February 26, 2014
The Washington Post complained that the people of San Jose California are suffering because the city has to pay higher prices for computers and software because of the patent and copyright monopolies the government has given to Microsoft and other tech companies. Okay, the Post would never write such a piece, but it has no problem headlining a news article:
“In San Jose, generous pensions for city workers come at the expense of nearly all else.”
The central item in the piece is the complaint of San Jose’s mayor about the money he must pay to support the pensions of retired city workers. Of course the pensions for city workers are based on contracts that the city signed and are part of their pay. This piece makes no effort to assess the size of city workers’ total compensation packages compared to private sector workers, so it really has no basis for its assertion that the pensions are generous. If public sector workers sacrificed substantial pay and/or made large contributions for these pensions, then it would be highly misleading to describe them as generous.
Furthermore, cities usually are not allowed to go back on contractual obligations short of bankruptcy. San Jose undoubtedly sold off many plots of property at prices that were far too low. If the city still possessed these properties and could sell them at the current market price then San Jose’s mayor would have plenty of money to meet the needs that he complains he cannot address. But the Post apparently does not want readers to question the legitimacy of land sales, just workers’ contracts.
Interestingly, the piece discusses the financial industry’s efforts to derail a proposal for the state to offer a voluntary low-cost retirement plan to all its workers. The industry is complaining that it doesn’t want the competition with the public sector. In effect the industry is demanding that people should be taxed — paying more than necessary in fees — in order to ensure that the financial industry can make profits on their retirement accounts. “The financial industry wants to tax Californians to ensure profits,” would have been a more interesting and accurate headline for this piece.
Note: Original post modified slightly (7:45) and typo corrected — thanks Robert Salzberg.
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