis on the workers that our city has negotiated with, and agreed to pay these “fluffy” benefits to, or should we blame those responsible for maintaining the finances, those balancing the books, those paying the bills for our short falls?”
Lamar’s answer: “We need to get tougher with our bargaining groups. We need set higher standards in our negotiations.” He puts the blame squarely with the council. Can you find a single quote from Heystek that places the blame on the workers.
Likewise Rich Rifkin after the vote on Tuesday reiterated his view:
“My view has always been that every working person or person who is represented by a union has every right to ask for all he can get in a negotiation. The question is Davis is why the other side, the City Council, has for many years not fully grasped the idea that their job is to push back, to try to get the best deal possible for the taxpayers, the ratepayers and the people who depend on city services.”
I concur that the fault is not with the stars but with ourselves. The public is not paying enough attention on this issue, the council is not bargaining hard enough, and the workers are advocating for their own interest but we have no one advocating for the voters/ taxpayers interests.
So yes, I fully agree.
Part of the problem that I have with the high level contracts for the fire department is that it leaves many of the other bargaining groups SOL.
Oh, and why are we spending money for air monitoring, to do a study, and conduct a poll, so we can ask our neighbors not to use their fireplace?
Really? I mean I am all for the environment, but come on. How much of a waste of time, money, and resources is this? Are we not in a budget crisis?
[quote]Are they aware that the cafeteria benefity is almost 33% of an entry level parks workers take home pay? Without it they would make about $36,000 a year. Try raising a family on that in this town. [/quote] There is almost no profession in which it is “easy to raise a family” on an entry level salary. The problem in the city budget is not primarily one of how much we pay parks’ workers. The far greater problems are with the high number of people we have costing the city coffers north of $100,000 a year. That said, parks workers in Davis (who don’t need a college degree, let alone an advanced credential) do BETTER than public school teachers. A PMW2 makes in 2009 $51,500 in base salary, a city pension contribution of roughly $10,000, a health benefit of more than $18,000 and a handful of other benefits (such as life insurance, etc.). In total, not counting any overtime, that is close to $80,000. That pales compared to a firefighter. However, it’s better than almost all Davis school teachers; and it is (I guess) four times the income of private landscapers who maintain privately owned gardens in Davis. In other words, don’t cry for our parks workers. [quote] Is it true that the cafeteria pay was negotiated for, by the city, in the mid 90’s as a way to remove retiree spouse’s from medical coverage? [/quote] I have no idea. However, that makes no sense. It is not retirees who are cashing out their cafeteria benefits. It is current employees. [quote] If this is the case, why haven’t our city leaders prepared for the absence of funding that an inevitable financial downturn would create? [/quote] Your question is a non sequitir. But your notion that the city was unprepared for a downturn is correct. There are two reasons the city is in such bad fiscal shape right now: 1. The recession is extremely bad. No matter what the city had done over the last 5-6 years, we would be hurting in this economy. It is made even worse because the state controls funds coming to Davis; and 2. The city council in 2005 approved huge pay hikes for many city workers — most extremely the firefighters at 36%. If the council had been more tight-fisted from 2004-2008, we would not have been in this much trouble in 2009-2010. But we can’t undo what was done. [quote] Why is it when times are good we can’t find enought projects to spend on (toad tunnels, bike tunnels, bike paths, swimming pools, theaters, dark skies, etc.)? [/quote] Those projects are not big ongoing expenses in general. The real big expense is the cost of paying our labor force. [quote] Why is it when times are bad we blame those responsible for maintaning these assets for our impending doom (bargaining groups)? [/quote] No one should be blaming the workers. The blame goes to the people we have elected who gave the workers too much money. It is not the workers’ fault or the fault of their unions. They were doing the best for themselves that they could.
[quote] I have read about the backlash to the Firefighters contract. Did they not give up things that the city had agreed to on previous contracts? [/quote] They got a 36% pay hike in 2005. They gave back 4% of their salary rate, which probably will amount over the next 3 years, when you account for benefits, to a 1% increase in total compensation. They did not give back — and they were not told by this city council majority that they had to give back — any of the other egregious perks they get paid for. For example, firefighters get paid at their full salary rate for sleeping 8 out of 24 hours. Federal law allows agencies to not pay them anything for that or for the time they are eating meals. They are scheduled to work only 10 days in each month. But they get 14 paid holidays a year, which is twice the average number of paid holidays given to the average private sector worker who goes to work 5 days a week, 50 weeks a year. Veteran firefighters also get 20 more days of paid vacation each year. That is equal to 2 months of work for them. On top of that they get generous amounts of sick leave, whether they are sick or not. The healthy ones normally will get huge cash payouts at some point for their unused sick leave. Also, our 46 union firefighters are paid by the taxpayers for 1,104 hours a year for not working for the city of Davis, but instead working for their union. And the firefighters also get to retire at almost full pay (90%) when they are still young men, only age 50. They did not give back any of that. They essentially own our city council; and the deal they struck proves that. They have a great leader in Bobby Weist. [quote] Was this city manager part of those negotiations? [/quote] Yes. [quote] Were the firefighters working without contract for 6 mos? [/quote] No. The old contract expired June 30, but its terms continued in full. [quote] Are there other groups working without contract for that same time? [/quote] No. All groups operate under their last signed agreement. One labor group has been under an expired deal since July 1, 2008. [quote] If so, why aren’t we negotiating with them first? [/quote] The negotiations have been ongoing with every group at the same time. However, the firefighters were the first to strike a deal. [quote] What about the Police Dept.? Are we negotiating with them? [/quote] Yes. However, their current contract does not expire until June 30, 2010. [quote] Should we blame our finicial crisis on the workers that our city has negotiated with, and agreed to pay these “fluffy” benefits to, or should we blame those responsible for maintaining the finances, those balancing the books, those paying the bills for our short falls? [/quote] Neither. We should blame those who make the policies — our city council. [quote] Is it my fault that I did not save for a rainy day, or my gardener’s? [/quote] Yes.
“Those projects are not big ongoing expenses in general. The real big expense is the cost of paying our labor force. “
I think it’s something like 71% of the general fund (maybe Sue can correct me if I’m wrong) goes to employee compensation. The vast majority of the budget balancing however has occurred through cutting services to the public.
However, I don’t see how a No vote now will help the City of Davis.
