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Travis Rowley: Union Politics: One Big Racket

Saturday, February 22, 2014

 

Almost a year ago we discussed just how valuable an ignorant underclass is to the Democratic Party . And this week, several issues have served to remind us of a related political observation: Liberalism is the ideology of the mindless and emotional.

For proof of this allegation, we can observe the Left’s favorite activity – taking from some in order to give to others.

Redistribution is linear and visible. Infants have the capacity to understand it.

Grab. Give.

Conversely, is a child likely to imagine a way in which a poor man could improve his lot in life without direct redistribution? How about millions of poor people simultaneously?

Comprehending free market capitalism – how millions of individuals pursuing their own separate interests can secure and deliver resources for vast numbers of people – is not so simple; which is probably why it took thousands of years for humans to figure it out.

For people to resist the temptation to have government directly assist the poor is an unnatural discipline.

Conservatism is learned. Liberalism is trite, and derived from our most basic instincts.


The Politics vs The Reality

Cheer up, liberals. Because the politics of this ideological competition doesn’t favor the free market apologist – particularly as the culture of individualism continues to erode.

This week conservative Fox News commentator Charles Krauthammer analyzed the issue of hiking the federal minimum wage to $10.10 per hour – the populist rallying cry Democrats have chosen for the 2014 elections. After the Congressional Budget Office reported that the Democrats’ plan “would lift 900,000 workers above the poverty line” but would also “cost 500,000 jobs,” Krauthammer explained, “We know that Democrats like to redistribute income, and they pretend it’s always from the rich to the poor. What the CBO has shown, absolutely clearly, is that when you raise the minimum wage, you’re redistributing income from one set of low income people to another set of low income people…There are going to be about half a million people who go from $7 an hour to zero…They’re going to be destitute.”

Krauthammer is exactly right. But that won’t stop Democrats from pretending that there are no costs or tradeoffs in the real world, and that Republicans are disinterested in assisting the poor – instantly whipping up enthusiasm among the emotional, the envious, and the ignorant this election season.


Here in Rhode Island

If Rhode Islanders want an up-close look at how progressives manipulate the uninformed, they can head over to the Hilton Hotel in Downtown Providence, where socialist agitators continue to harass the Procaccianti Group – an Ocean State employer – in an attempt to form an officially recognized union.

Accompanied by City Councilman Luis Aponte (D) and City Councilwoman Carmen Castillo (D), dozens of employees allowed themselves to be organized into rally formation once again this week.

Curious minds had to wonder: By what measure do these workers contend that supporting the efforts of Unite Here – a prominent outfit of organized labor – will benefit them as a whole? On what grounds do they believe that these labor religionists are truly fighting on their behalf?

Have they forgotten that union-Democrats have held dominion over Providence’s City Hall and the RI State House for decades?

Continuously considered to be “the worst place for business,” Rhode Island’s minimum wage is among the highest in the country. So is its corporate tax rate. Providence businesses suffer from one of the highest commercial property tax rates in the country – second only behind the folded City of Detroit.

These are hardly the hallmarks of a region being trampled by its business leaders. In fact, just over a year ago, RIPEC cited the State’s high “cost of doing business” as a major obstacle to an economic recovery – the very thing that unions openly attempt to increase.

Today “more than a fifth of children in Rhode Island are living in poverty, and over 10 percent are in extreme poverty.”

Providence fares even worse. “More than one in three children…[are living] in poverty.” And the average annual income for Providence residents is short of $22,000.

Rivaling certain Providence neighborhoods, it was reported during the summer of 2011 that the “unemployment rate across the building trades [was] running between 25 and 40 percent” across Rhode Island. The secretary-treasurer of the RI Building and Construction Trades Council, Scott Duhamel, called this “unheard of” in the summer, when the unemployment rate is typically between 5 and 10 percent.

Yup, it’s a real “workers’ paradise” around here (well, perhaps for well-off union leaders it is).

But the progressive record matters little in Rhode Island. Unite Here – “through organizing” – specializes in turning “low-wage jobs into good, family-sustaining, middle class jobs.”

Thousands of Rhode Islanders are still buying that crap. They want “fair wages.” And they know of only one way to achieve them.

Grab. Give.

That’s all they know. That’s all they understand. And that’s all progressive Democrats want them to understand.

Travis Rowley (TravisRowley.com) is the author of The RI Republican: An Indictment of the Rhode Island Left.

 

Related Slideshow: Timeline - Rhode Island Pension Reform

GoLocalProv breaks down the sequence of events that have played out during Rhode Island's State Employee Pension Fund reform. 

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2005-2010

In the five years before Raimondo was elected, pension changes included a decrease in established retirement age from 65 to 62, increased eligibility to retire, and modified COLA adjustments.
 
Read the Senate Fiscal Office's Brief here.
 
(Photo: 401(k) 2013, Flickr)
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January 2009

Governor Don Carcieri makes pension reform a top priority in his emergency budget plan. His three-point plan included:

1. An established minimum retirment age of 59 for all state and municipal employees.

2. Elimination of cost-of-living increases.

3. Conversion of new hires into a 401(k) style plan.

 

See WPRI's coverage of Carcieri's proposal here.

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2009

Rhode Island increased mandatory employee contributions for new and current employees. New Mexico was the only other state to mandate current employees to increase their contributions. 

 

Read the NCSL report here

(Photo: FutUndBeidl, Flickr)

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2010

Rhode Island's state administered public employee pension system only held 48% of the assets to cover future payments to its emplyees.

