Archive for Wednesday, July 25, 2012

Brownback says solid Kansas finances allow for tax cuts

July 25, 2012


— Kansas' finances are solid enough to go forward with the massive state income tax cuts approved by legislators earlier this year, Gov. Sam Brownback said Wednesday, addressing election-season angst and worries over whether the reductions will create big budget problems in the near future.

Kansas Gov. Sam Brownback expressed optimism about the long-term strength of the state government's budget Wednesday, July 25, 2012 at the Statehouse, by announcing early payment of $24 million in bond debt.

Kansas Gov. Sam Brownback expressed optimism about the long-term strength of the state government's budget Wednesday, July 25, 2012 at the Statehouse, by announcing early payment of $24 million in bond debt.

Brownback's comments came as he announced that the state will pay off $25 million in bonds early, debt used to help finance an ongoing renovation of the Statehouse, improvements at the state fairgrounds in Hutchinson and other projects. His administration and legislative researchers also reported that the state ended its 2012 budget year with cash reserves of $466 million — more than double last year's figure and up from only $876 when Brownback took office in January 2011.

The Republican governor and fellow conservatives have repeatedly noted that since Brownback took office, the state closed a projected $500 million shortfall without increasing taxes, and then built a healthy surplus. But Brownback's critics, including moderate Republicans, worry that the tax cuts are likely to create a new budget crisis, starting next year.

Brownback and his allies believe the cuts will encourage businesses to add employees, attract new firms to Kansas and stimulate the economy. The governor held the news conference less than two weeks before the state's Aug. 7 primary in which conservatives are trying to unseat Senate Republicans who resisted many of Brownback's initiatives.

"We're in excellent fiscal position right now," Brownback told reporters. "We're in a fiscal position to do this tax cut. We're doing this tax cut to get off of the trend lines we were on of losing jobs."

The legislation will cut individual income tax rates for 2013 and eliminate income taxes for the owners of 191,000 businesses. Coupled with a sales tax reduction already scheduled for July 2013, the cuts would provide $231 million in tax relief for the fiscal year beginning July 1. That annual figure would grow to $934 million after six years.

Conservatives pushed the income tax cuts through the Legislature despite projections from the nonpartisan Legislative Research Department showing a budget shortfall will emerge by July 2014. The researchers' projections show cumulative shortfalls over five years exceeding $2.5 billion, and critics of the tax legislation fear such gaps would be closed by slashing funding for public schools and social services.

"Most of the people who I run into are not that optimistic. They're concerned," said Senate President Steve Morris, a moderate Hugoton Republican who faces a primary challenge from conservative state Rep. Larry Powell, of Garden City.

The legislative projections assume that state revenues, outside of the tax cuts, would grow 4 percent annually and that spending would grow almost 3 percent to cover costs associated with social services and public pensions and provide additional aid for public schools.

Brownback said his administration is committed to cutting administrative costs where it can and selling off unused state property.

He and other GOP conservatives also contend the revenue growth projections are too pessimistic; healthier numbers would shrink or eliminate projected shortfalls in future years. Revenues grew more than 8 percent during the last fiscal year.

The governor acknowledged that the tax cuts will "hit our revenue stream."

"But it will come back, and it will come back stronger and higher," Brownback said.

Morris replied he'd like to believe that the governor's predictions will come true but, "There's no guarantee of that."


Phoghorn 5 years, 7 months ago

Of course, some folks will complain that these taxes were passed to benefit the Yoch Brothers. In truth, we want as many of their operations to be in Kansas as possible. Ever since moving from Tennessee, the Yoch Brothers have benefitted Kansas greatly.

Phoghorn 5 years, 7 months ago

No, I mean the Yoch Brothers. Jethro and Bubba Yoch. They were born into poverty in the hills of Tennessee. Through hard work and innovation, they were able to incorporate an old moonshine still into their chemistry lab in a cavern. There, they perfected their formula for urinal cakes.

Kansas was able to get the Yoch Brothers to move here. Today, they hire thousands of people and give millions to charity. Unfortunately some people want to hate on them and run them out of town. I have never appreciated this philosophy.

JayhawkFan1985 5 years, 7 months ago

How many star government jobs have been cut since Brownback took office? Any private sector jobs would first have to offset those.

csun 5 years, 7 months ago

It's not just 'government' jobs, but losses in ALL public sector jobs (like teachers, firefighter and police) that need to be balanced against gains in private sector jobs, The public sector jobs are usually higher paying and add much more 'real value' to state, local or federal economies.