If the Bush and the GOP-controlled congress during his first six years in office had stayed true to conservative principles of fiscal responsibility, assuming Democrats still won the 2004 and 2008 elections and dominated the executive and legislative branches today, might we be experiencing even higher deficit spending than the extraordinary trillions spent by the Obama Administration and the Pelosi and Reed-controlled congress? Might we have a large number of new and expanded social programs and larger government agencies? Just consider that even in the face of out of control federal spending Congress is trying to ram though an expensive healthcare bill and they just approved a massive annual budget that increases the average agency budget by significantly more than the CPI, and many by double-digits.
Our nation, our states, our cities, our families and our people have reached a state of selfish fiscal denial that seems to me to indicate a need for greater economic pain. I will vote no on every tax increase until I get the sense that the majority of voters and the politicians they elect demonstrate true ownership for the results of budget-breaking overspending. Apparently the pain is not yet severe enough, so we need to lay off more city employees and reduce services until enough of us are truly impacted and outraged.
[quote]I will vote no on every tax increase until I get the sense that the majority of voters and the politicians they elect demonstrate true ownership for the results of budget-breaking overspending.[/quote] I don’t see a continuation of the city sales tax as “a tax increase.” [quote]the pain is not yet severe enough, so we need to lay off more city employees [/quote] That is what will happen. However, those who are laid off — for the most part — will not be people whose compensation packages are the heart of the problem. [quote] we need to … reduce services until enough of us are truly impacted and outraged[/quote] If and when that happens, I would expect the voters in Davis to respond by raising taxes even higher than they are today. That is what happened with the school district. They raised their employee salaries at too rapid a rate and then ran into budget troubles (before the economic downturn). So they said they were going to have to cut all sorts of programs, unless the voters of Davis passed Measure Q. And so the voters of Davis passed Measure Q. And we (probably permanently) have substantially higher school taxes.
[i]Our nation, our states, our cities, our families and our people have reached a state of selfish fiscal denial that seems to me to indicate a need for greater economic pain.[/i]
It’s the flagellation philosophy: We deserve the economic pain, in fact we deserve even more.
Some say that type II diabetes is a disease that we should try to cure. Others says that type II diabetes is a useful punishment to deter the sin of gluttony. I’m a softie who takes the former view.
I don’t see a continuation of the city sales tax as “a tax increase.”
True, but it is also an opportunity to correct a past mistake.
Some say that type II diabetes is a disease that we should try to cure. Others says that type II diabetes is a useful punishment to deter the sin of gluttony. I’m a softie who takes the former view.
Well there is that troubling question about personal responsibility. Too much sympathy can be enabling for destructive behavior. Who loves more: the person willing to state the truth and hold another human to some reasonable level of performance and behavior that will assist with long-term well-being, or the person prone to giving sympathy and unconditional acceptance for resolvable faults… that, if not corrected, would lead to greater and faster destruction? I’m sure we need a hybrid approach to optimize outcomes considering there are always going to be chronically weak players… however, let’s stop celebrating weakness excused or masked by some other protected malady.
Like Rich points out, we move to sympathy for the laid off teachers which is the byproduct of the previous inability to have done the right thing, or a weakness for implementing the current correction. A real and honest correction to solve real root-cause problems has a long-term benefit that is much more “right” than the artificially prop-up garnered by short-term sympathetic actions. It is the classic “pay me now or pay me later” argument. We have allowed so may “pay me later” actions, that we are fully leveraged. However, we don’t seem to understand the relationship between spending and debt unless we get some shock therapy.
A person that experience a near-death experience finally recognizes previous mistakes and gains a new perspective for how to live a more healthy, honorable and responsible life. We need a fiscal near-death experience… and the sooner the better.
In my humble opinion.
Let me go on the record to say this as clearly as I can … I have long been against diabetes.
[i]Well there is that troubling question about personal responsibility.[/i]
Personal responsibility is a fine consideration. If we could hypothetical tie part of health care premiums to restaurant purchases instead of to employment, the menu at McDonald’s would instantly change into something completely different. Either that or they would immediately file for bankruptcy. I have no problem with the concept of personal responsibility.
But collective economic punishment is bankrupt economics. It may be true that too many Americans want to live in McMansions. It may be true that many are libertarians when it comes to taxes and socialists when it comes to spending. But wanting economic pain for the whole country — what does that accomplish? Is it so that we can all assure St. Peter at the Pearly Gates that we led frugal lives? Maybe what makes me different from some people in the discussion is that I don’t believe in an afterlife.
Besides, if the government ever told me that I deserve economic pain because I’m not frugal, then I would first ask about the centimillionaires who often endorse this “advice”. Our car is an actual car, not a private jet. We do not have a household staff, and we do not travel with an entourage. I also know how many houses we own, ONE, thank you very much.
[quote]Our car is an actual car, not a private jet. We do not have a household staff, and we do not travel with an entourage. I also know how many houses we own, ONE, thank you very much. [/quote] Such deprivation!
Such deprivation
I need to clearly state that I am fully against deprivation. I want everyone to enjoy as much as they can justly earn. I also don’t automatically associate a lack of deprivation to depravity… unless you are Tiger Woods.
what does that accomplish?
A reasonable future for our future generations.
[i]I also don’t automatically associate a lack of deprivation to depravity… unless you are Tiger Woods.[/i]
For reasons that are not entirely clear to me, Tiger Woods has become a punching bag of not only the tabloids (as you might expect), but also the right-wing media. Although after one Internet check, maybe it is not so unclear after all. “Prediction: Obama to Undergo His Own Tiger Woods-Type Unmasking,” says Rush Limbaugh. That’s some amazing non-linear logic there; what in the world do Tiger Woods and Barack Obama have in common? (think think)
But Tiger Woods does serve to make the point that it’s stupid to think that rich people are better people just because they’re rich. People generally understand that Senators aren’t better people just because they’re Senators, even though it often takes hard work and skill to make it to the Senate. With centimillionaires it’s a little different. There is a mentality out there that we should all live to make money, and we should admire those who succeed.
In fact, before Tiger Woods became a scandal, he was held up as an example why California has such bad tax policies: Wonderful people like Tiger Woods go live in Florida instead. I personally couldn’t care less where Tiger Woods lives. But I agree that a state’s tax base should be something that can’t relocate to another state with the stroke of a pen, like houses.
[i][It accomplishes] a reasonable future for our future generations.[/i]
Except when it doesn’t. It is a basic principle of economics that if we all sit around and be frugal forever, we’ll just tighten our belts and lose our jobs for nothing. There has to be some inflation, not too much but some, to keep the economy moving. If you don’t believe that, try playing Monopoly without collecting $200 when you pass Go.
