By Marc Salomon
July 6, 2010
The common wisdom in conservative economic circles as trumpeted by FoxNEWS these days in serious, stentorian tones, is that the economy is broke rather than broken, and that we are saddled with massive unfunded pension and health care liabilities, which are deemed unaffordable and unsustainable. The solution, according to those whose economic ideology got us into this mess, is to cut wages, pensions and health care, and to welcome these austerity measures and our new status as serfs as inevitable. The unacceptable alternative to austerity for them would be that those responsible for the economic mess be wiped out in a wave of bankruptcies, which would mean them. To avoid this, they will spend lavishly to convince us that we are to blame for their errors and convince us to transfer the meager resources of hundreds of millions of us into their coffers to make them not just whole, but to further enrich them.
Progressives hold that pensions and health care are fully funded by existing tax revenue streams. To the contrary, there exists massive, unfunded obligations to cover the losses of Wall Street investment banks and the massive bills for Wall Street’s other profit center—economically unproductive wars largely ineffective – of our own choosing – which are being shifted to the taxpayers’ balance sheet. Locally, taxpayers offer up significant subsidies to developers of profitable market-rate housing. Working Americans, who have done nothing wrong, should not be made to take the hit for the failures of the high-flying financial elites while they keep most of their winnings.
“We” did not run the economy into the ground because of “our” profligate spending. Right wing economic actors see a long-awaited golden opportunity to play lead roles in a production of Naomi Klein’s “Disaster Capitalism,” to take full advantage of crisis to achieve the long held policy goals. They desire more of the same: continued outsourcing of jobs; lowering of wages; dismantling of the public sector; and increased penetration of the financial sector into each and every one of life’s necessities; primarily health care and retirement, in addition to education, housing, driving and, when incomes falter, consumption, to make up the gap.
The pressing question here is why are “progressives” or even “liberals” such as Public Defender Jeff Adachi auditioning to move from demon faces on Glen Beck’s chalkboard to honored guests on his show by teaming up with billionaire venture capitalists to practice Disaster Capitalism in San Francisco? Is this another case of “Independent” politicians making the “tough choices” required to deal with our “common problems?” In order to prove their mettle, right-wing politicians bash on the left, their opponents’ base. For lefties to prove their “independence,” must they, too, bash the left, their own base?
For all of San Francisco’s diversity, we were quite unified in support of federal health care reform that included a public financing option. There was also broad support in these parts for President Obama’s promise that if you liked your health care the way it was, that you could keep your health care. San Franciscans from all walks of life were outraged when Montana Senator Max Baucus singlehandedly sabotaged the public option last year while taking “Big Sky” contributions from the health insurance industry.
Thanks to the late Joe Lynn’s law requiring signature initiative campaigns to report their expenditures, we can ask why progressives like Jeff Adachi raises hundreds of thousands of dollars from Pacific Heights residents Michael Moritz and Harriet Heyman to finance an assault on kids’ health care and their parents’ ability to put food on the table? Moritz, a Forbes 400 member, made his billions from Sequoia Capital Partners, a ground floor Google.com investor, and Heyman, same address, is designated as “retired” (do you have any Grey Poupon?). Moritz has also contributed to Baucus’ Senate campaigns. Whether on Wall Street or venture capital row on Sand Hill Road in Palo Alto, the common goal amongst these super rich is a bulk transfer of wealth, impoverishing working Americans to enrich the finance class. Why again are progressives like Adachi giving aid and comfort to that project?
The same people who helped bring you the “individual mandate” to purchase skyrocketing private insurance that provides spottier and spottier coverage each year, without a public option and with severe tax penalties for failure to comply, are now pushing a campaign to shift the cost burden of health care from the broad base of taxpayers onto the narrow shoulders of families of City employees. Tucked into section (e) of the measure is language that limits the City’s contribution to dependent health care to 50 percent of the cheapest plan. Watch the City pick the skimpiest plan to set that baseline. This will mean increases of hundreds of dollars per dependent, per month to maintain health care for kids, which most San Franciscans see as a human right worth socially financing. Former Supervisor Tom Ammiano’s Healthy San Francisco program enjoyed unanimous support amongst the political class.
