Sunday, November 6, 2011

Blue San Francisco Plans To Stiff The Unions | Via Meadia

Blue San Francisco Plans To Stiff The Unions

Scott Walker move over; San Francisco is the latest front line in the battle against abusive public sector unions.

The bluest city in the bluest state in the union has woken up and smelled the latte; generations of extortionate collusion between shamelessly greedy and shortsighted union leaders and unforgivably opportunistic and irresponsible politicians have left the Blue Paradise on the Bay with a pension bill that it simply can't pay.  As tells it,

San Francisco's public pension system took a beating during the recession, which has left it carrying a hefty unfunded liability for its 26,000 current and 28,000 retired employees. The city's pension obligation is growing by $100 million a year, leaving less funding for police and fire protection, park maintenance and health services for the needy.Unable to keep up, San Francisco is among several California cities asking voters to help tackle the public pension problem—which is now one of the biggest causes of municipal budget shortfalls.

Several things about this story deserve a closer look; one is that Blueville by the Bay has more retired workers than current employees.  Unless San Francisco has been on a hitherto unnoticed frenzy of cost cutting and layoffs, this means that the city has long had a grotestquely out of line pension system that permits people to retire much earlier than they should.  A more reasonably retiree ratio would be something like one to four; a one to one ratio means that the city is paying as many people to rest as it is to work.  The technical term for this in accounting circles is "blind folly".  It is often written in Greek: ατη and it is well known as the stage that comes between hubris and nemesis while a tragedy unfolds.

San Francisco may be the Athens of the West, but it is not the only California city that is taking ballot measures to the voters as a way of reducing unsustainable pension obligations.  San Diego and San Jose are also planning ballot measures; the unconscionable collusion between greedy union leaders and ambitious politicians threatens to ruin cities up and down the coast.

California's shortsighted unions and politicians have left their successors in a horrible position: do you slash pensions that old people rely on, or do you cut government services like police, fire protection and education?  Taxpayers generally favor the first alternative; it is hard to persuade hardworking immigrants struggling to raise kids that they should send their kids to bad schools on dirty, unsafe streets to save the money necessary honor abusive contracts made by past generations of labor and political bosses.

The courts, however, take a different view.  Contracts are contracts and cannot lightly be broken.  Union lawyers are appealing ballot initiatives and pension changes in the courts; often, they win.

Via Meadia thinks that contracts ought normally to be honored, but some agreements are so unrealistic that they are unenforceable.  If the unions fight too aggressively in the courts, the cities can always go bankrupt.

Meanwhile, the public unions in California are isolating themselves politically.  Insisting on "geezers first, kids last" public policy is neither decent nor honorable nor wise.  The political and economic failures of the Baby Boom generation are nowhere more obvious than in California.  The Boomers inherited a golden state of promise and dynamism; as they begin to retire they are leaving it a debt ridden hulk — and the wrecking crew wants fat pensions for a job well done.

Many will have to make do with less than they'd expected; a generation that failed to make California rich enough to afford generous pensions will not be able to collect.

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