What I hand in mind was Andrew Mellon’s statement to Herbert Hoover that he should liquidate the economy to get Americans to live a “more moral life”. That was keen advice from a Treasury Secretary who probably owned ten mansions, five yachts, and for all I know a Turkish harem.
But to be fair to the old zillionaire, he also said that it was not fair to tax earned and unearned income at the same rate; earned income should be taxed less. (I just learned this from Wikipedia.) If only they were taxed at the same rate now! Somewhere along the way, the government started to tax earned income [b]more[/b] than unearned income.
[quote] If only they were taxed at the same rate now! Somewhere along the way, the government started to tax earned income more than unearned income. [/quote] The reason earned income is taxed so heavily in the highest brackets is because the government can get away with it. Investment income is far more mobile and fungible; and thus, if the tax rates are set too high, the income producing investments will run away. And when that happens, you make everyone poorer.
[i]The reason earned income is taxed so heavily in the highest brackets is because the government can get away with it.[/i]
Actually, Rich, you have it backwards. First off, earned income isn’t taxed “heavily” in the US by either Western standards or historical standards; it is just taxed more than unearned income. And the reason that unearned income is taxed so lightly, moreover with massive loopholes that could be closed in one day, is that the American investor class can get away with it. They are an incredibly powerful group of people.
To give you an example of how powerful, the investor class doesn’t just include actual investors. It also includes investment managers, and employees with stock options, who never risked a dime of their own money. It would be sweet if I could be paid with shares in UC, Inc., instead of with plebian salary.
Frankly, each time I hear about the threats from these people to hide their stash so that it can’t be taxed, when I’d go to jail for doing the same thing with my paycheck, I get a little angrier than the time before. I understand that it can’t be helped at the state level. But at the national level, all it would take for the federal government to put an end to these scams with Swiss banks and Caribbean islands is the will to do it. Switzerland, at least, is starting to cooperate. Even so, if you’re a politician who pushes too hard at this, you’ll lose half of your campaign contributions. Also Fox News will associate you with the anti-Christ, on issues that have nothing to do with taxes.
“Prediction: Obama to Undergo His Own Tiger Woods-Type Unmasking,” says Rush Limbaugh. That’s some amazing non-linear logic there; what in the world do Tiger Woods and Barack Obama have in common? (think think)
Ummm… They’re both men?
Amazing. I remember when Rush Limbaugh gushed over Tiger Woods as a conservative role model.
what in the world do Tiger Woods and Barack Obama have in common
Similarities: Both are celebrities. Both are role models. Both have college degrees from prestigious universities. One has a history of outstanding accomplishments; the other has zero outstanding accomplishments except being elected President. One is a tremendous risk-taker; the other lets others take the risk. One has lied to his wife and cheated on her. One has lied to his constituents and cheated on them. Both are narcissists. Both are doing a lot of apologizing these days. Both are spending too much money for stupid reasons.
But Tiger Woods does serve to make the point that it’s stupid to think that rich people are better people just because they’re rich
Define what you mean by “better people”. I have never heard that claim. I have, though, heard them called “wealthier people” from time to time.
the investor class
What is that? It is another term I have never heard. I have a 401(k)… am I part of the investor class?… That would be swwuuwweet!
[quote]First off, earned income isn’t taxed “heavily” in the US by either Western standards or historical standards[/quote]It sure is by historical standards, unless you are just looking very narrowly at the post-WW2 period. Historically — that is, all of human history up to 1918 — income was rarely taxed at all, and the share of government revenues to entire economies was closer to 10%. Today, government is magnitudes larger than it was for almost all of human history. And taxing marginal income at 45.3% (the highest bracket in California, including federal income tax) is to my mind ridiculously high. And of course, all taxpayers directly or indirectly pay many other taxes in addition to what they lose in income tax.
But my point about fungibility still holds. If you tax investment such that it is no longer profitable relative to other investments, the investment dollars (and the capital gains taxes) will dry up. Money goes wherever the profits are. Most workers earn income where they reside.
* “That said, parks workers in Davis (who don’t need a college degree, let alone an advanced credential) do BETTER than public school teachers. A PMW2 makes in 2009 $51,500 in base salary, a city pension contribution of roughly $10,000, a health benefit of more than $18,000 and a handful of other benefits (such as life insurance, etc.).”
I fail to see how not needing a college degree or an advanced credential should some how make it okay to have your pay cut. I do agree that our teachers need to be better compensated, but your comment makes me believe that you are an elitist.
A PMW2 makes between $40,340.77 – $49,034.34 Annually. They see non of the city pension contribution until they retire, that goes to PERS, plus I believe a significant portion of that contribution is actually made by the employee, but I could be wrong. Plus if said employee has a non working spouse, two dependent children, and no other insurance, the $18,000 is out the window. The life insurance (about $30,000) only kicks in if the employee is killed on the job, which happens a little more often than teachers.
I agree with many of your opinions, except I don’t think that employee wages and benefits are the problem. Having too many workers that make close to and over $100,000 is a problem, especially when these positions are uneeded (Ever hear of the Public Works Utility Division?). The saying “Too many chiefs, not enough indians” applies to both Parks and Public Works.
Every city’s greatest expenditure is labor costs. Every city’s income is based on taxes. This city has survived on property taxes and an inflated sales tax rate because of it’s desire to maintian it’s small town atmosphere. We prevented tax generating business from coming here for too long. What other city has a popular vote to see if a store can be built. Imagine what kind of crisis this town would be in had our propety values gone down 40% like Woodland or West Sac? Instead of trying to reduce the pay of the the men and women that fight fires, stop crime, provide us with water, repair our roads, and keep our parks beautiful, let us endeavor to make their departments more efficient and less top heavy. Let us try to find ways to increase our tax revenue, while not raising taxes.
I think it’s something like 71% of the general fund (maybe Sue can correct me if I’m wrong) goes to employee compensation. The vast majority of the budget balancing however has occurred through cutting services to the public.
Please list the services that have been cut.
“Those projects are not big ongoing expenses in general. The real big expense is the cost of paying our labor force. ““
Over $3,000,000 on a bike tunnel to farmland is not a big expense? How much did is cost to remodel Slide Park Pool? Do you know what the city spends on maintaining the pools? How much has it cost the city to retro fit our street lights so we can see the stars?
