Sunday, February 21, 2010

Retire in style, all on the public dime

Picture the idyllic setting of your mountain lodge on a scenic lake, your Ranger bass boat (with twin 220HP Mercury outboard engines) tied up to your private dock, and you puffing on a $10 imported cigar getting ready for a day of fishing, just you and this natural splendor. This is the way retirement should be, without a care in the world.
Most of us would think that this guy put in his 35 to 40 years in the corporate rat race, squirreled away as much money for retirement as possible, put that money to work for him in a diversified portfolio, and aggressively managed it so that he could one day live his dream in his Golden Years.
A few of these scenes of blissful retirement were acquired in just that manner. But this guy above is a New Jersey public employee union retiree, who through years with his collective bargaining agreements coercing ever more lucrative retirement benefits from the state coffers and was able to throw in the towel at age 49 and look forward to collecting $3,800,000 during his retirement, although only contributing $124,000 during his brief working years.
Doing the math, it just doesn't add up very well, does it? These unfunded retirements for millions of public union employees are burying most states in the U.S. in red ink, all the while these retirees live the high life, all on the public nickel (or the public $3,000,000 more accurately). How long has this been going on? Quite a while, ever since public employees were allowed to unionize during the Kennedy administration in the early 1960's.
Alexis de Toqueville, in his book "Democracy in America" predicted this in 1835, saying that (and I paraphrase here) when the citizenry discovered that they could vote themselves largess from the public trough, the future of our republic would soon crumble. And he has certainly been proven correct 175 years later: New Jersey is broke, California is even more broke, and these public employee unions bear the lion's share of the blame. Their greed and arrogance has brought the Garden State to its knees, and now a brave, newly elected Republican governor is showing the backbone needed to change directions.
I wish Gov. Chris Christie all the best in his endeavors to reign in this madness. The state, county, city, village and township governments in New Jersey have been put on notice that living the life of Riley on the public's dime is no longer the 'American Dream,' and these moochers in the public unions better start cutting back their lavish lifestyles, or find another line of work.

17 comments:

Christopher said...

I wish Gov. Chris Christie all the best as well.

Many folks in this Nation are unaware of public employee unionization for some reason and Christies action(s) will finally shed some light on this subject or better said travesty.

Christopher said...

Fredd, Meant to mention that the pic you posted is not visible, at least on my end.

Christopher said...

Now I see a pic.

Fredd said...

Christopher: thanks for the heads up on the photo, I think I fixed it. I know a paramedic/fireman who works for the Santa Monica CA fire dept: his union (of which he is a poobah) muscles more lavish perks each year from the city council, and his pension is awesome. His pension makes that NJ public retiree look like a pauper. I told him that was just unsustainable, maybe 5 years ago.

He laughed at me. I wonder if he is laughing now.

TKZ said...

Lock the union leaders up for fraud, and anybody who fell for the scam doesn't deserve a retirement bailout. I know; that would be mean, right? What can I say? I'm a fan of natural consequences! There is no such thing as a free lunch.

Fredd said...

TKZ: I completely understand the sentiment.

I'm sure that legally, the union thugs negotiated within the limits of the law, and that the threat of garbage, firemen and policemen strikes had every local politician paralyzed in fear during the contract talks.

Having said that, however, it is an axiom that there is INDEED no free lunch. The piper must be paid, and it would not cause me a moment of lost sleep if every stinking one of these gutless municipalities revoked every luxurious pension plan and pared it down to the level of a social security payment. That, or file bankruptcy and give the rank and file nothing.

TKZ said...

I'm sure they worked within the law system, except that they knew that they couldn't pay out what they were promising, and on some level and at least with some unions, that could be tried in court as fraud. Sure, you'd have to prove that they had the math skills to realize that the system was unsustainable, and partial blame would have to go to our public servants for green-lighting it. Something has to change, regardless.

I see only 3 options (would love to see more ideas, though):

1. Lock them up for promising more than they intended to give.

2. Fight back with legislation. (I don't like that idea because it might punish offenders and non-offenders alike, and we probably can try them with the laws we already have in place.)

3. Capitalists fight back by not signing union contracts,firing union workers, and only hiring non-union workers. It would be like a business strike, if you will. LOL It's not like they couldn't find other non-union workers to replace them in this economy.

Amusing Bunni said...

The Unions really have wrecked America.
I wish I could retire nicely, instead of worrying where my next check is gonna come from now.

Snarky Basterd said...

Indeed, obtaining a gubmint job is the holy grail (well, it's actually a hell of a lot easier than finding the holy grail) of jobs. Once you're in, you're on the road to living the high life ... and I don't mean the Miller High Life.

Christie definitely has his work cut out for him. California? It's time to drop a nuke in the Mohave and activate the San Andres fault and watch the entire wretched state slide back into the Pacific.

The_Kid said...

Fredd, as I understand it, most of the states are like this. California being so bad, it would scare the hair back off your a..

