Furbos and Fessos

I found this discussion of the similarities between Donald Trump and Silvio Berlusconi very thought provoking.

http://www.economist.com/news/united-states/21712157-fomenting-cynicism-and-partisan-divisions-his-best-chance-surviving-his-term-donald

In those bits of Italian society from which Mr Berlusconi drew his strongest support, it is a high compliment to be deemed a furbo, or a sly, worldly wise-guy. The furbo knows how to jump queues, dodge taxes and play systems of nepotism and patronage like a Stradivarius. In contrast the fesso is the chump who waits his turn and fails to grasp how badly the system is rigged, or how much of his taxes will be stolen. The fesso might cheer a new clean-air law in his city, naively taking an announcement by the elites at face value. The furbo wonders who in the environment department may have a brother-in-law with a fat contract to supply chimney scrubbers…

Living in that sort of society comes with costs. For decades anthropologists and political scientists have weighed the advantages of living in a high-trust, highly transparent country like Sweden, and measured how corruption and squandered human capital harm places like Sicily.

Then again, when you have had a furbo generation or two in charge, what is the alternative?   A generation or two the minority of which has preached, and even acted, as fessos, but the majority of which has acted as furbos with regard to the common future? The Trump/Clinton generation. And they desperately insist on no one even talking about it, “controlling the narrative” by talking about anything else.

I’m working on the recently-released state and local government finance data from the U.S. Census Bureau, with a goal of releasing a comparison between 2004 and 2014, two years at similar points in the economic cycle, for every U.S. state, and for New York City and the Rest of New York State separately. Because this isn’t a “Census of Governments Year,” as 2017 is (and 2012 was, with detailed data and analysis here)…

https://larrylittlefield.wordpress.com/the-latest-public-finance-spreadsheets/

local government estimates are only provided at the state level, rather than for sub-state areas such as counties. But since the City of New York and the Port Authority of New York and New Jersey are pretty much the only local governments within New York City, and data for these entities are available on an “individual unit” basis, I can provide local government data for the city, and the rest of the New York state by subtraction as well.

In the detailed data made available by the Bureau, the same fields for the different states do not line up. And there were some category changes between 2004 and 2014. As a result preparing the tables has been a bit of grind, of 34 hours thus far. But I can provide some preliminary results.

During that decade the cost of public employee pensions jumped, even as taxpayer pension contributions continued to be below the level that would get the pension funds out of the hole. But the national state and local tax burden stayed right where it has been, at about 10.0% of personal income. That means that collectively, Americans were unwilling to pay more in taxes to overcome the soaring cost of Generation Greed’s retroactive increased and/or underfunded pensions. They have experienced a degradation of public services instead.

There is, however, a huge difference among states. In high tax states such as New York the tax burden has soared further as a percent of its residents’ personal income, even as public services have degraded. And in low tax “red states,” the already low tax burden has fallen in the face of that degradation.  In many cases (but not all) the opposite of what I believe ought to be happening has happened. Whoever already had more has taken more still.

I recently spoke with a resident of one of those Republican dominated states, who said the Republicans now want to raise taxes, mostly sales taxes, after having cut income taxes. My response is that no Republican should ever be allowed to raise taxes. They have increased their power nationally and in many states by promising something for nothing, with most people getting to pay less in taxes (and the best off getting to pay far less in taxes) but with no price to pay for this, in diminished public services and benefits. They never said “here is what you will lose if taxes go down.” They were the furbos, playing the fessos the way The Donald played the suckers who showed up to play at his casinos (and those that financed them).

Now the people should tell the Republicans to deliver, with no increases in taxes and no reductions in services or benefits, or vote them out and damn them for all eternity. Make that political party disappear. That is doubly the case at the national level, where another round of tax cuts for the rich appears to be coming, and a promise is made for no reductions in old age benefits for today’s seniors, but there are already whispers of another round of benefit cuts for those following Generation Greed. So Generation Greed’s debts can be paid off by the less well off generations to follow.

And yet in places like New York people are being played for fessos too. Even though the already high tax burden has soared, all you hear in the news is assertions that those on the inside, the public employee unions and contractors, are being cheated. They should be getting more, and the rest of us should either pay more and more or accept less and less. The ultimate abuse of fessos by furbos here was the huge increase in school spending in NYC, allegedly to improve the schools, all used for earlier retirement, richer retirement, and more time out of the classroom. Followed by demands for even more money. And no elected official in this state ever dares to talk about it.

Basically, if at these tax levels they can’t deliver on all our needs, build the next phase of the Second Avenue Subway, build more housing, help the poor, provide everyone with good schools, etc, etc then every one of this state’s politicians should be voted out and condemned for all eternity. Yet none of them feel the need to say “thank you for the high taxes you agreed to pay. We and our political supporters have an obligation to deliver for you in exchange.” Nope, they never get enough. They want more state aid. Or the city to come up with more money. Blame the federal government. Or just say the $millionaire tax that ALREADY EXISTS should be enacted.

The Democrats in this state have been corrupt, and have abused ordinary people, for 150 years. To get some fairness relative to those working the system, New Yorkers have repeatedly turned to the Republican Party. But with that party equally corrupt at the state level and a total disaster at the national level, that option appears off the table. The Democrats LOVE Trump. Because he means there is an excuse to rip us off even more. Talk about God, Gays and Guns. If you are in favor of the transgendered, accept another round of service cuts and tax increases for even earlier retirement. It’s the same sort of misdirection used in the Red States.