Claudean McKellips 5 years, 7 months ago

We need many good middle class jobs: teachers, firefighters, police, etc. Those are the jobs killed in Brownbackistan.

jhawkinsf 5 years, 7 months ago

Hopefully it's just a coincidence, but every middle class job you listed is a public sector job. Paying for them will have to come from somewhere. As will paying for the bureaucracy that supports those jobs. Expanding the middle class solely by expanding the public sector will doom both.

yourworstnightmare 5 years, 7 months ago

Good point. However, by undermining collective bargaining and unions in the private sector, we have ensured that many private sector jobs will not support a middle class.

I am no great fan of unions and their past behavior, but they are a necessary counterpoint to maintain decent salaries and benefits typical of what we consider the middle class.

It might be too late.

rtwngr 5 years, 7 months ago

Where have we undermined collective bargaining and unions in the private sector? Kansas was a right to work state before Brownback was elected. Nobody should be denied a job because they refuse to join a trade union. Unions undermine themselves in the long run.

chootspa 5 years, 7 months ago

Nobody's denied a job for refusing to join a trade union in union states. They do, however, have to pay fees to the union for the service of negotiating their employment contract. If everyone gets a pay raise, so do the non union members.

rtwngr 5 years, 7 months ago

When have we undermined collective bargaining? Kansas was a right to work state as far back as at least the year 2000. Workers in the private sector should not be forced to join a union in order to find work. There should be no unions or collective bargaining in public sector jobs at all.

chootspa 5 years, 7 months ago

You expand the public sector during bad times and contract it during good when the private sector can take on more of the burden. We try to do the opposite, and that dooms both.

jhawkinsf 5 years, 7 months ago

Contraction of the public sector does not happen during good times or bad. Public sector unions make sure of that. And that's why public sector unions are such a bad idea. Because their relationship to the "company" is substantially different than the adversarial relationship that exists between private sector unions and real companies.

chootspa 5 years, 7 months ago

Don't make things up. Public sector unions negotiate pay contracts and working conditions and in a lot of states they don't even have the power to strike. They're generally limited to particular sectors, such as firefighters or teachers, and administrators are not eligible to join, so your "adversarial" relationship is maintained. Or are you arguing that teachers should get pay cuts during good times or we should have fewer fire fighters? What a silly idea.

Government contraction occurs by spending less on food stamps and unemployment when fewer people are unemployed, spending less on infrastructure and new construction projects when the private sector is building, spending less on subsidies for new business initiatives when those efforts are paying off on their own, etc. Also paying down debt during good times instead of spending it on massive tax cuts to the wealthy. Oh wait, that was the fault of the public sector unions, wasn't it?

jhawkinsf 5 years, 7 months ago

Do you really believe that the adversarial relationship continues when the union contributes to the very politicians with whom they will be negotiating? Many claims are made about the corrupting influence of money in politics. Why would you assume that this one example is immune?

When you said that government contraction happened when food stamp payments were lessened, I might agree if along with that, there were fewer employees in the department that handles those payments. But that doesn't happen. If there were few workers in the unemployment office when there were fewer unemployment claims, I would agree. But that's not what happens. The size of government continues to rise on all levels. The Defense Dept. is bigger than ever despite the fact that the Cold War has ended. And the corrupting influence of monies given to those that determine the size of that dept. is certainly a big part of the reason. But the size of the social safety net is bigger than ever. The size of the depts. that handle just about everything is bigger now than it was 10, 20, 30 years ago. Heck, I would not at all be surprised if the dept. that inspects horse drawn carriages is larger now than it was 100 years ago despite the sharp reduction in the number of those carriages. (And I'm actually serious about that because I assume no one was inspecting horse drawn carriages 100 years ago, so if there is even one inspector, then it's bigger). Even closing a post office in Lecompton is damn near impossible. (Hasn't technology reduced the need for post offices? Yet contracting them is met with severe opposition, much of that from the mail carriers union and the politicians who received contributions from those unions).

I think the biggest problem with your argument is human nature. There is no real imperative to contract the size of government during good times. I mean, why? Times are good, why fire those decent people working in the unemployment office? That would just be mean. So we don't. Then when times are bad, we do expect them to suffer, just like the rest of us are suffering. Maybe it's counterintuitive to your suggestion that it's a better policy. Human nature frequently is counterintuitive.

chootspa 5 years, 7 months ago

Do you believe the adversarial relationship with private industry continues when the businesses getting hefty pork contracts contribute to the politicians with whom they will be negotiating? I'm all for getting all the money out of politics, but don't think for a second that getting rid of just public sector "free speech" will result in better or even particularly smaller government in terms of spending. It will just result in more of it being siphoned off to private sector contracts, such as for profit charters, private security services, subsidies for oil producers who totally don't need them, etc.

