Wednesday, December 29, 2010

The Steady Drum Beat

It is a fact that Republicans, specifically conservative Republicans, are experts at “controlling the message”.  It can easily be said that they are the masters of dealing with the public’s very short attention span and if it doesn’t fit on a bumper sticker, it doesn’t get said.  Democrats, specifically liberal Democrats, are not very good at controlling the message.   We are not very good at what is known as the “ten word answer”.  Our message tends to be a bit more detailed, almost to the point of putting the public to sleep.

So it is that Republicans are once again controlling the message, this time about the need for states to have the ability to declare bankruptcy to deal with their self inflicted debt.  In news story, after news story, the drum beat has been loud and steady that public state employees need to be the sacrificial lambs for poor tax policy decisions made by politicians.  Specific blame is laid at the feet of the unions representing those state employees and the contracts they negotiated for them.

You see, years ago, state governments made a promise to their employees: Work for below “market” wages for a minimum of 20 years, enduring the wrath of the public at large and we will make sure you are taken care of when you retire.  Of course, this promise came with some strings attached, which included the need to put a portion of your salary into a pension fund that would be matched by the state.  In the beginning, these pension funds were managed by the states with very strict rules about where they could invest the monies.

As with any promise, the rules were changed.  The funds could now be managed by Wall Street firms charging fees to the fund.  Instead of being required to invest their funds in safe investments such as bonds, the funds were allowed to make riskier investments such as shopping malls, stocks and exotic products offered by investment banks.  With higher risk can come higher returns, but as we have seen, that higher risk can be disastrous.  Those same funds that were seeing their values increase due to their riskier investments are now seeing their values drop below where they once were.

Because those funds are not worth what they once were, current state employees and tax payers have to kick in extra to bring their value back up.  Which brings us to the ten word answer being drum beat by Republicans across the nation: States need to be able to declare bankruptcy in order to break their promises to public employees?  The politicians are saying it is not their fault for changing the rules for governance of state employee pension funds.  They are saying it is not their fault that they implemented tax cut after tax cut after tax cut.  They are saying it is the fault of the union represented public employees.

Instead of honoring the promise given to state employees, the employees are the scapegoats.  Instead of practicing sound fiscal management policy, they shift the blame to the public employees.  It is a tried and true practice which spells disaster for the public employees and the tax payers as well.  It is the ten word answer that the Republicans are using to control the message, beating their drums loud and steady.

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