It works as long as people don’t know what is going on. Thus the need for omerta, with no one allowed to talk about “this thing of ours.”

The Daily News recently published an article, based on a report, showing how high the average pension of recently-retired full career teachers is in this state. I later checked the original source, and the data was about the New York State pension system, which covers teachers in the rest of the state, not the city as I believed when I made the comment below. A link to the article was posted on an education site in their daily round up of links. Note that these figures below are in addition to Social Security, for those who are actually senior citizens rather than early retires, and in addition to the guaranteed 7.0% return of teacher 401Ks in NYC, which costs the city $2 billion a year and will for decades. And that the figure for all retirees includes those who worked just 5 or 10 years, and are thus only entitled to small pensions (but full retiree health insurance benefits).

Here is the quote I pasted in from the article, and my comments.

“The data released by the Empire Center for Public Policy said the average pension payments for all 79,742 retirees in New York City public schools was $43,701 in 2016. By comparison, the average pension for those who retired with at least 25 years’ experience in 2015 — and were paid in 2016 — was $68,796. It was even higher for those with at least 30 years of experience — $87,945.”

Aside from inflated pensions due to late career pension spiking, the dollar value is less important than the number of years retired relative to the number of years worked, and whether the retirement benefits are limited to those funded and promised or retroactively increased.

Let me give you an example. I have an uncle who is still working as a teacher at age 74. Once he finally retires, his pension will probably be very large per year — but he will only collect for small number of years relative to the years he worked. That’s the only reason I can think of that across the board, the NY State pensions, which cover local government workers in the rest of the state, are so much less in the hole that the NYC pensions.

Meanwhile, data published by the prior NYC actuary shows that almost no NYC teachers work beyond the minimum 25 years — even those who were promised retirement after 30 years. And retiring with full benefits at age 55, they’ve likely got one year in retirement for each year worked.

Moreover, if they took the 25/55 pension deal, those retiring after 30 years got additional money for working beyond the full retirement age.

When comparing with the pensions of teachers elsewhere, remember that NYC teachers also get Social Security. Unfortunately many other teachers elsewhere do not.

And when comparing with the serfs, remember that the $68,796 in pension benefits for those retiring after 25 years is exempt from state and local income taxes. And the federal payroll tax. Wages and self employment income, of course, is not.

And remember that according to the American Community Survey, the median work earnings of metro NY residents with college diplomas was about $60,000 in 2015, with the median for those with graduate diplomas was around $80,000.

And with all of that, all we get is propaganda about how much more should be paid, and how little we have a right to expect in return.

In response the website not only deleted that link and my response. It wiped out the last three daily posts with a round-up of links on education articles.

Why? Here is what I imagine.

I imagine that all across the city, current teachers in lower pension tiers, paying in 5.85% to the pension (those hired before 2009 pay noting after ten years), expected to work an “incredible” 30 years before drawing a pension instead of 25, and expected to work until age 63 instead of 55, comparing those dollars of average pension payments to their own cash pay.

And parents all across the city, most of whom will have nothing but Social Security and their own savings to live on in retirement, supposedly starting at age 67 but with either their federal taxes going way up or a big cut to their benefits or increase in their retirement age coming, comparing that dollar value of pensions to their own pay. The median of which, for all of metro New York, is (once again) shown here.

chart1

This is just one example of disappearing information. After all, members of Generation Greed don’t want to hear it. And they want to blame someone else, and say that if they benefitted and others are left worse off it isn’t their fault. It’s the politicians that did it. Not my problem.

It’s the Democrats. It’s the Republicans. It’s the unions. It’s the rich. It’s the Muslims, the Mexicans, the Chinese. It isn’t really happening – the generations to follow have not been left worse off. And if they are, we don’t want to hear it.

And so they demand more. The same thing. More tax cuts for the rich at the federal level. And in the Red States. More tax increases in the Blue States. More pension benefit increases proposed for NY public employees every year. Retirement income partially exempted from state income taxes in Rhode Island, even as public services collapse and young workers flee the state.   A similar “bi-partisan” proposal to exempt all pension income in Michigan, a state where the high incomes and rich pensions of prior auto workers have been followed by the $15 per hour contingent jobs of those to follow. More promises that if they take more out, or put less in, it will “cost nothing.”

So what is the alternative to becoming a furbo?

And who do we have running against Mayor DeBlasio? A long-serving member of the state legislature, part of a political family? Those people should be run out of town on a rail. Every one of them. Electing that guy would be like retaliating against the fact that it’s a “rigged system” by electing Donald Trump, one of the people who has worked that rigged system at the expense of everyone else his whole life, as President of the United States.

Yes, as the Economist article suggests, when people outside New York, who must now have known about him, find out The Donald is a furbo who has once again played us for fessos, they are going to be even less willing to trust anyone. In the Generation Greed era, however, the reality is you can’t trust anyone. You can only abandon existing institutions – with their legacy of deals, privileges and inequities – for new ones. I’ve said it before, Donald Trump is THE MAN of his generation.   And that generation is going to keep doing what it has been doing until there is nothing left or someone stops them.

Here, once again, is the true anthem of a generation.  And no, it isn’t “Money Can’t Buy Me Love” by the Beatles, “Lean on Me” by Bill Withers, “Reach Out — I’ll Be There” by the Four Tops, or “Get Together” by the Young Rascals.

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