Read the rest at Front Porch Republic
The deal Wisconsin made with its state employees was simple: Accept lower wages than you could get in the private sector now in return for better pensions and health-care benefits when you retire. Now Walker wants to renege on that deal. Rather than stiff the banks, in other words, he wants to stiff the teachers–but the crucial twist he’s added, the one that’s sent tens of thousands of workers into the streets, is that he wants to make sure they can’t fight back once he does it.
The reason you can’t stiff bondholders is that they can make a state or country regret reneging on the deals they’ve made. They can increase borrowing costs far into the future, slowing economic growth and, through the resulting economic pain, throwing politicians out of office. That gives them power. An ordinary teacher does not have access to such artillery. Unless, of course, she’s part of a union.
Saturday, February 26, 2011
I know that the public sector is a bureaucratic mess of inefficiency, waste, and complacency. Nevertheless, I can't help but find Russell Arben Fox's view compelling: