Tuesday, March 8, 2011

How Blatant Lies Become "Fact" in These United States

A cartoon in today's local newspaper represents the outright lies a gullible electorate believes, partly because the mainstream media repeat them as fact without bothering to do basic journalism checking them out.

It depicts a thuggish, bloated figure labeled "unions" riding the back of a small, overburdened figure labeled "taxpayers."

Its creator accepted as fact the blatant lies that have been repeated countless times in print, on the radio and on television, especially since the Wisconsin public employe protests began.

The media have parroted without challenge Wisconsin Gov. Scott Walker's wildly untrue statements in support of his so-called "budget repair bill," a thinly-disguised attempt to destroy unionism in one of the states where it began.

Here is David Cay Johnson, multiple Pulitzer Prize winning journalist, best-selling author,  distinguished university lecturer (and registered Republican):

"(Walker) says he wants state workers covered by collective bargaining agreements to "contribute more" to their pension and health insurance plans.

Accepting Gov. Walker' s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not.

Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers.

How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so, a serious crime would be taking place, the gift of public funds rather than payment for services.

Thus, state workers are not being asked to simply "contribute more" to Wisconsin' s retirement system (or as the argument goes, "pay their fair share" of retirement costs as do employees in Wisconsin' s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin."

There are foolproof and longstanding laws of economic cause and effect that make this arrangement beneficial to both sides.

Understanding them requires a bit more time, study and effort than simply repeating what politicians like Walker say, as too many journalists today are wont to do. But here, from the economist Dean Baker, is an easy-to-grasp explanation:

"At the center of the right's story is the view that governments are somehow being reckless or irresponsible when they provide guaranteed pensions for their workers. They tell us that these guaranteed benefits will bankrupt state and local governments, imposing impossible burdens on future taxpayers.

This story can be easily shown to be untrue. While the right has been scaring the public with talk of a trillion dollars in unfunded liability in state pensions, this sum can also be expressed as about 0.2 percent of state income over the time-frame in which the liabilities will have to be paid.

In other words, if states raise 20 cents in taxes or cut 20 cents in other spending for every hundred dollars of future income, they will be able to meet their current pension obligations. This is not a trivial sum, but it doesn't seem likely to bankrupt our youth either.

Furthermore, the vast majority of this shortfall was due to the plunge in the stock market that followed the collapse of the housing bubble. Overly generous pensions were not the problem. The problem here were the greedy Wall Street types who profited from the housing bubble and the incompetent economists who did not see it. Of course the market has recovered much of its losses, so future years' pension reports are likely to show that most of shortfall has already been eliminated.

But it is important to understand the basic logic of defined benefit pensions, since many are trying to eliminate them altogether. Defined benefit pensions are in effect a form of insurance. They guarantee workers a level of retirement income based on the years that they work.

This guarantee of future income is more valuable to workers than getting the same amount of money in salary since it would be very expensive for workers to buy the same insurance from the financial industry. From the standpoint of the government, the insurance is virtually costless.

State and local governments will survive into the indefinite future. If the stock market is down any given year or set of years there is little consequence for a government offering a pension fund. Of course, a down market would be devastating for an individual worker if it happens at the point where he/she retires.

This simple logic means that governments can give workers something that is of great value - a guaranteed retirement income -- at very little cost. (Research shows that even after adding in pensions, health care and other benefits, public sector workers are paid slightly less than their private-sector counterparts.  This means that because governments offer defined benefit pensions they can either attract better workers at the same pay, or the same quality workers at lower pay, than if they did not offer pensions. This is as basic as economics gets."

Facts, basic economics, logic, legal precedent, even the Constitution -- --  none of these seem to modify in anyway the bullying anti-intellecutal nonsense of the prevailing Tea Pot element of the Republican party.  And far too many members of the voting public believe their lies.

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