David Sirota cautions us against buying into the right-wing myths about Detroit, and asks:
How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium?
"This is classic right-wing dogma," he writes, "the kind that employs selective storytelling to use a tragic event as a means to radical ends:"
In this case, the ends are -- big shocker! -- three of the conservative movement's larger long-term economic priorities: 1) preservation of job-killing trade policies 2) immunity for corporations and 3) justification for budget policies that continue to profligately subsidize the rich.
"It's a straightforward conservative formula," he explains, as "the right blames state and municipal budget problems exclusively on public employees' retirement benefits, often underfunding those public pensions for years:"
The money raided by those pension funds is then used to enact expensive tax cuts and corporate welfare programs. After years of robbing those pension funds to pay for such giveaways, a crisis inevitably hits, and workers' pension benefits are blamed -- and then slashed. Meanwhile, the massive tax cuts and corporate subsidies are preserved, because we are led to believe they had nothing to do with the crisis. Ultimately, the extra monies taken from retirees are then often plowed into even more tax cuts and more corporate subsidies.
He points out that "it's a good bet the $19,000-a-year pensioners are going to bear a disproportionate share of the sacrifice [because they] have the least amount of political power:"
So, as always, they probably won't be at the negotiating table. Instead, they'll almost certainly be where they usually are: on the menu, exactly where the conservative movement wants them.
It's another example of Republicans' race to the bottom, notes The Guardian:
If a city declares bankruptcy and its current and retired workforce ranging from librarians and sanitation men to police officer and fire fighters are forced to take permanent reductions to their promised monthly pension benefits, will anyone care besides the impacted employees and the unlucky retired workers dependent on that income?
BigThink also looks into this "nightmarish scenarios" for pensioners:
Detroit's 21,000 pensioners...stand to lose up to 90 percent of the pensions they were promised and have been expecting. [...] According to this data, 21 states have worrisomely underfunded pension funds while 29 are in pretty good shape.
ThinkProgress wonders, were the negotiations designed to fail?
The messages made public thusfar [sic] show Jones Day attorneys defining bankruptcy as inevitable in their own words.
"It seems that the ideal scenario would be that Snyder and Bing both agree that the best option is simply to go through an orderly Chapter 9 [bankruptcy]," one Jones Day attorney writes to Orr in the emails.
Fox's outlandish figures, though, claim that "in 2012, total state and local unfunded pension liabilities amounted to more than $4 trillion:"
Fox seems to have picked the largest number it could find -- one that is about four times larger than all other estimates. [...] Fox, of course, has used every opportunity to raise the alarm over Detroit's unfortunate economic circumstances and push myths about public pensions.
We know that the Right's supply-side dogma is wrong, and there's another solution that isn't top-down; see Eric Liu & Nick Hanauer's piece on the true origins of prosperity (a part of Democracy Journal's series on middle-out economics):
Middle-out economics argues that national prosperity does not trickle down from wealthy businesspeople or corporations; rather, it flows in a virtuous cycle that starts with a thriving middle class. Middle-out economics demands a systemic policy focus on the skills, capacities, and income of the middle class.
My Quote of the Day is the observation that "The picture you have in your head about how the world works absolutely determines what you think is possible or beneficial:"
For example, people equally committed to getting from Earth to Mars will have paralyzing differences about how to get there if one group believes the sun and Mars orbit the Earth while the other group believes that the Earth and Mars orbit the sun. People are entitled to differences of opinion. But only one cosmology gets you to Mars. And crucially, splitting the difference won't get you there either.
To bring the analogy back to politics:
It is impossible to effectively contest trickle-down economics and the tax policies it implies while simultaneously accepting its foundational premise -- that rich businesspeople are the sole job creators in a capitalist economy. This is because if they are the job creators, then trickle-down economics is necessarily true. But if middle-class consumption is what creates jobs, then trickle-down economics is necessarily false.
Now comes the tricky part--moving the idea of middle-out economics into the pubic consciousness:
Middle-out economics is not just a catchy rhythmic contrast to trickle-down; it's a strategy based on a set of facts about how the economy really works. [...] Middle-out economics isn't an attack on capitalism; it is simply a more effective form of capitalism than the faux free-market ideology we currently embrace.