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Edward Ring

The Hypocrisy of Public Sector Unions

During the industrial age, labor unions played a vital role in protecting the rights of workers. Skeptics may argue that enlightened management played an equally if not greater role, such as when Henry Ford famously raised the wages of his workers so they could afford to buy the cars they made, but few would argue that labor unions were of no benefit. Today, in the private sector, the labor movement still has a vital role to play. There may be vigorous debate regarding how private sector unions should be regulated and what restrictions should be placed on their activity, but again, few people would argue they should not exist.

Public sector unions are a completely different story.

The differences between public and private sector unions are well documented. They operate in monopolistic environments, in organizations that are funded through compulsory taxes. They elect their bosses. They operate the machinery of government and can use that power to intimidate their political opponents.

Despite these fundamental differences in how they operate, public unions benefit from the still common perception that they areindistinguishable from private unions, that… Read More

Edward Ring

Investing in Infrastructure to Lower the Cost of Living

California’s civil infrastructure was once the envy of the nation. During the 1950’s and 1960’s the state wisely invested in transportation, water and power infrastructure, delivering capacity well in excess of the needs of the state’s population at the time. Even today, the scale of California’s network of aqueducts and pumping stations to transfer water from north to south, east to west, is one of the largest in the world, and California’s vast network of interstate freeways has few rivals.

Moreover, Californians in that era had planned to continue to expand these infrastructure assets to accommodate a growing population, but that all came to a halt in the 1970’s. During the 1970’s not only were the plans for additional water storage and distribution assets abandoned, but state-owned right-of-ways and land acquisitions both for water and transportation were sold to private interests. California now has a population of 40 million people living in a state with civil infrastructure designed to accommodate 20 million people.

The new political alternative to infrastructure development is conservation. By zoning ultra-high density infill in urban… Read More

Edward Ring

The Unsustainability Lobby

“The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.” – Jared Vennett (played by Ryan Gosling), The Big Short (2015)

Along with anothersuperblyauthentic movie Margin Call(2011), The Big Shortprovides a vivid look into the rigged, Darwinian, ruthlessly exploitative circus popularly known as “Wall Street.” For decades, ever since the greatdepression, this industry slumbered along, sedatelyproviding financial services to Americans. As always, it alsowas a venue for legalized gambling, but the number of players were limited, the winnings were relatively meager, and the opportunities for corrupt manipulations had not yet been multiplied by new trading technologies. Back then, the seedier aspects of Wall Street were overshadowed by the many vitalservices the industry provided. All of that changed starting around 1980.

In 1985, the financial sector earned less than 16% of… Read More

Edward Ring

How the Tax System Favors Government Workers and Punishes Independent Contractors

The 2016 tax filing deadline is now just one month away. Which makes it timely to point out how unfair our tax system is to middle class workers who want to prepare for their retirements. It is also timely to explain how there is a completely different set of retirement rules, far more favorable, that apply to unionized government workers.

If you are a member of the emerging “gig economy,” or a sole proprietor running a small business, or an independent contractor, and if you are reasonably successful, then you paying nearly 50% of every extra dollar you earn in taxes. The following table showsthe marginal tax burden for independent contractors who earned more than $81.5K and less than $118.5K in 2015:

Marginal Tax Rate for Independent Contractors (for 2015 earnings > $81.5K and < $118.5K)

The… Read More

Edward Ring

Public Unions ARE the Political “Establishment”

The success of anti-establishment presidential candidates are a powerful reminder that mainstream politicians are not managing America’s political economy or cultural evolution in a way that satisfies most of the electorate. That’s no surprise – it’s a toughjob these days, with few historical precedents to offer guidance.

Earlier this week an essay published in theAsia Times,A Millennial conundrum: Communism and youth,” offered a concise set of reasons why so many millennials are supporting democraticsocialist candidate Bernie Sanders.The author, Chan Akya, didn’t chastise these youth for their selfish naivete, causedby receiving too many participation trophies during their sheltered childhoods. Instead he gave the following reasons:

“(1) Sharing economy: Technology has propelled sharing into new markets, from cars and vacation homes after opening up personal space on platforms such as Facebook, Twitter and Instagram. For people with itinerant lifestyles driven by mobility in jobs, such a sharing economy may end up shaking theRead More

Edward Ring

The Future of Unions in the Post-Scalia Era

“The ‘Scalia Dividend’ Is a Rare Opportunity for Unions.” – Shaun Richman, In These Times, February 16, 2016

The implications of Antonin Scalia’s sudden and tragic death have already been painstakingly explored by anyone involved in union reform. There’s not much to add.But what members of the labor movement have to say about this new reality may be worth a look. And despite the title of the above-notedarticleby Shaun Richman,for the pro-labor publicationIn These Times,most pro-labor pundits are not optimistic about the future of the labor movement. Richman writes:

“Labor’s crisis predated Friedrichs and will live on after it. The ‘Right to Work’ agenda, and the gutting of public sector collective bargaining laws, will continue to be pressed at the state level. And if the general financial commitment and philosophical approach to new union organizing remains the same, union density will surely continue to decline.”

In the pro-labor publication Workday Minnesota, in a… Read More

Edward Ring

California Initiative Would Require Legislators to Wear Logos of Donors

If youarebemused by the success of populist candidates for President, if you think national politics in America is at risk of becoming a circus spectacle, get ready. Because that circus is coming to California. Southern California businessman John Cox is collecting signatures for aballot initiativethat will require state politicians to wear the logos of their top ten campaign contributors.

If voters approve this measure, every time a state senator or member of the assembly votes on the floor or in a committee, they will have to wear these logos on their jackets. As the text of the initiative puts it, “the disclosureshall be printed clearly and legibly, be conspicuous and in a type sizesufficient that it can be read by a member of the public observing any public session of theLegislature or a Committee thereof.”

Truth is indeed stranger than fiction. But then again, isn’t Cox’s initiative just making explicit what everybody’s known for a very long time? As Cox puts it, “unions and corporations have too much power and it’s time we stand up and fight. The ‘California is Not For Sale… Read More

Edward Ring

California’s Pension Contribution Shortfall At Least $15 Billion per Year

“Pension-change advocates failed to find funding for a measure during the depths of the 2008 recession and the havoc it wreaked on government budgets, so they won’t pass (a measure) when the economy is doing well.” – Steve Maviglio, political consultant and union coalition spokesperson,Sacramento Bee, January 18, 2016

It’s hard to argue with Mr. Maviglio’s logic. If the economy is healthy and the stock market is roaring, fixing the long-term financial challenges facing California’s state/local government employee pensions systems will not be a top political priority. But that doesn’t mean those challenges have gone away.

One of the biggest problems pension reformers face is communicating just how serious the problem is getting, and one of the biggest reasons for that is the lack of good financial information about California’s government worker pension systems.

The California State Controller used to release a “Public Retirement Systems Annual Report,” that consolidated all of California’s 80 independent… Read More

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