So - can you tell me the public sector union that represents the defense department? Since public sector unions are the big bugaboo growing the government, I'm sure they're totally to blame here, right? PS - I completely agree that defense spending needs to decrease. It's bloated and part of the problem.

State services are contracting, not expanding.

The post office is both told that they should "act more like a business" and given mandates that businesses don't face. They're mandated to stay open on Saturdays. They're mandated to fully fund pensions for 75 years, and then they're rebuked for not turning a profit when they comply. Gee, there wouldn't be any large private sector shipping companies that might like to see the post office go away and would donate money to politicians, would there be? Technology has lessened the need for sending personal letters, yes, but it's also expanded the need to ship goods over state lines. I lubs me some Amazon - don't you? Closing post offices is going to meet opposition with the people who staff them, sure, but it has also met with opposition in the communities. It turns out that people actually like mail service, especially in rural areas where ordering Amazon is easier than going out to the store. Who knew?

As I pointed out, we're doing the opposite of what we should be doing. We're "belt tightening" during bad times, which makes the economy worse, and we're expanding during good times when the expansion is unnecessary. And no, it's not all the fault of the public sector unions. If they ran things, teachers would still be getting raises, and politicians wouldn't be passing job-killing austerity measures right now.

jhawkinsf 5 years, 7 months ago

You bring up some interesting points. I'll try to respond. When it comes to fueling the expansion of the defense budget, yes, it's those companies that lobby the government that make that happen. But if you look at the unions that represent the workers at those companies, companies like Boeing or Lockheed and you will see that they behave very much like public sector unions. Do you think they would advocate for a reduction of defense contracts? Everyone behaves in their own best interests and sometimes management and union interests align. This would be one of those cases. A recent example would be the auto industry. Was the union opposed to the bailout? Of course not. They may disagree on the exact structure of the bailout, but GM and the UAW wanted that bailout. In that manner they very much resemble a governor who runs on a platform of expanding the social safety net and the union that represents the workers at SRS. Who represents the other side of that debate?

But let me make a more broad point. I think it's safe to say we all want smaller government. Some may want that contraction in defense, others in the social safety net, some may just say they want to achieve savings by wanting the government to be more efficient. What we disagree on is how to get from here to there. I have an idea. First, as I said, we all typically behave in our own self interest. I could spend someone else's money all day and all night, but when it comes to my money, my behavior would change. I could care less how a company behaves as long as it's their money. When they want a bailout, then I become interested in how they behave. I'm also not one of these people who wants taxes reduced. In fact, I want taxes raised. On everyone. You, me, everyone. Then, everyone will have a stake in how the money will be spent. And yes, I know the poor pay sales tax. But yes, I want them to pay more. I want everyone to pay more. If it takes 30%, fine. 40%, fine. 50%, fine. Pay for what we get. But there will come a time when it's too much.

Let me give another example, though this is an absurd hypothetical. In the last local election, 16% of the voters showed up. Suppose in the next cycle, there was a proposal to increase the local sales tax to 50%. Let me tell you, more than 16% will show up. Every grandmother will be lining up to get their IDs and voting.

If you want to end foreign adventurism, begin a draft that includes everyone. Every senator's daughter gets drafted. I can say for certain, that would end all our wars.

If you want the defense budget slashed, impose a heavy tax on the poor. They will line up at the polls and vote that out. If you want to slash the safety net, impose a tax on the wealthy. They will flood the airwaves with ads against that.

chootspa 5 years, 7 months ago

Who represents the other side of that debate with SRS? How about the Kochopolous and their tons of lobby money? I'd dare say they're outspending the - wait, what union represents the SRS?

I looked it up, and there's a professional organization for social workers with a branch here, but I don't think they have any collective bargaining rights. I met some SRS employees last year at a conference, and I gotta say they looked like they'd been hit by a train with all the Brownback changes and sudden layoffs. If I see them again, I'll ask if they have a union. I bet they don't.

The safety net is already being slashed, often at the request of rich lobbying groups like ALEC, AFP, and the like, and the rich are close to an all time low in overall percentage of their income that gets taxed. By your logic, they should have settled into blissful contentment with the current social safety net years ago.

I really doubt taxing the poor would result in slashing the defense budget. It's a non sequitur. It's mainly the poor and working class who send their children off into military careers. They're paying far more than money.

jhawkinsf 5 years, 7 months ago

Amazing that you admonish me not to make things up and in the very next sentence say that public sector unions don't have the right to strike. But they do strike, don't they. They do strike. They break the law by striking, but they do strike. You made your statement clearly intending the reader to believe that public sector unions don't strike because they don't have that right. They are prevented by law from striking. But they do strike, right?