Paying your labor force is almost always your greatest expenditure.
[quote]Is it true that the cafeteria pay was negotiated for, by the city, in the mid 90’s as a way to remove retiree spouse’s from medical coverage?
I have no idea. However, that makes no sense. It is not retirees who are cashing out their cafeteria benefits. It is current employees. [/quote]
I think that the cafeteria pay was offered by the city to it’s workers in exchange for no spousal coverage after retirement.
[quote]“Should we blame our finicial crisis on the workers that our city has negotiated with, and agreed to pay these “fluffy” benefits to, or should we blame those responsible for maintaining the finances, those balancing the books, those paying the bills for our short falls?”
Lamar’s answer: “We need to get tougher with our bargaining groups. We need set higher standards in our negotiations.” He puts the blame squarely with the council. Can you find a single quote from Heystek that places the blame on the workers.
[/quote]
My point is that cutting compensation should not be our #1 goal. Increasing efficiency and tax revenue (while not raising taxes), and eliminating unneccesary expenditures should be our top priority.
I fear that some are making this a witch hunt.
[i]am I part of the investor class?[/i]
“The investor class” is not a mystery phrase; even with quotes, it gets 2.5 million hits in Google. Anyway, you’re probably not in the investor class in the sense that I mean it. I had in mind people with at least 20 million dollars in securities and properties.
[i]If you tax investment such that it is no longer profitable relative to other investments,[/i]
If you tax investment so that it is no longer profitable relative to investment? That doesn’t make any sense.
[i]It sure is by historical standards, unless you are just looking very narrowly at the post-WW2 period.[/i]
Yes, Rich, I am looking “narrowly” in the 70-year period in which the US had a modern economy. There is no going back to the time when “medical care” was a friendly guy with black bag who told you that you were sick and then went home.
PRES: [i]”… your comment makes me believe that you are an elitist.”[/i]
RICH: I am much more of a satirist than an elitist, but thanks for the compliment.
PRES: [i]”I believe a significant portion of that contribution is actually made by the employee, but I could be wrong.”[/i]
RICH: Well said. You are wrong.
PRES: [i]”I agree with many of your opinions.”[/i]
RICH: I believe that makes you an elitist. Welcome to the club.
PRES: [i]”Every city’s greatest expenditure is labor costs. … I don’t think that employee wages and benefits are the problem …”[/i]
RICH: Try thinking harder, then.
PRES: [i]”Having too many workers that make close to and over $100,000 is a problem.”[/i]
RICH: Now you’re thinking.
PRES: [i]”I think that the cafeteria pay was offered by the city to its workers in exchange for no spousal coverage after retirement.”[/i]
RICH: You are thinking wrong, again. Not only do retirees for the City of Davis get spousal coverage when they retire, they get dependent coverage for children up to age 22. That covers the entire cost (under the Kaiser Family Plan) of all medications, all doctor visits, all visits to other qualified medical providers, all optometry costs and full dental coverage.
Because the City of Davis encourages employees to retire very young, a great percentage of our young retirees do have children 22 and under. A retired firefighter at age 50 makes 90% of his salary with full benefits. He also gets a small COLA every year. Why should he keep going to work when he can live better on his pension than most working people live working four times the hours he ever worked?
[i]Both are role models.[/i]
I think you pegged it there, Jeff. Rush Limbaugh had in mind that Barack Obama and Tiger Woods are both “role models”. If embarrassment befalls one role model, you can draw conclusions about other role models. Also if you have followed Rush Limbaugh long enough, you’ll know that Donovan McNabb is another one of these “role models”.
Mr Rifkin, you need to do more homework. A Firefighter would only make 90% of his salary at age 50 if he had worked for the city for 30 years.
All city workers do not have spousal coverage after retirement. It does not cover dental either. Maybe you are looking at the coverage that a council member gets after just 5 years. Try reading all of the MOU’s. Not just the one that you can use to vilify city employees.
“A Firefighter would only make 90% of his salary at age 50 if he had worked for the city for 30 years. “
Since you seem to know, what is the average tenure of a Davis firefighter prior to retirement?
Now we are arguing how old our firefighters are when they are hired? I thought this discussion was about compensation. Speaking of which, here are a couple excerps from an city MOU that prove Mr. Rifkin’s statements false.
MEDICAL BENEFIT PREMIUMS FOR RETIREES
Effective for all new hires as of July 1, 1996, the CITY shall pay 50 percent and the employee shall pay 50 percent for the actual group health insurance plan selected by retiree not to exceed the PERS rate for Kaiser for an eligible employee and two or more dependents prior to age 60, thereafter the CITY will pay retirees actual group health insurance plan not to exceed the PERS rate for Kaiser for an eligible employee and two or more dependents.
DENTAL BENEFITS FOR RETIREES
CITY shall make the dental plan available for retirees to continue at their own expense, at the same total monthly premium for the group dental insurance plan sponsored by the CITY for an eligible employee and two or more dependents.
This info is available on the city website. I searched for the average tenure of a Davis Firefight, but that info wasn’t there.
In other words you don’t have that data.
If you have that data, won’t you share with the rest of us?
I have the data from CAL-PERS, but not from the city. It’s in the article that shows that it’s a that public safety employees have a lesser life expectancy than other employees.
I’ll have to pull the data, all I have in there is the average safety official retires at 55 (not 50).
How about DCEA, PASEA, & MID-MGT? If you have avg. tenure too it would be appreciated.
Again, the data I have is CalPERS, not specific to Davis, I’ll see what I have, I can possibly get that data from Davis as well.
[quote]Effective for all new hires as of July 1, 1996, the CITY shall pay 50 percent and the employee shall pay 50 percent … [/quote] Yes, that is true. However, the new hires are not our retirees. The people you reference will mostly begin retiring in 2026 (safety) and 2031 (non-safety).
Long before we reach those dates, the unfunded retiree benefits ($42 million) will have caused the City of Davis to be insolvent. And if the performance of CalPERS does not make a dramatic improvement over the next 5-8 years, the ever increasing rates that the City pays for our 3% at 50 employees (safety) and for our 2.5% at 55 people (non-safety) will push us near, if not into, bankruptcy*.