This measure would address perhaps $170 million out of $6.5 billion in the City’s budget this next year, according to proponents. The measure’s proposed 9 percent mandatory employee contribution to retirement when combined with recently negotiated 5 percent pay cuts and 12 unpaid furlough days, this measure would blow a hole in tens of thousands of moderate income kitchen table budgets, displacing folks from San Francisco, and would leave children without the kind of quality health insurance that full-time workers and their families deserve, all for 2.3 percent of the City budget.
Since the beginning of the Wall Street crash, finance capital has launched a global war on the public sector and public support for retirement and health care security. Many who hold right-wing values find this turn of events quite providential and would gleefully spur us all on in the race to the bottom. But those who hold progressive values should respond to this tsunami of barbarity with a message that suggests we can guarantee dignified retirement security to all instead of leveraging resentments at retirement insecurity to reduce all to poverty.
The pattern is clear: We see bond vigilantes in Europe attacking the social welfare system. In a pincer move, Moody’s rating service, the ones who brought us those “investment grade” rated Mortgage Backed Securities, just lowered San Francisco’s bond rating which will increase our borrowing costs, not because the City has missed a single bond payment. Moody’s now deems San Francisco’s benefit obligations too high. The common thread here is that financial speculators, like those at Sequoia Capital Partners, oppose providing public social services with tax dollars. In the face of a crisis of their own making, the finance sector remains undaunted, and across the table is doubling down on the failed policies that have led us into the chasm.
When Adachi first thought of this last year, perhaps the pension provisions made sense conceptually. But in the intervening months as the legislation took on specifics, especially in the context of increasing speculative vigilantism forcing the US and Europe to race to the bottom, the circumstances have changed. When Obama committed the US to more, deeper offshore drilling earlier this year, he had to at least appear to dial back on that pledge after circumstances changed in the Gulf of Mexico.
Adachi should have realized that his measure’s sails are being propelled by the worst, most regressive winds in American politics, winds that are only effective because organized labor has failed miserably to promote an alternative. Union failure should not be a predicate for kicking kids off of quality health care. It should not be a predicate for bumping health care costs for lesbian and gay domestic partner and retirees to $500 per month. The fact that everyone is being pushed off a bridge is not a progressive rationale for pushing everyone off the bridge. Progressives need to be the suicide barrier here.
Adachi is misrepresenting current city policy with respect to retirement contributions. The lower ranks of labor, which have conceded wages and benefits for eight of the past ten years, has more than done its part. For this next year, most workers’ concessions include a mandatory 7.5 percent salary reduction dedicated towards a retirement fund contribution, and a mandatory 5 percent salary cut for two years. Most city workers are now required to contribute to the retirement fund. This proves that such language has no place in the City Charter. Adachi must correct the record to accurately reflect reality.
Those “hundred thousand dollar” employees at the SFPD, SFFD and Municipal Executives Association, the ones earning enough so that their margins can withstand a 10 percent cut without threatening their basic livelihoods, have not sacrificed in kind and enjoy much richer, earlier vesting benefit packages. I would add that I was one of two members of the public to oppose the budget busting “loss leader” SFPD-raises in 2007.
Most of these civilian high dollar workers were brought into the system when former Mayor Willie Brown’s “Special Assistants” were converted to highly paid civil service employees represented by the Municipal Executives Association. This represents the introduction of added obligations to the retirement system which has not been accounted for, one that capped Willie Brown’s doubling of the fiscal footprint of City government. High dollar workers should be dealt with proportionately to their hit on the retirement system.
Let’s get this clear: Adachi says that he was driven to push this measure because of difficulties in securing funding for the Public Defender’s office. He claims that city workers are going to need to learn to live within their means, that stern, fiscal discipline and austerity are what is needed here. What Jeff Adachi is saying is that law-abiding kids of law-abiding City workers should lose health care or housing so that those accused of crimes might enjoy top-shelf legal representation. He is begging this comparison with this measure.
It should be quite a show the next time that Adachi petitions the Board of Supervisors for additional funding when he brings in his foot soldiers to clash with labor. Perhaps the politically optimal solution would be for those who are accused of crimes, who Adachi’s new mansion dwelling friends might dismiss as “low lifes,” (and might well believe they wouldn’t be charged if they weren’t guilty anyway) to live within their means and accept the minimal constitutional standards for criminal defense counsel.
