Life, Liberty, and the Pursuit of Happiness, Version 4.0

Tea Party Patriots protesting in Washington, D.C.

While we watch revolutions for political democracy in Tunisia, Egypt, Iran, we are distracted from thinking about the revolution aimed at economic democracy growing in the United States. This revolution, symbolized by the Tea Party, is leading a growing demand for restructuring the taxation and spending habits of the United States and the individual states within it. This movement is pushing for reform in the United States, but it is more likely to be an economic revolution than a political one.

The Collapse in Russia in 1991

1991 aborted coup attempt in Russia

Having visited Russia over a dozen times before, during, and after the changes for 1989-1992, I witnessed the growing unrest in young people who graduated from college and could not get work. When the Russian revolution came, it was a political revolution aimed at ending the state control of the economy by an elite ruling class known as the nomenklatura[1] that was disenfranchising youth as those with positions selfishly hung onto them with tenacity. The elite had special shops, fashion shows, and hotels while state-run stores that served the common citizen had empty shelves and long lines. It was a society with a visibly growing double standard in which the elite were self-absorbed and inattentive to the needs of their children’s generation. Continue reading →

Traditional Corporate and Government Pension Plans are Unsustainable

Traditional Pension plans in which a government entity or corporate entity self-funds and manages pension benefits have outlived their usefulness for retirees. Such plans, intended to pay out guaranteed retirements, have proven to be too speculative or poorly managed. Many plans were miniature ponzi schemes that assumed the entities would have continual expanded growth or eternal life. In the 1940s and 1950s when America was experiencing rapid growth and industrial development, corporate and government managers frequently promised employees healthy retirements and encumbered their institutions with future obligations that eventually could not be funded.

Not only were corporate and government pension plans unsustainable in the long run, they were often implemented as a way for corporations and government bodies to accumulate a pool of employee cash that they could borrow against or invest in the stock market, hoping to make a healthy return. This type of bureaucratic greed-based speculation has often proven more disastrous for retirees than more modest private accounts would have been. Continue reading →

Income Inequality, Government vs. Private Jobs

The United States has to rethink the nature and cost of government jobs. Government jobs, especially federal jobs are paying far better than the private sector. In 2008 federal workers averaged wages of $8,000 higher than the private sector and in 2011 that gap has widened further.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available. (Dennis Cauchon, USA Today)

On top of this, governments offer retirement and health insurance benefits at a much higher rate than private industry. One result is that people are scrambling to get government jobs, particularly federal jobs where the pay is the highest, and they are lobbying for more government job creation because such jobs are considered secure. This takes talented people out of the private sector where they could help grow the economy. The second result is that the economy cannot support all of these jobs, which are funded by taxes on nongovernment workers. This is causing governments to go bankrupt and increasing private citizen anger over a sense of injustice fueling movements like the Tea Party. Continue reading →