All of our current, recent and soon to be retirees — based on what HR director Melissa Chaney told me — qualify for the full, free benefit, and that includes optometry and dentistry. Although it will change soon, an employee in Davis could have started here in October (after transferring from another city, for example), retired in November and qualified for a full retiree medical plan with no copays, costing the City $18,100 a year until he turned 65; and then from 65 to death, we would pay half his bill and Medicare would pay the rest. [quote]A Firefighter would only make 90% of his salary at age 50 if he had worked for the city for 30 years. [/quote] 90% of $113,000 is $101,700. That’s far more than most people in Davis make. Also, he could have changed agencies, say left the Dixon Fire Department or the UCD FD for the DFD and worked here only a short time before retiring. But that is not common. Our DFD retirees are mostly spending their whole careers, from age 20 to age 50, here. [quote] Mr Rifkin, you need to do more homework. [/quote] Yes. My hardwood floors need to be sanded and polyurethaned. [quote]Try reading all of the MOU’s. Not just the one that you can use to vilify city employees. [/quote] I’ve never vilified, defamed, slandered or spoken ill of city employees for the money they make. I have vilified our elected officials for not driving a harder bargain. I would love to vilify you if you would use your real name, Pres.
——
* The fact that the total comp is now capped in the new fire contract (1.5% growth year 2 and 2.0% growth in year 3) makes this less of a problem for the City but much more of a danger for the employees. What might happen is that, assuming the other contracts follow the DFD’s cap structure, as PERS charges substantially higher rates, the wages for employees will (per the terms of the contract) drop significantly.
[i]I’ve never vilified, defamed, slandered or spoken ill of city employees for the money they make. I have vilified our elected officials for not driving a harder bargain.[/i]
If it gets to the point of attacking the sales tax because the city council just WASTES the money on OVERPAID people, the distinction is moot. Then you have crossed the line from “let’s tighten our belts for the city’s sake” to “you don’t deserve what you get from my wallet”. It doesn’t work to claim to be friends with people after you tell them that.
[quote]If it gets to the point of attacking the sales tax because the city council just WASTES the money on OVERPAID people, the distinction is moot. [/quote] I have never suggested we should not renew the sales tax. Further, I have never blamed any worker* for making too much money. My presumption is that almost everyone** tries to drive the best bargain he can for himself — or for unionized workers, his bargaining unit tries to drive the best bargain it can for its members. Thus, if any worker is overpaid — and I believe some are — the fault lies with those on the other side of the negotiation.
*Because I am not burdened by a hate-the-rich ideology, I don’t blame CEOs or other highly compensated corporate executives for making tons of money, even when they don’t deserve what they are getting. The fault in those cases lies with lax boards of directors, who are often not paying proper attention or in some cases are overly trusting of and friendly to the managers they have hired, because those managers are personal friends. (I think the same thing happens in Davis, where members of the CC are friends with city workers, particularly department heads and sub-heads; and then the CC pays too much to make their friends happy.)
**I realize there are many people — myself included — who are not all that ambitious to always make more money. But as a general rule, most people try to make as much as they can for the job they are doing.
Let me clarify my position on the overpaid: I don’t consider my saying someone is overpaid a vilification of the person taking the money. It’s not his fault he is overpaid. He’s taking what they’re giving.
What then does “overpaid” mean? To my mind, it means we are paying a compensation package that we cannot afford, that in the long run will put us in a bind where the city can no longer deliver the services the taxpayers expect. Further, if there is a market for labor services and we are paying people — in total compensation — more than we need to in order to attract qualified candidates (for example, our jobs in the fire department attract hundreds of qualified people), we are probably paying too much.
Let me clarify my position on the overpaid: I don’t consider my saying someone is overpaid a vilification of the person taking the money. It’s not his fault he is overpaid. He’s taking what they’re giving.
Exactly – it is called the rational pursuit of self interest. However, you should include the unions as being at fault… or the allowance of unions.
In an idealistic capitalist model, long-term economic inequity is mitigated by competition. In an idealistic socialism model, short-term economic damage is mitigated by top-down government control.
The problem with the latter is the typical government apparatus trailing steps behind the sophistication of the business they are attempting to control. Because of this, the idealistic socialism model either has to stifle the level of sophistication so that it can be adequately controlled; or otherwise accept so many dropped balls. The unions are well-funded and sophisticated in their collective bargaining process, and cities all over the state have dropped the ball. Hence the thinking that the root cause of the problem is the fact that we allow unions to exist for public-sector jobs. Unions are sophisticated enough to play politics and manipulate the always less sophisticated public decision apparatus to extract the most from it without consideration for the long-term damage. Public employee unions – in fact – are in conflict for the public interest.
The real solution here is to outlaw public employees from unionization. This would serve to stifle the level of sophistication that is used to extract more public dollars to the determent of everything else, plus also introduce true competition in the public-sector labor market.
[i]Because I am not burdened by a hate-the-rich ideology, I don’t blame CEOs or other highly compensated corporate executives for making tons of money, even when they don’t deserve what they are getting. The fault in those cases lies with lax boards of directors, who are often not paying proper attention or in some cases are overly trusting of and friendly to the managers they have hired, because those managers are personal friends.[/i]
Or rather, friends or not, because they other their appointments to loyalty to management, and they might well be getting their backs scratched too. I totally agree with you that “hating” the rich is the wrong answer to the wrong question. I knew a billionaire-to-be in college, and he was and is a swell guy. The right question is tax policy. I don’t see the problem with using taxes to accomplish what boards of directors don’t accomplish.
Also, when the issue is firefighter salaries, you’ve been willing to blame campaign contributions as part of the problem. So you should consider the people who can give the maximum of $100K in biennial campaign contributions without even missing the money, and on top of that give unlimited amounts to think tanks, politicized “charities”, and 527s.
[i]In an idealistic capitalist model, long-term economic inequity is mitigated by competition.[/i]
In some idealizations and not others. Atlas Shrugged, for instance, describes an elite of talented people who deserve to be wealthier than everyone else.
I think the hate-the-rich ideology (voiced by populists left and right) comes out with notions that the government should cap CEO salaries in publicly traded private corporations. It is usually socialists who say things like, “No CEO should make more than (say) 5 times what the lowest paid worker in his company makes.” And right-wing populists (a la Pat Buchanan and others of his ilk) say things like, “That company is unAmerican, exporting our jobs overseas and then raising the salaries of its executives who make unpatriotic decisions.”