So, where did organized crime go? I'd say they infiltrated the unions, the schools, and pretty much everywhere else where they are clamoring for more tax money and not providing anything back in return.

Silverfiddle said...

All the states are like this, even my state of Colorado.

The states will have to break these contracts, no way around it.

Time for these bastards to work till 65 like the rest of us.

Fredd said...

TKZ: sounds like you are for getting rid of unions. I think their time has come and gone (some time ago). Locking people up after they have played the game within the rules, even though the rules suck, nah. We'd start to look like a banana republic (like we don't already).

Bunni: you and me both. I've played by the rules all my life, and my retirement is far from settled, unlike these moochers.

Snark: my public union buddy in CA still thinks that there's no bottom of the well when it comes to the public trough. I disagree, it's only a matter of time. We all thought Arnie was the answer, wrongo. We need a Chris Christie in CA to make the tough choices that so many have avoided in the past. That San Andreas solution will wreck the real estate market there, you know, Snark.

Kid: you may be onto something there, Kid. Like the old scam of 'window insurance' in Camden, of which the sales pitch went something like this:

Goomba: " you an' da missus sure gotcher self a real nice store front window, dere, folks. Sure would be a shame to see some doit bag throw a brick throughs it."

Store owner: 'whaddya mean, you got some plan to prevent dat from happenin' to me an' da missus?"

Goomba: " sure ting. You pays us a montly payment, an' we make sures dat nobody throws no brick throughs yer window, an da boaf a yuz can sleep at night."

Window insurance. (note: in Philly, 'da boaf a yuz' translates to 'the both of you,' just so you know).

Silver: there's no way around it. To hang up the trowel at age 49 and retire to your beachfront condo, that just makes no sense whatsoever. That's pure and simple not sustainable.

sig94 said...

On the other hand (yeah I'm a retired cop) do you want some 60 yr old guy chasing some mook through your backyard? I was 45 yrs old and chasing armed teenagers down a street - I still managed to keep up with a 30 yr old detective. But by time we lost them I was so winded, the only thing I could do if I caught one of them was crap on him. I have a pension but I still have to work full time and my wife also works - we're not rich by any means. I will have to work until 66.

On the other side of the argument, I warned some of the younger cops that the older guys were going to ruin it for everyone with their overtime going into their pension calculations. Guys retiring at $75G and more a year based on monstrous OT eventually did ruin it. The State started a new pension tier where now all the new cops have to kick in where before their was no contribution. Plus now they have to work 25 years to retire at half pay instead of twenty. I did 24+ years and was waking up at night getting ready to puke from the stress. As a rule, cops don't last too long after retirement. Plus, the retirement system was based on public servants making squat sixty years ago (only 70% of the private sector). Now that the money isn't bad the pension benefit has to be restructured. I worked through the Carter years when I was losing 8% a year due to inflation and that was after a 4% raise.

Fredd said...

Sig94:

Pensions in general (and especially in the public sector) have been out of whack for quite a while, and particularly since the stupid and greedy public employee unions got involved.

The threat of strikes by critical public servants like police, fire and garbage, er, should I say sanitation, have skewed any reasoning and logic from the process. The business cycle was removed from the discussions, and retirement plans never involved ebb and flow of municipal revenues. That, plus like you pointed out, Sig, manipulations of the base rate jacked up the pay outs year in and year out. The pensions got larger, the time to retirement got shorter, and now we have 49 year old retirees: unsustainable, simply unsustainable.

In a normal business, or even a normal guy, planning on future revenue streams always figures that there will be a best case and worst case at some point in the undetermined future. Greedy unions always based their argument on best case, and never assumed things would go bad. If they did, they exempted themselves from the downside at the cost of the taxpayer, or corporation.

I have been a 401(k) guy, so has my wife, and we are doing it the way you're supposed to do it: you allow for risk, your tolerance to it, and accept things for what they are. Additionally, being realists and not living in La La land, we are not counting on Social Security being around in its present form, as that would be suicide. Life in reality sometimes sucks, but to dunk your head in the sand and pretend that reality is nothing but cake and limosines as far as the eye can see is insanity.

To live in never never land, and expect that everyone's grand kids are going to pick up the tab once you are gone is irresponsible, to say the least (no not you personally, Sig, but you know what I mean).

The chickens come home to roost, and at some point some grownup will reign things in, at terrible pain for all of those to whom promises were made when those promises can no longer be kept.

sig94 said...

I dunno know about other states, but here in NY public employees are forbidden to strike under the Taylor Law.

But no question about it, things have got to change. The way the unions have a stranglehold on State legislators I do not see much happening until it is too late.

Krystal said...

And you know that the federal government is going to bail out these state unions the same way they bailed out the auto unions. The companies they worked for were going under, but they still deserve to be paid $38 an hour plus unbelievable benefits (half pay if they get laid off???? they too good for unemployment like everyone else????).

Now, if someone could just reign in on Congress and their lifetime pay for being elected only once ...

Fredd said...

Krystal:

Some of these union entitlements are just outrageous. Just completely out of control.