Mort Zuckerman Is Back, Blasting American Socialism; Or How America’s Public Servants Are Now Its Masters

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The man who has rapidly emerged as the most vocal Obama critic, Mort Zuckerman, has just penned his most recent scathing anti-administration missive, this time focusing on the schism in US society between "preferred-status" public and shunned private-sector employees, concluding that "Americans cannot maintain their essential faith in government if there are two Americas, in which the private sector subsidises the disproportionate benefits of this new public sector elite." Is this most recent split in US society being cultivated to take the place of the Wall Street - Main Street dialectic, which even Obama is now forced to realize is a fight he is set to lose (just imagine how anti-Obama Cramer would get if stocks drop by 0.001% during the teleprompter's next media appearance)? Certainly, in a society that exists simply on the basis of a simple ongoing "us versus them" distraction, while the true crimes continue unabated behind the scenes, this is not an impossible assumption. Here's a suggestion to Mort and whoever else wishes to peddle more such diversions: how about framing the next conflict where it rightfully belongs: as that between America's people and its criminal ruling elite?

Full Op-Ed below:

America’s public servants are now its masters, first published in the Financial Times

by Mort Zuckerman

There really are two Americas, but they are not captured by the
standard class warfare speeches that dramatise the gulf between the rich
and the poor. Of the new divisions, one is the gap between employed and
unemployed that President Barack Obama seeks to close with yet another $50bn stimulus programme.
Another is between workers in the private and public sectors. No
guesses which are the more protected. A recent study by the Mayo
Research Institute found that “private-sector workers were nearly three
times more likely to be jobless than public-sector workers”.

Political
tension is bound to grow when jobs disappear faster in the private than
the public sector, just as compensation in the former is squeezed more.
There was a time when government work offered lower salaries than
comparable jobs in the private sector, a difference for which the public
sector compensated by providing more security and better benefits. No
longer. These days, government employees are better off in almost every
area: pay, benefits, time off and security, on top of working fewer
hours. Public workers have become a privileged class – an elite who live
better than their private-sector counterparts. Public servants have
become the public’s masters.

Take federal employees. For nine
years in a row, they have been awarded bigger average pay and benefit
increases than private-sector workers. In 2008, the average wage for
1.9m federal civilian workers was more than $79,000, against an average
of about $50,000 for the nation’s 108m private-sector workers, measured
in full-time equivalents. Ninety per cent of government employees
receive lifetime pension benefits versus 18 per cent of private
employees. Public service employees continue to gain annual salary
increases; they retire earlier with instant, guaranteed benefits paid
for with the taxes of those very same private-sector workers.

More
troubling still is the inherent political corruption. Elected officials
tend to be accommodating when confronted by powerful constituencies
such as the public service unions that agitate for plush benefits and
often provide (or deny) a steady flow of cash to election campaign
funds. Their successors will have to cope with the inherited debt burden
– and ultimately the nation’s taxpayers are stuck with the bill.

As
Governor Arnold Schwarzenegger has pointed out, spending on retirement
benefits for California’s state employees is growing at three times the
rate of state revenues, now exceeding $6bn annually and growing at the
rate of 15 per cent a year. In other states, however, the politics of public pensions
appear to be changing. In Michigan, Governor Jennifer Granholm, a
Democrat, recently enacted a teacher pension reform that should save
about $3bn over 10 years by increasing the amount workers must
contribute. Illinois raised its retirement age for newly hired public
workers from as low as 55 to 67. Chris Christie, the Republican governor
of New Jersey, decided that even if it took bruising clashes with
public worker unions, public service compensation reform was essential
for the fiscal health of the state. His stance surprised many, but it
made him a national figure.

There is no quick fix to deal with the
billions in unfunded liabilities. Public service employees are almost
impossible to fire, except after a long process and only for the most
grievous offences. What is more, the courts have ruled in many states
that pension increases granted by elected bodies are vested benefits
that must be paid no matter what, precluding politicians from going back
and changing past agreements.

The only fair solution is to take
the politicians out of the equation and have fully independent
commissions in charge, fixing the scale of salaries and benefits for
public-service workers and establishing an affordable second retirement
tier for new employees. More reasonable retirement ages should be in
order, such as 65 for general employees and 55 for public safety
employees. This would take nothing away from the existing benefits of
current employees.

A fundamental rethinking of the public
workforce is necessary. Americans cannot maintain their essential faith
in government if there are two Americas, in which the private sector
subsidises the disproportionate benefits of this new public sector
elite.