My own notion is that, unless the Boards of Directors are acting negligently or unethically, they are paying their executives to make profits for the shareholders; and if that means shipping jobs overseas, then that is what they should do*. As the company makes better returns, the managers responsible for those profits get compensated. (Alas, in the real world, when managers make bad decisions, the biggest price for those errors is usually paid by people far lower down the food chain, even if the CEO is fired.**)
The reason why most CEOs make huge multiples of most of their workers is not because of any conspiracy or Zionist plot — as the left would have it — but rather because their marginal productivity is much higher than most workers. In a few exceptional*** industries — sports and movies — you see just the opposite. The highest paid people are not the owners or the top executives. Their marginal productivity pales in comparison with the stars. So a Michael Jordan makes 25 times as much as a Jerry Krause in a given season. (With endorsements, it’s 100 times as much.) Or a Tom Cruise or Julia Roberts or Will Smith makes 100 times as much as the CEO of Sony Pictures or Fox Searchlight, etc.
*As a matter of public policy, I like the Clintonian idea of temporarily compensating individuals who lose their jobs due to trade liberalization.
**Greenmail.
***In some industries, top salesmen will also make more than the highest salaried bosses at their companies. The people who are that good in sales, though — a Ross Perot type — very often will leave to form their own companies, so they can make even more money. My nephew left the oil & gas exploration company he worked at to form his own company, despite the fact that he was making more in a year there than all of his bosses.
[quote]The real solution here is to outlaw public employees from unionization. [/quote] It seems to me that a public employees union is a fair counter-balance to a public employer. If you are the state of California, for example, and you are hiring traffic engineers for CalTrans, you are in somewhat of a monopsonistic position*. That is, you are the lone buyer of those labor services. On the other side of the table is the union which represents traffic engineers. It becomes a monopolist — the lone seller of the labor of traffic engineers. In that sense, you should have two groups which each have leverage against the other and in the middle you could find a reasonable deal. (The problem comes when the union side uses political power to influence management.)
*In a free economy, no one has total monopolistic or monopsonistic power in the labor market. Traffic engineers could move to another state or find work as civil engineers in private industry. The state could farm out work to contractors. However, insofar as these powers exist, they exist best in industries where other employment options are remote; and that is the case with a lot of government employment.
However, insofar as these powers exist, they exist best in industries where other employment options are remote; and that is the case with a lot of government employment.
I think that view is too narrow. First, if the government does not pay enough to attract enough traffic engineers less people will pursue that career. Being a necessity, the government would need to raise pay until it reached equilibrium… however, without a well-funded and politically-connected union, it would be highly unlikely that government would over-compensate. Also, there are few jobs/careers that need be considered permanent. Job security is still a public-sector career mindset that has become a bygone relic within the private sector. Private sector employees constantly need to reinvent their professional selves since there is no long-term job security.
Frankly, I think the lack of new blood flowing into the public sector is at least partially responsible for the decision paralysis and service problems that tend to plague it. The older we get and longer we do something, the more vested we become in preventing change. This tendency is partially why Tom Peters and other management gurus have recommended large organizations employ a CDO (Chief Destruction Officer). The idea is that monolithic structures of inefficiency develop because of human nature, and that these need to be destructed on a regular basis to rebuild optimum structures. Process reengineering was/is the methodology for rebuilding, but organizations could not succeed at this until destruction was accepted. How can you do this with unionized labor? Ask the US auto companies what happens when you don’t.
Maybe there is no need to for destruction and reconstruction of our fire protection services; however, like many public-sector services, they have become just too damn expensive. It seems now is a good time to start destructing this union and other public employees unions as a way to get back to equilibrium.
[i]No CEO should make more than (say) 5 times what the lowest paid worker in this company makes.[/i]
Rich, I have no problem with the idea that the CEO or someone else in a company might make 5 times as much as the lowest paid worker. Many people are easily five times as productive as other people. I don’t have that much of a problem if the CEO is paid 50 times as much as the lowest paid worker. Not all that many people are 50 times productive as menials, but some are. I can even sort of understand it if the CEO is paid 500 times as much as the lowest paid worker. I’m a little skeptical that real-life CEOs truly are 500 times as productive as plebian workers, but I can see that kind of compensation as the outcome of a bidding war for someone with a fabulous Rolodex.
But when the CEO gains more than 5,000 times as much as the lowest paid worker, then I just don’t see the utility. I know why it happens and I know that it could be hard to fix in the face of property rights. I still can’t see it as an important tradition that needs to be protected. Particularly not when a windfall of that size comes at retirement. And just because I don’t see the economic need to pay this or that CEO $200 million in one year, that does not mean that I hate his guts. He could be the best dad in the world, for all I know. He could be Einstein crossed with Mother Teresa, for all I know. Maybe he’d be my best friend if I knew him well. I would still like to raise his total tax rate to at least be equal to my total tax rate — which it likely isn’t if most of his compensation is capital gains.
But when the CEO gains more than 5,000 times as much as the lowest paid worker, then I just don’t see the utility.
What about Brad Pitt making 5,000 times what a stagehand makes? What about Tiger Woods making 5,000 times more than a professional caddie makes? What about Michael Phelps making 5,000 times more than the average professional swimmer and 50,0000 times more than the guy that cleans the pool?
What about the scientist or journalist that writes a NYT best seller compared to the colleague that toils for meager wages?
Isn’t the utility a system that varies payment to market rates based on the supply and demand of specific talent?
I would still like to raise his total tax rate to at least be equal to my total tax rate — which it likely isn’t if most of his compensation is capital gains.
What good would that do other than making some people feel better being less envious?
I’m sure you know that highly compensated executives generally take a large percentage of their compensation in company stock options. It is compensation at risk. It is skin in the game to ensure they work hard to make the company successful. If they succeed and keep the stock value high, they make out well on paper. However, they pay capital gains when they liquidate their holdings… and yes, this is taxed at a lower rate than wage earnings. However, unlike your monthly salary, the value of these holdings before they are cashed out (and they are limited to how much the can cash out in time) are at risk. Just ask Bear Stearns, Citibank and GM executives what “at risk” means.
[quote]What about Tiger Woods making 5,000 times more than a professional caddie makes? [/quote] Yet Stevie Williams still has all his teeth; while Tiger took a 3-iron to the chops and has to hide out until his mouth heals.
[quote]Although it will change soon, an employee in Davis could have started here in October (after transferring from another city, for example), retired in November and qualified for a full retiree medical plan with no copays, costing the City $18,100 a year until he turned 65; and then from 65 to death, we would pay half his bill and Medicare would pay the rest. [/quote]
They would have to work for the city 5 years before becoming vested. Only city employees hired prior to July 1, 1996 recieve this benefit. Plus an employee must enroll in the city provided plan for at least one year before retirement to be eligible. The only retired workers costing the city $18,100 are the ones that were hired before July 1,1996, have their wife covered, and have two children age 22 or under.
