The Conservative Class War, Continued

by: Eric Alterman | The Nation | Op-Ed

It was a terrible tabloid tale. While New York City was buried under a blizzard, widows and orphans freezing and starving in their apartments, union fat cats swigged brewskis and chuckled to themselves as sanitation workers conspired to stage a slowdown to gain leverage in their contract negotiations. “The selfish Sanitation bosses who sabotaged the blizzard cleanup to fire a salvo at City Hall targeted politically connected and well-heeled neighborhoods in Queens and Brooklyn to get their twisted message across loud and clear,” screamed Rupert Murdoch’s New York Post. From there, the story ricocheted across the media, to Investor’s Business Daily to Fox News (naturally), and even to Saturday Night Live. The Washington Times ran an op-ed that began, “Cross us and people will die.”

Alas, it never happened. The source of all this hysteria was a sketchy story told by Daniel Halloran, a rookie councilman and Tea Party Republican—who is also an adherent of the neo-pagan religion Theodicism. A New York Times investigation weeks later found no evidence to support the allegation, and it turns out that Halloran isn’t so sure about what he thought he heard after all. But the damage is done. (Murdoch properties are not exactly famous for correcting their errors; though, to be fair, if they did, there would hardly be time or space for anything else.)

Can it be mere coincidence that the right-wing media promoted this phony-baloney story at a moment when, as Charles Loveless, legislative director of the American Federation of State, County and Municipal Employees, points out, conservatives are “readying a massive assault” on the pensions and benefits of these same employees?

Led by Newt Gingrich, conservatives are floating the notion that states should be allowed to declare bankruptcy to escape their pension obligations to firefighters, cops, teachers and, yes, sanitation workers. Gingrich called on House Republicans “to move a bill in the first month or so of their tenure to create a venue for state bankruptcy.” This was followed by a plea in The Weekly Standard by University of Pennsylvania law professor David Skeel titled “Give States a Way to Go Bankrupt.” Skeel later told a reporter that he had “never had anything I’ve written get as much attention as that piece.” He said he had been contacted by lawmakers from all over.

Depending on the audience, this discussion serves multiple purposes. Most obviously it is intended to blame the unions for local fiscal woes and garner support from the public for the coming assault on their pensions. Second, it serves to intimidate the unions and encourage givebacks lest these same officials be forced to go before taxpayers with a plan to cut services, raise taxes or both—making public unions the culprit in any of those options. Third, it weakens the unions’ appeal to new workers, for if they can’t protect the pensions of their workers, what’s the point of joining in the first place? Given that public unions provide the lion’s share of poll workers, envelope stuffers and other volunteers for Democratic campaigns, this is hardly an ancillary benefit, from the right’s perspective. With private union membership now in single digits, public unions remain just about the only institutions with sufficient financial and organizational muscle to make a difference in close elections at the state and local levels or to organize progressive pushback against corporate malfeasance.

The assault on public employee unions is the next phase of a forty-year class war in America by the rich against the rest of us. It is of a piece with the steady dismantling of our progressive taxation system and the explosion of economic inequality. Total income going to the wealthiest 1 percent of Americans has risen from about 8 percent in the 1960s to more than 20 percent today. As Jacob Hacker and Paul Pierson demonstrate in their recent book, Winner-Take-All Politics, this is the result of deliberate policy choices made by politicians in the service of those who fund their campaigns. Congress has repeatedly cut tax rates on top earners, along with capital gains and estate taxes. And as Robert Lieberman, writing in Foreign Affairs, recalls, during the 1990s the Financial Accounting Standards Board, which regulates accounting practices, attempted to put a stop to the practice of allowing corporate CEOs to compensate themselves with massive stock-option packages, correctly predicting that it would lead to an epidemic of deceptive accounting practices. “But Congress, spurred on by the lobbying efforts of major corporations, stopped the FASB in its tracks.” The result? For the past twenty years we’ve allowed CEOs to enrich themselves at the expense of employees and stockholders “through the mutual back-scratching habits of corporate boards.”

In the meantime, statistics demonstrate the speciousness of the conservative case for states facing budget crises to default on their public pension obligations. The Center on Budget and Policy Priorities released a report recently demonstrating that, in fact, they have “adequate tools and means to meet their obligations.” To the degree that some states appear to be in real trouble, explains a June report by two Federal Reserve Bank of San Francisco analysts, this the result of a “profound macroeconomic shock” rather than pension obligations. Yet another recent study—this one from Boston College’s Center for Retirement Research—found that while many state pension funds may be “substantially underfunded,” they account for just 3.8 percent of state and local spending and could be covered with an increase to just 5 percent.

Yet snowjobs like those promoted by Murdoch, Gingrich and New Jersey Governor Chris Christie are painting a bull’s-eye on the back of public unions. “People I don’t even know are calling me horrible names,” Marie Corfield, a New Jersey art teacher who found herself on the other end of Christie’s antiunion rant, told the New York Times. “The mantra is that the problem is the unions, the unions, the unions.”