No other city offers up such generous employee health and retirement benefits Adachi says. How many cities offer up an elected Public Defender? How many finance Cadillac standard of luxury level public defender services when a Volkswagen is legally sufficient? Most have a judge appoint a local attorney to defend the accused for free and are dispensed with the matter so that the public sector might be relieved of these onerous, excessive burdens. Can we really even afford the luxury of a vigorous Office of the Public Defender in these troubled times when there are constitutionally conforming less expensive options available? Again, Adachi begs this question, which is the logical flip side of the case for his measure.
Adachi is going to have an even tougher row to hoe before a Finance Committee with potentially fewer allies, as progressive candidates will face headwinds because Adachi insisted on running this initiative on the same ballot when progressives running on progressive values were making viable plays for open seats. The last thing that candidates facing a conservative onslaught need in an election year is to fight friendly fire, to run Adachi’s reactionary gauntlet. Conservatives on the Board of Supervisors are not going to suddenly vigorously support indigent criminal defense just because the Public Defender agreed with them on pensions.
Adachi has a choice here, he can adapt like Obama has in the Gulf and recalibrate his policy approach to labor reform based on the very disturbing context of the global war on health care and retirement security, or he can follow the path of former President Bill Clinton on NAFTA and lead his allies into political oblivion on behalf of the super rich. The Clinton effect was the Republican surge in the wake of Clinton’s DLC abandonment of his base, both in Arkansas and Washington, D.C. which led to fifteen or more years of disastrous single-party Republican rule.
Problems with Adachi’s measure:
- Adachi misrepresents current public policy when he says that most city employees are not required to make contributions to retirement, requirements that most city employees contribute 7.5 percent of their salary were negotiated this year along with a 5 percent wage concession;
- Financed by a Forbes 400 investment banker billionaire, this measure advances investment banker interests at the expense of working families;
- Leverages resentments at the retirement security of others, appealing to the worst, most reactionary instincts of the electorate to raise barriers to access to quality health care;
- Spurs on the race to the bottom during times of insecurity instead of promoting collaborative progressive policies for mutual advancement;
- Accepts and advances the conservative framing of the issue;
- Leads to kids losing health insurance;
- Shifts costs from predictable benefits to at-least-as expensive crisis public health intervention;
- Regressively treats the lowest paid city employees equivalently to the “hundred thousand dollar” club;
- Cements regressive policy in the Charter based on atypical short term projections.
- Progressive rates of retirement contribution phased in based salary level and on ability to pay;
- Affordable health care is a right, the budget should not be balanced on the backs of children’s health;
- Retirement resentment can be checked by progressives buying folks into promoting the elimination of the income cap on FICA payroll taxes and having the conversation about retirement security instead of cynically leveraging resentments and insecurities;
- Treat investment banker income as income (35 percent tax), not capital gains (15 percent tax) so that they would have less money with which to wage class warfare;
- Shift the burden of criminal representation for misdemeanors and lesser felonies to the private bar.
- Eliminate overtime for SFPD uniformed managers.
Against this backdrop, progressive municipalities should actively oppose the enclosure of those remnants of the economy which have not been outsourced by finance capital. This means taking control of the creation of credit from the banks. A progressive mayoral candidate I once knew proposed a public “Bank of San Francisco” to take deposit of city finances, to create inexpensive municipal credit and to promote sustainable local economic development. The Bank of North Dakota has successfully served this role for that state for decades now. City government is held suspect, but at this point I believe that when contrasted with Wall Street’s maliciousness, the risk of minor local corruption is minimized by the benefits of public finance capitalism with a local face.
Our ideas are better only when they are our ideas.
At the end of the day, ideology is the scaffolding that holds up those illusions which dominant reality requires. That we don’t even know that it is there is testament to its effectiveness at structuring how we comprehend our reality and how we negotiate through it. Only under the dominant ideology, does Adachi’s proposal work, because it cuts government and benefits while shifting resources to the financial class. Once we take off those particular ideological glasses and view the measure through a progressive prism, evaluated against progressive values and priorities, we can see how it really does not work, that the savings illusory, is merely shifted from taxpayer onto kitchen table. A proposal such as this would “work,” from a progressive perspective, only if it were equitable, if it shifted resources from the super rich and well-off to the moderate income folks and below.
Marc Salomon is a 20-year North Mission resident, a homeowner and property tax payer, partnered to a 20-year City and County of SF employee, an SEIU household, has relied on his dependent health insurance since 1991 for treatment for hepatitis C, insurance that he would no longer be able to afford should Adachi’s measure pass.