The Suicide Cult
By Mitch Berg
The quote “democracy can only survive until the majority discovers they can vote themselves largesse from the public treasury” gets attributed to a lot of people; over the years, I’ve seen De Tocqueville and Jefferson, among may others (it’s actually Alexander Tytler).
But what matters at this juncture in history is not so much who said it, or even that it was said. What matters is that we’ve hit that point.
The “Blue Model” of government – first vote to provide goodies at public expense; then turn them into “entitlements” granted by the force of law that can’t be reasonably undone – holds sway in much of this country (including Minnesota); it’s done so for so long, entire generations think it’s the norm. Much of the American populace can’t imagine government that isn’t in the entitlement biz; it’s the same part of the populace that seems to think that these “entitlements” are funded by gold coins borne down from heaven on the backs of unicorns (or “taxes on the 1%”, which are about the same thing).
It’s unsustainable. And that which can not be sustained, won’t be. The next case? Illinois:
The Supremes have spoken: The Illinois state constitution is a suicide pact. Less than two years after invalidating an adjustment to state workers’ budget-busting healthcare benefits, the highest court in Illinois has ruled unconstitutional the City of Chicago’s last-ditch efforts to stabilize its woefully underfunded pension system. The Wall Street Journalreports:
“The Illinois Supreme Court on Thursday rejected a plan to cut future retirement benefits and boost employee contributions for Chicago city workers, undercutting a pillar of Mayor Rahm Emanuel’s strategy to stabilize one of the nation’s most troubled pension systems.The justices ruled the changes would violate the rights of city workers and retirees protected under the Illinois constitution. The Emanuel administration had argued that the changes came as part of an agreement under which the city would increase its annual contributions to two of the city’s four pension funds to ensure they remain solvent.”
So to pay for the golden contracts of generations of retired city workers, the City of Chicago is going to have to raise taxes, cut spending on services (like police, fire, and education – and can you imagine an exquisitely expsensive and utterly failed system like the Chicago schools, with less money?) or, most likely, both. This will drive out established businesses (but for corporate headquarters, of course; CEOs love the urban amenities and are willing to pay the taxes on one building; not the one where the blue and pink-collar proles work, naturally) and inhibit new ones, and worsen the plight of the city’s poor.
It’s called “the Blue Model”.
It’s also called “Detroit, Chapter 1”.
Detroit is in Chapter 4, now. There is no Chapter 5.
March 30th, 2016 at 12:26 pm
Rahmbo is on the correct side of the argument in this case. Just let that sink in a bit.
March 30th, 2016 at 1:06 pm
How much does Detroit owe? $20 billion? A rounding error in the federal budget. The Democrats will bail out Detroit using federal dollars.
March 30th, 2016 at 1:58 pm
Sounds like about time to update bankruptcy law so that states and territories can, like cities, declare bankruptcy. Or modify the Illinois Constitution to allow it for cities.
Puerto Rico is also in deep manure, FWIW. Lots of hard decisions these days because Democrats don’t believe in actuarial science and economics, sad to say.
March 30th, 2016 at 2:02 pm
Bento, Detroit already has declared bankruptcy, discharging about $7 billion in debt. It’s done wonders there.
March 30th, 2016 at 3:05 pm
The Blue social model works just fine thanks; while it may not be thriving in a few places, overall those who follow the progressive model do hugely better than those which follow the alternative red social model.
That is why you see blue states, as distinct from the range of performance of cities, doing overall so much better than red states. Minnesota s a state and Minneapolis as a highly desirable city for a diversified range of businesses illustrate this better than Detroit. Similarly the success of the Scandinavian socialist / capitalist hybrid economies and societies are more successful than those that embrace the free market, which is an abject failure.
An honest and even handed address of this would note the criticism of both social models. I notice you don’t give a good definition of what is and is not the blue social model. You don’t even acknowledge that there is a comparable red social model.
Let me supply what you conveniently cherry picked out:
“While diverting blue state taxes, Southern and Western politicians have stolen blue state jobs. Southern economic development policy in particular has long rested on “smokestack chasing” — luring away industries from the Northeast and Midwest, and, recently, Germany and East Asia, with offers of cheap, non-union labor, low environmental standards and bribes in the form of state and local government subsidies, paid for by higher regressive taxes on the poor.
