The Conservative Class War, Continued 

Eric Alterman 

February 3, 2011

http://www.thenation.com/article/158283/conservative-class-war-continued

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." 

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