While listening to the morning radio show this morning, I found myself hearing some interesting discussions between the radio hosts and their various guests. Two in particular caught my attention.
1. A retired public official, who now makes a living berating the public sector, was on talking about how the state government was in hot water financially, and that the only way to get out of it was to cut the pay of public workers, cut their benefits, cut their retirement, cut their positions, and cut agency budgets. Cut, cut, cut. And this has to happen NOW, he says. It had to happen YESTERDAY!
Now, it's true that the average compensation for public workers in this state is about 10K higher than the average private sector compensation, and if you add in benefits, the difference is about 25% in favor of government workers. Here's the thing though: public worker salaries fall in a much closer margin than private sector. Consider this: the minimum amount a public employee makes is around 25K/ year. The minimum amount a private employee makes is considerably less (not sure on the specifics, but considering how many people work 20 hours a week or less for the minimum wage, you can probably figure it out.). Then, look at the top-tier earners. In public positions, top-tier is far less than 250K, while top-tier in the private sector can easily reach into the millions.
Now, this individual also wanted to get rid of the public-sector unions, pay raises based on cost of living increases, annual pay raises in general, and retirement packages that were not 401Ks. No where in this entire debate did this man suggest raising taxes, reducing tax loopholes, cutting subsidies, or anything else. He's specifically going after state employees and teachers. His argument is that these individuals are being overcompensated, and that they are making huge amounts of money on the backs of the taxpayers. Considering the amount of money being made by some people in the private sector, this accusation really hits a wall.
2. This one goes in a slightly different direction. A local realtor, who is a regular on the program, came on the show today and said (and I paraphrase): Your home is like your own personal savings account. If you sell your home, and downgrade to something smaller, you'll have a good amount of money left over to live on!
Okay, that's true. But when you start thinking of your home like your own personal bank account, you start down the same road of logic that led to the housing bubble. You're talking about people tapping into their home's value, and using that money to live on and make investments. Well, that's exactly what happened in the 2000's and what caused the crash in 2007/2008.
It really bothered me that a prominent realtor would be making the same argument in 2012 that led to the financial collapse and recession of 2008. It's as if the last few years never happened, and that the economy is bad for some reason other than rampant greed and mismanagement of the mortgage market. And this person should know better. Sure, having a person downgrade to a smaller home is good for their business, but they should know that the avenue of thinking they are promoting is dangerous and has been shown to be devastating to people's livelihood.
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What these stories showed me was that we are most certainly a long way from acknowledging the truth about our circumstances, the logic in the solutions being proposed, and the root causes of our national recession. It shows me just how hard it is to get through to people like this, who honestly believe what they say, and for whom facts have no consequence. In the first story, there is the added bonus of a person who clearly has no comprehension of the fact that he is advocating for the dissolution of people's legacies, that he is talking about wiping out people's retirement plans, slashing the pay of people who depend on it, and seems to misunderstand the impact of what he is advocating. All of this, presented through the radio, and practically heralded as the end-all solution to our greatest woes. How do you compete with such ignorance and shallowness of reasoning?