"This system as designed today is fundamentally unsustainable, and it is in your best interest to fix it" - Gina Raimondo

 

Check out Wall Street Journal's coverage here.

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November 2010

Gina Raimondo defeats opponent Kernan King in the election for General Treasurer of Rhode Island using her platform to reform the structure of Rhode Island's public employee pension system. She received 201,625 votes, more than any other politician on the 2010 Rhode Island ballot. 

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April 2011

Raimondo leads effort to reduce the state’s assumed rate of return on pension investments from 8.25 to 7.5%.

Her proposal includes plans to suspend the Cost of Living Adjustment (which allows for raises corresponding with rates of inflation for retirees), changing the retirement age to match Social Security ages, and adding a defined contribution plan.

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May 2011

Raimondo releases “Truth in Numbers”, a report detailing the pension crisis and offering possible solutions. She continues to work to raise public support for her proposal.

"Decades of ignoring actuarial assumptions led to lower taxpayer & employee contributions being made into the system." - Gina Raimondo (Truth in Numbers)

 

Read GoLocalProv's analysis of the report here.

Read the Truth in Numbers report here

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October 2011

Governor Lincoln Chafee and General Treasurer Gina Raimondo present their pension reform legislation proposal before a joint session of the General Assembly.

“Our fundamental goal throughout this process has been to provide retirement security through reforms that are fair to the three main interested parties: retirees, current employees and the taxpayer…I join the General Treasurer in urging the General Assembly to take decisive action and adopt these reforms.”- Gov. Lincoln Chafee

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October 2011

Head of Rhode Island firefighters’ union accuses Raimondo of “cooking the books” to create a pension problem where one did not exist. Paul Valletta Jr. states that Raimondo raised Rhode Islanders’ assumed mortality rate to increase liability to the state, using data from 1994 instead of updated information from 2008, and lowered the anticipated rate of return on state investments.

“You’re going after the retirees! In this economic time, how could you possibly take a pension away?” Paul Valletta Jr (Head of RI Firefighters' Union)

Read more from the firefighters' battle with Raimondo here.

Check out the New York Times' take on RI's  pension crisis here.

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November 17, 2011

The Rhode Island Retirement Security Act (RIRSA) is enacted by the General Assembly with bipartisan support in both chambers. RIRSA’s passing is slated to reduce the unfunded liability of RI’s pension system and increase its funding status by $3 billion and 60% respectively, level contributions to the pension system by taxpayers, save municipalities $100 million through lessened contributions to teacher and MERS pension systems, and lower the cost of borrowing.

 

Read more from GoLocalProv here.

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November 18, 2011

Governor Lincoln Chafee signs RIRSA into law. According to a December 2011 Brown University poll, 60% of Rhode Island residents support the reform. Following its enactment, Raimondo holds regional sessions to educate public employees on the effects of the legislation on their retirement benefits.

 

Read about how Rhode Islanders react to RIRSA here.

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January 2012

Raimondo hosts local workshops to explain the pension reforms across Rhode Island. She also receives national attention for her contributions to the state’s pension reforms.  The reforms are given praise and many believe Rhode Island will serve as a template for other States’ future pension reforms.

 

Read about the pension workshop here.

Read Raimondo's feature in Institutional Investor here

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March - April 2012

Raimondo opposes Governor Chafee’s proposal to cut pension-funded deposits. She continued to provide workshops on the pension reforms.

“The present law is sound fiscal policy and should remain unchanged.” -George Nee (Rhode Island AFL-CIO President)
 
 
See WPRI's coverage of Chafee's attempt to cut pension fund deposits here.
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December 5, 2012

Raimondo publicly opposes Governor Chafee’s meetings with union leaders in an effort to avoid judicial rulings on the pension reform package.  In response, Chafee issues a statement supporting the negotiations.

 

Read more about Raimondo's opposition here.

Read about Chafee's statement http://www.golocalprov.com/news/new-chafee-issues-statement-supporting-pension-negotiations/">here

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March 2013

Led by the Rhode Island State Association of Fire Fighters, unions protest the 2011 pension reform outside of the Omni Providence where Governor Lincoln Chafee and General Treasurer Gina Raimondo conduct a national conference of bond investors.

 

Read about Raimondo's discussion of distressed municipalities here

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April 2013

The pension plan comes under increased scrutiny as a result of the involvement of hedge funds and private equity firms. Reports show that $200 million of the state pension fund was lost in 2012.

"In short, impressive educational credentials and limited knowledge of investment industry realities made Raimondo ideally suited to champion private equity’s public pension money grab." - Ted Seidle (Forbes)

 

Read GoLocalProv's coverage of the State Pension Fund's losses here

Read Ted Seidle's criticism of Raimondo in Forbes.

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June 2013

Reports show that the State’s retirement system increased in 2013 by $20 million despite the reforms being put into effect the previous year.

 

Read GoLocalProv's investigation into the rising pension costs here.

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September 2013

Matt Taibbi publishes an article in Rolling Stone detailing Raimondo’s use of hedge funds as a questionably ethical tool to aid with pension reform. 

Read Taibbi's article in Rolling Stone.

Read GoLocalProv's response to Taibbi here.

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October 2013

As Raimondo eyes the role of Governor of Rhode Island in 2014, more behind-the-curtain information about the 2011 pension reform comes to light.

 

Read more from GoLocalProv about the players in the pension battle here.

 
 

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