Collective Conscious

In the past I’ve high­lighted the regres­sive nature of state-​​level tax­a­tion and state-​​level bor­row­ing. Today we’re going to look at the espe­cially painful con­se­quences of state-​​level aus­ter­ity. It’s no sur­prise that state employ­ees aren’t par­tic­u­larly wealthy, nor is it a sur­prise that they’re some of the most pop­u­lar and vis­i­ble ele­ments of gov­ern­ment: fire­fight­ers and police­men, say, as opposed to far-​​away ‘reg­u­la­tors’ and ‘bureau­crats’. Here’s what hap­pens when aus­ter­ity is forced on states:

The pres­sure is on to shift the heavy costs of eco­nomic cri­sis onto the mid­dle– and low-​​income com­mu­ni­ties already stung by unem­ploy­ment, fore­clo­sures, reduced job ben­e­fits and ris­ing job inse­cu­rity. The cam­paign to make the mid­dle– and lower-​​income Amer­i­cans now focuses on pub­lic employ­ees – espe­cially their num­bers, incomes and ben­e­fits. Bat­tles loom over which state and local job hold­ers get fired, whose pensions/​benefits will be reduced, and which pub­lic ser­vices will stop being available.

Politi­cians will keep silent on the key alter­na­tive to deep cuts – pre­cisely because it would oth­er­wise be on most cit­i­zens’ agen­das. That alter­na­tive would be to raise the tax share paid by lead­ing firms and the wealth­i­est 5–10% of cit­i­zens. In most cases, this means return­ing to the lev­els of tax­a­tion in the 1980s. What­ever may be needed in the way of rea­son­able ratio­nal­i­sa­tions and sav­ings in gov­ern­ment bud­get out­lays, we will not exit the con­tin­u­ing eco­nomic cri­sis by mas­sive reduc­tions in pub­lic ser­vice pro­vi­sion and employ­ment. Those only fur­ther depress the eco­nomic con­di­tions and well­be­ing of mid­dle– and lower-​​income com­mu­ni­ties. This would be a more and more cruel ver­sion of the track we have been on for decades. Sadly, this approach is nei­ther new nor likely to work.

In Nas­sau, here’s what hap­pened when Tea Party gov­ern­ment took hold:

In late 2009, locals elected Edward P. Mangano as their county exec­u­tive — one of the first big upset vic­to­ries for the so-​​called [Tea Party] “move­ment” — after run­ning on a pre­dictable plat­form. Mangano would slash taxes, cut spend­ing, and cre­ate a nice lit­tle utopia. Vot­ers loved the sound of it.

A year later, “Eddie” had slashed taxes as promised, but strug­gled to limit pub­lic ser­vices that the com­mu­nity had grown to appre­ci­ate. This week, the con­se­quences of Tea Party eco­nom­ics became clear — Nas­sau County, fac­ing a full-​​fledged fis­cal cri­sis, saw its finances taken over by the state.

And here’s the state step­ping in to solve the cri­sis. Watch how the Tea Partier crit­i­cizes the state for not putting the hurt on gov­ern­ment employ­ees. Hurt­ing the lit­tle guy seems to be an active part of the upward-​​redistributive plat­form.

The takeover was sup­posed to be con­sid­ered in late Decem­ber but the deci­sion was delayed when the county’s exec­u­tive, Repub­li­can Edward Mangano, asked for and received three addi­tional weeks to come up with a bud­get the over­sight board con­sid­ered to be seri­ous and bal­anced.  After cut­ting county taxes a year or so ago but not cut­ting spend­ing to off­set the impact, Mangano appar­ently con­tin­ued to rely on pro­pos­als the over­sight board thought were noth­ing but gim­micks.  The vote was 6 to 0 to take over the finances and was sup­ported by Democ­rats, a Repub­li­can, a Con­ser­v­a­tive, and an independent.

What did Mangano do in response to the takeover vote?   He crit­i­cized the board for not tak­ing over the county’s finances in a way that would allow it to imme­di­ately freeze the salaries of county workers.