[quote]Yes. My hardwood floors need to be sanded and polyurethaned.[/quote]
When you are done with yours could you do mine?
[i]What about Tiger Woods making 5,000 times more than a professional caddie makes?[/i]
First of all, it’s not true. A professional caddy makes about $50,000 per year, while Tiger Woods makes (or made, according to Forbes) about $100 million per year including endorsements. That’s not 5,000, that’s 2,000.
But even so, yes, Tiger Woods made all that money from his golf and from his face. So? Why shouldn’t he pay taxes at at least the rate that I pay taxes? If I still do math despite all of the taxes that I pay, I’m sure that he’d still play golf even if he only made $50 million per year. Or even if he only made a $10 million per year.
Besides, who the hell cares which golfer comes out on top. It’s exactly the same entertainment as long as there are good players.
[i]What about Michael Phelps making 5,000 times more than the average professional swimmer and 50,0000 times more than the guy that cleans the pool?[/i]
Most professional swimmers don’t make any money. As for the guy who cleans the pool, Phelps does not make 5,000 times more. He makes about 200 times more. (Not sure what you meant by putting four zeroes after the comma.)
[i]What about the scientist or journalist that writes a NYT best seller compared to the colleague that toils for meager wages?[/i]
That would be about a factor of 100, not 5,000.
[i]What good would that do other than making some people feel better being less envious?[/i]
It surely is true that whenever anyone questions whether anything is fair, someone else is there to dismiss it as envy. But even if you are a rock-ribbed plutocrat, there is something to be said for spreading the tax base to where the money is.
[i]However, they pay capital gains when they liquidate their holdings… and yes, this is taxed at a lower rate than wage earnings.[/i]
Not only that, it is only is taxed when they want to spend it. When I draw a salary, it gets taxed right away, whether I plan to spend it or not.
As for this “skin in the game” theory, there are plenty of industry captains who didn’t go down with the ship. The Nortel CEO for instance — this is not someone who went to jail or anything — cashed out for nine figures in the same year that Nortel went bankrupt.
[quote]Long before we reach those dates, the unfunded retiree benefits ($42 million) will have caused the City of Davis to be insolvent. And if the performance of CalPERS does not make a dramatic improvement over the next 5-8 years, the ever increasing rates that the City pays for our 3% at 50 employees (safety) and for our 2.5% at 55 people (non-safety) will push us near, if not into, bankruptcy*.
[/quote]
I understand the point you are trying to make. I guess I’m not expressing my point that well. We know and have known for a long time what our labor force has, is, and will approximately cost us. Yet, this city has not taken steps to be prepared for this cost. The average cost of living increase for the last five years is over 3%. What steps has this city taken in increase revenues, without tax increases, in the last 5 years? This city pretty much relies on its property taxes to survive. Well when the cost of living goes up by 3% and you maintain a 1% growth rate its only a matter a time before you are bankrupt. We were lucky in the past that property value was going up enough to keep pace, but relying on that trend to continue has been just silly. Using contract negotiations as your main weapon to contadict a downturn in the economy is not the right way to right this ship. This city needs a fundemental change in its philosophy toward sales tax generating businesses.
[quote]I’ve never vilified, defamed, slandered or spoken ill of city employees for the money they make. I have vilified our elected officials for not driving a harder bargain. I would love to vilify you if you would use your real name, Pres.
[/quote]
Now that is satire.
Atlas Shrugged, for instance, describes an elite of talented people who deserve to be wealthier than everyone else.
That is funny Greg… it is exactly what the looter and moocher characters in the book said about the producers.
That’s not 5,000, that’s 2,000
So you support a CEO making 2,000 times more but not 5,000 more… I guess we all have our limits for what is reasonable.
As for the guy who cleans the pool, Phelps does not make 5,000 times more. He makes about 200 times more.
I was referring to the guy that cleans the pool, not the guy that owns the pool cleaning company.
When I draw a salary, it gets taxed right away, whether I plan to spend it or not.
First of all, once incentive stock options are exercised, position holders pay capital gains on earnings “gains”. Then they are taxed on the basis when positions are liquidated. The gains for nonqualified stock options are taxed at ordinary income rates.
Regardless, what’s your point? Paper wealth is paper wealth. You are not taxed on the equity in your home unless you sell it either. It would be real screwed up to try and tax investments based on assessed value. Hell, banks in the business of assessing tangible asset value couldn’t even do it. Let’s not even consider the problems assessing the true value of intangible assets like paper ownership of a percent of some conglomerate. Another thing, about 10 million working people participate in stock options. These are not just a “perk” provided the wealthy. Last thing, your state employee pension is not taxed, and the big dogs don’t get to shelter any pre-tax money in private retirement accounts like you and I do. That hardly seems fair.
[quote]They would have to work for the city 5 years before becoming vested. [/quote] WRONG! You don’t know what you are talking about, Presto.
Under the current operating contracts for all full-time city employees (save firefighters now, because their deal includes the vesting option), an employee could work as little as one day for the City of Davis and retire with the full retiree medical benefits for the rest of his or her life. One day!!!
In order for that to happen, the employee would have to qualify for a retirement under the terms of CalPERS. What that means is, while working for any PERS-affiliated agency — that is, some other city or county — he would have had to have worked a minimum of five years (to be vested) and he would have had to reach the minimum retirement age (in Davis, that’s 50 for safety and 55 for non-safety).
This is a scandal I broke in my column about a year ago. You should read my column. You would learn something, Presto. Once I broke this news, the council decided that needed to change. That column (I was told by members of the city council) is the reason they added the CHANGE to the fire contract requiring that the vesting be in Davis (as opposed to the agency they worked at previousl) and that change will be added it to all the others upcoming. But to this date, it only applies to the new fire contract.
[quote]When you are done with yours could you do mine? [/quote] Absolutely. My rate is firefighter scale — $100,000 a floor and retirement after one floor at $80,000 a year plus full medical.
[i]So you support a CEO making 2,000 times more but not 5,000 more… I guess we all have our limits for what is reasonable.[/i]
I never used the words “reasonable” or “unreasonable”. Even if someone made 50,000 times more than minimum wage, it could be “reasonable” in the sense that he played by the rules and made that money. My position is that there is nothing sacred about making that much money and they might as well tax it if they tax anything. “Not sacred” is not the same as “unreasonable”.