Don’t be fooled by talk of the “libertarian” West. Red state America is really just the former Confederacy, including Texas, with some over-represented, low-population Mountain and Plains states thrown in. The social ideal of the neo-Confederate right can be summed up as follows: voters who don’t work and workers who don’t vote.
Ever since the federal government deprived them of their slaves, the Southern elite has sought to create the functional equivalent of slavery, by creating a low-wage work force stripped of bargaining power and voting rights. Until the civil rights revolution, the neo-Confederates did this on the economic side by creating unfree labor systems like tenant farming and the convict-lease system, as well as “right-to-work” laws to stifle unionization in their region. Keeping welfare benefits low, and controlled by local elites, forces Southern workers to accept jobs on the terms offered by Southern employers. On the political side, Dixie’s politicians used poll taxes and residency requirements to strip poor blacks and poor whites of the right to vote.
Flash forward to today. What are the objectives of the Republican Party, now that it has been hijacked by the ideological heirs of Jefferson Davis? In economics the goal is constructing a neo-Confederate states’ rights regime, in which states can unilaterally lower minimum wages and lower welfare benefits, in order to create a “reserve army” of workers so destitute they will accept work on any terms. At the same time there is a concerted campaign by Republicans at the state level to use the mythical threat of mass voter fraud to effectively purge poor blacks, poor whites and poor Latinos from the voting rolls, by making it difficult for them to register to vote. (And Northern intellectuals think the politicians of my native South are stupid.)
Already Texas ranks 45th in the percentage of its voting age population that votes. Surely right-wing Texans can try harder and make it to 50!”
The red social model is far more responsible for the problems in this nation than any progressive policies. You also fail to correctly identify the causes of failure.
March 30th, 2016 at 3:42 pm
What’s the matter, DG? Readership at MPP drop into negative territory?
March 30th, 2016 at 3:47 pm
DG,
I thought about replying to your last little novella. But I was simultaneously struck by a couple of realizations:
I mean, if conversation happened, it’d be worth it.
But just crapping and running? That’s kinda narcissistic, doncha think?
March 30th, 2016 at 4:11 pm
Doggone translated: the blue state model is working great. Just look at Chicago, DC, California, and Detroit! And Puerto Rico!
My response: In God we Trust. All others must provide data.
March 30th, 2016 at 4:29 pm
She keeps using (without actually citing) Paul Krugman’s long-debunked assertion that red states take in more taxes than they pay out – a claim that depends entirely on assuming federal lands and military bases are “spending on the locals”.
It’s just stupid.
March 30th, 2016 at 4:29 pm
sorry DG, but the “ideological heirs of Jefferson Davis” are called progressives or Democrats and the last sitting member of the Senate who belonged to the KKK died only 6 years ago and he was hailed as a champion of the Progressive/Democrat ideology.
March 30th, 2016 at 5:19 pm
The problem with the blue model is, like so many models of socialist governance, it is anti-democratic.
By promising over-generous retirements for current government employees, governments commit the taxpayers of the future — who have no say in the matter — to paying for them. This is what is called ‘taxation without representation.’
The key is, as usual, paying for things with other people’s money. If current employees paid for their own retirement (as 401k holders do), there is nothing to exchange for votes, hence the unpopularity of 401k’s to both government employees and politicians.
March 30th, 2016 at 5:39 pm
We in the South are eating the North’s grapes and spitting out the seeds. Every time y’all elect another barking moonbat, my house value goes up, and my taxes go down.
Thanks dg!
March 30th, 2016 at 6:02 pm
“…the success of the Scandinavian socialist / capitalist hybrid economies and societies…” – so long as you’re white, I suppose.
“…Southern and Western politicians have stolen blue state jobs.” – Hey DG, did you see where General Electric is moving their corporate office from Connecticut to Massachusetts? Based on your interpretation, is this blue-on-blue crime?
“…Dixie’s politicians used poll taxes and residency requirements to strip poor blacks and poor whites of the right to vote.” That hasn’t really happened since Ike sent troops and armor to force the Democrats to open the polling places and the schools. Hey DG, did you know George Wallace was a Democrat and that he was a contender for the Democrat nomination in ’72 prior to getting shot?
“…now that it has been hijacked by the ideological heirs of Jefferson Davis?” Funny, the last people driven secession movement happened in lily white, ultra-progressive Vermont. I mean, I’m just saying you might want to think about that.
DG – and I mean this seriously – you really should spend a couple of days at the Underground Railroad Museum in Cincinnati. You’d really learn a lot about your party and it’s long association with racism and oppression in the South.
March 30th, 2016 at 6:41 pm
Posted yesterday on WTTW in Chicago:
“The latest U.S. Census Bureau reported a dubious distinction for Cook County: the second most-populous U.S. county now leads the nation in population loss with over 10,000 fewer residents in 2015 than just a year before. Headlines suggest that unchecked violence, rising taxes, out-of-control politics and failing schools are causing Chicagoans to wave goodbye”
March 30th, 2016 at 7:28 pm
The consequence of backloading employee pensions is that, in theory, taxpayers pay less for services now and more for services later. Since you can’t stop people from moving into and out of tax districts (not yet), you can pay local or state government workers less, now, because they are assured of a generous pension later.
In reality it is something like a ponzi scheme. You need to increase the local tax base as time passes. In reality, what often happens is that you end up in a death spiral. The local tax base does not increase, so the existing tax base increasingly pays for pensions and less for services to the taxpayer. People aren’t stupid. when they find that they are paying more in taxes and receiving less for it, they move. Property taxes drop, the remaining taxpayers pick up more of the tab for pensions and services, and down you go to bankruptcy.
March 30th, 2016 at 8:24 pm
Hey DG;
Please stop attempting to debate economics with your betters. By betters, I mean anyone that doesn’t subscribe to the multiple failures of Keynesian economic models that DemonRATs have been braisnwashed into thinking that they will work.
Here is some data that prove just how great Minnesota’s ignorantly and criminal blue model works.
http://www.americanexperiment.org/publications/commentaries/regarding-minnesotas-budget-new-data-demonstrate-the-problem-with-tax-hike
But, of course, the data included in this article is factual and we all know that facts make the heads of libidot moonbats like you explode.
March 30th, 2016 at 8:28 pm
Turns out, liberalism is a literally a bankrupt ideology. The fact that it continues to attract fans is either a tribute to modern pharmaceuticals or the failure of modern psychiatry.
March 30th, 2016 at 9:13 pm
The problem isn’t Keynesian economics. It is the misuse of keynesian economics. The term has come to mean ‘government control of the economy.’ Keynes developed his economic ideas to modify, not replace, classical economics (e.g. free market economics). The problem keynes tried to solve was the failure of classical economics to explain how the early modern economy worked. Classical economics did not work well if there was no free market of labor or of trade. It also did not work well if inflation meant that people were not rewarded for saving money. Keynes’ idea was that the state would act as a mediator between labor and capital (thus legitimizing trade unions), and would also be a source of capital (since people were less willing to save).
That’s it. That is all that keynesian economics is.
It does not mean that the government should be the driver of the economy. In the keynesian equation for GDP, consumer spending and investment have positive multipliers, government spending does not.
Of course, the world has changed since the 1920s and 1930s. Keynes would be the first to say that his ideas were not meant to be a grand theory of how the economy would work, forevermore.
March 31st, 2016 at 7:56 am
BG +1. And, of course it implied that goobernent knew what they were doing and did not play favorites, etc, ad nauseum. And we all know that is how things really work – in DG’s fairy and unicorn world.
March 31st, 2016 at 9:42 am
Actually, BG, by the end of his career he even discounted the idea that government stimulus was a positive for the economy. His formulation required that government save excesses during good times to spend during bad to stimulate the economy. But only after having observed government far longer than a normal person would require, he came to the realization that politicians have every incentive to spend everything they can and accumulate debt for the next sucker to deal with. With that realization, even he disavowed what is commonly viewed as Keynesian economics.
March 31st, 2016 at 5:58 pm
DG-“Republicans…..to effectively purge poor blacks, poor whites and poor Latinos from voter rolls.” Why in the world would it be any harder if one is poor? What’s your definition of poor? They no doubt have IDs for other things, so let’s see proof of your assertion.