I don’t see anything sacred about making 5,000 or even 2,000 times as much as minimum wage. Some of the people who make that kind of money would argue that the fact that they acquired the money proves that God willed it to them, or that they deserve it as a reward for achievement, or otherwise that they have the fundamental right not to be taxed. I disagree.
[i]it is exactly what the looter and moocher characters in the book said about the producers.[/i]
They said that the producers are better people who deserve to make more money than they make? If the “looters” and “moochers” said that, then they were speaking for Ayn Rand herself.
[i]I was referring to the guy that cleans the pool, not the guy that owns the pool cleaning company.[/i]
You just haven’t done the arithmetic, Jeff. Michael Phelps makes about $4 million per year, which is about 200 times as much as a menial pool worker making $20,000 per year. Not 5,000. Phelps might well make a lot less than the guy who owns the pool cleaning company, if it is a large company.
Besides, I don’t see anything sacred about Phelps making $4 million per year. He’d still swim just as fast if it was $2 million per year or $1 million per year. Again, his earnings are “reasonable”, but they’re not sacred.
[i]Regardless, what’s your point? Paper wealth is paper wealth.[/i]
My point is that those with paper wealth are treated with great privilege by the tax system. For no reason other than that they used their influence to arrange things in their favor. I have some investments too, and I can see the difference. When I work hard all day for a salary, the government milks it for quite a bit. When I fiddle with investments on a web page, the government treats it with kid gloves.
Greg: I’m sure someone is going to tell us to “get a room”…
They said that the producers are better people who deserve to make more money than they make? If the “looters” and “moochers” said that, then they were speaking for Ayn Rand herself.
The looters and moochers were afflicted with an inferiority complex and obsession with manufactured “fairness” and they projected elitism on the producers. Remember that Rand assigned non-producing old money wealth to the looter class. Producers were self-made industrialists that created value in the products and services they sold. Their wealth was directly attributable to what they earned, not what they were given. Neither Rand nor the producers believed they “deserved” to make more money; that was what was projected on them by the looters and moochers. There was no exclusivity to this group other than the belief in the principle of freedom to pursue individual interests and to reap the rewards for individual success as determined by the free market.
I used to manage a large department of IT professionals. Periodically I would hear some complaint from some senior engineer about the “fat cats” in Sales. I would always jump on that as an opportunity to educate the complainer… telling them there was absolutely nothing blocking them from pursuing a career in sales if they wanted to make that level of coin. People with a “producers” mentality get that. Looters and moochers are generally the chronic risk-averse deniers of some level of personal unhappiness – wholly or partially disgruntled with their position in life and prone to unhealthy fairness comparisons. CEO earnings do not directly impact most of the people that complain the loudest about it. In fact, the more a CEO makes, generally means that the company he/she is leading is more successful. This means they are hiring more people and paying larger salaries and bonuses. This increases tax revenue so the looters and moochers can be taken care of. I am not a fan of big CEO pay when the company is doing lousy or fails. I do not support bailouts. I also support antitrust laws and enforcement because the key is the most robust and health competition between producers.
Interesting that Rand also wove in scientists as corrupt political wonks supporting the looting class; with both ignoring the simple logic that looters need producers to loot from. Looking at the current news about the recent behavior of climate scientists and their joining with politicians on the left to attack industrialism and capitalism, you would think that Atlas Shrugged was written today.
[i]The looters and moochers were afflicted with an inferiority complex and obsession with manufactured “fairness” and they projected elitism on the producers.[/i]
I’m not sure about the “producers” in the book, but who wouldn’t “project” elitism onto Ayn Rand and the book itself? If the world’s creative leaders need to go on strike to enlighten the mediocre mass of humanity, what can you call that other than elitism?
Certainly in practice, Rand’s followers were so elitist that they dismissed ordinary libertarians as “moochers” who had stolen Rand’s ideas without understanding them.
[i]Remember that Rand assigned non-producing old money wealth to the looter class.[/i]
That’s an ironic assignment, given that old money has the most to gain from the plutocratic tax policies of today.
[i]I would always jump on that as an opportunity to educate the complaine…telling them there was absolutely nothing blocking them from pursuing a career in sales if they wanted to make that level of coin.[/i]
There is one bit of mathematics that truly does block many people from certain goals. If the goal is to make 5,000 times the average, then only 1/5,000 of people at the most can reach that goal. I have heard that 19% of Americans think that they are in the top 1% of income, and another 19% plan to get there on day.
[i]Looking at the current news about the recent behavior of climate scientists and their joining with politicians on the left to attack industrialism and capitalism[/i]
It is an interesting version of capitalism that requires the atmospheric liberation of a specific element in the periodic table, namely carbon. It’s a good thing that no one thinks so of radium!
I’m not sure about the “producers” in the book, but who wouldn’t “project” elitism onto Ayn Rand and the book itself? If the world’s creative leaders need to go on strike to enlighten the mediocre mass of humanity, what can you call that other than elitism?
You need to read the book again. The main producer characters Dagny Taggart (railroad), Hank Rearden (steel) and Ellis Wyatt (oil) could only be considered elites by the very people consumed with sanctimonious envy over their accomplishments. These are the looter and moochers that demanded sanction of the victim. Rand assigned this behavior and mindset as ultimately evil and ultimately destructive to the system it desired to control. Conversely, she assigned virtue to the trait of pursuing rational self-interest. For the producers, affiliation only required the latter mindset combined with a strong work ethic. That is a pretty broad acceptance for being labeled elite.
There is one bit of mathematics that truly does block many people from certain goals. If the goal is to make 5,000 times the average, then only 1/5,000 of people at the most can reach that goal. I have heard that 19% of Americans think that they are in the top 1% of income, and another 19% plan to get there on day.
This thinking requires a statist view… that people are only able to achieve to a point in a single career or discipline. In the US, people are free to pursue anything that interests them. If they are reasonably smart and have a strong work ethic, and they are unencumbered with the mindset of a victim, they can reach higher pinnacles of success… many which translate to wealth in a free-market society. Some will make more, and many will make less. But those that make less are not prevented from pursuing any activity that has the potential to make them more. If, in their failure to gain the wealth that they desire they become envious and a sanctimonious victim, it is not the fault of the wealthy.
Merry Christmas!