Now please tell me how that fits with your admonition to not make things up.

chootspa 5 years, 7 months ago

Please name the last time a Kansas public employee union went on strike. I'll wait for you to go look it up.

jhawkinsf 5 years, 7 months ago

Your original post did not limit the discussion to "Kansas" public sector unions. Maybe before I look it up, you'll change it to Douglas County. Or East Lawrence. Or the 1200 block of Connecticut Street.

Perhaps you should use words more precisely prior to making an accusation that someone else is making things up. Now I'm certain it's past your bedtime. Good night.

chootspa 5 years, 7 months ago

Yes. It's totally moving the goalposts to bring the discussion back to Kansas in a thread about the governor of Kansas.

jhawkinsf 5 years, 7 months ago

So you decide when the conversation is expanded or contracted. Congratulations on your promotion to forum czar. Hopefully you'll be well represented when you negotiate your pension.

chootspa 5 years, 7 months ago

I'm ineligible for representation as part of the administrative staff, but thanks for the promotion. I'll work on my best adversarial relationship skills. I hear there's nothing as motivating as being ignored when it comes to pay and safety standards.

Even as part of a wider conversation, illegal strikes are still illegal, so claiming that I'm being deceptive when I say that they don't have the right to strike is just silly. They don't have the right.

csun 5 years, 7 months ago

If our education is so underfunded we can't supply a qualified workforce (a high priority for business attraction), I doubt we will be seeing any new businesses move here. Hence we lose great teacher's jobs and have a weaker business attraction and less private sector jobs

rtwngr 5 years, 7 months ago

Money does not equal education. There are too many places in this country where they spend far more on education per student than in Kansas and their education system is in shambles. Kansas City, MO would be the closest example. Chicago, Washington D.C., and I could continue but you get the point. It isn't about money all of the time.

chootspa 5 years, 7 months ago

Sure. It isn't just about money, but try telling the teachers that they're now working for free and see what that does to the education system.

Orwell 5 years, 7 months ago

Water doesn't equal corn either, but you can see what happens to the latter when there's not enough of the former.

csun 5 years, 7 months ago

It's been well documented that quality of local education, a skilled & well educated workforce and 'quality of life' are a much greater cause of business relocation or startup than state or local tax rates.

Liberty275 5 years, 7 months ago

Then how do you explain "Made in Taiwan" on everything you pick up except antiques?

I wish you were right, but anything that can be outsourced somewhat cheaper will be. All the libraries and busses in the world won't attract business if we are priced more than a little than the competition.

In the end, I'd rather see a man work than the government get more money. Granted, it's a crapshoot, but what else is there to do? Do you think we can Art ourselves ahead of Missouri competing for call center or manufacturing jobs?

Right now Lawrence has lots of people that can work part-time (students), we should target businesses that can use part-timers. Part time is bad, but there will also need to be some full-time jobs. Repeat a few times and maybe two KU students can go to a call center part time for a raise and free up one full time job at Pier One.

chootspa 5 years, 7 months ago

Making something overseas is not about the state and local tax rates. It's about the overall labor cost, and unless we're willing to work in horrific conditions for pitiful wages, I don't think it's an area where we really want to compete.

Richard Heckler 5 years, 7 months ago

Brownback is nonsense. Economically Kansas is ranked 49th in the nation one step above Mississippi.

Brownback tax cuts create tax increases throughout Kansas communities which of course leaving him able to say he didn't increase taxes. Neither does that mean local governments should get all itchy and excited at the prospect.

rtwngr 5 years, 7 months ago

You are so obtuse for an educated person. Did we drop to 49 after Brownback was elected? No! We were escorted there by the governors of the past 20 years. Liberals and moderates, all! Go sit in the corner and don't talk to anyone, merrill.

Mike1949 5 years, 7 months ago

To do what? More damage? Hasn't he done enough destruction of Kansas? People ask me where I was born now days, and I can only tell them la la land! I am ashamed what my home state has turned into. Any American should feel the same shame!

Orwell 5 years, 7 months ago

If California hadn't passed idiot laws – antidemocratic madness like saying a vote against taxes counts 2X a vote for taxes – they wouldn't have to release murderers from prison early.

Maddy Griffin 5 years, 7 months ago

Screw the cuts! Replace what has been taken from our public school system.

werekoala 5 years, 7 months ago

These are the same Kansas finances that make it imperative that we kick the disabled, those who require skilled nursing, and those with serious mental handicaps out on the streets, eh, Sam?

These are the same Kansas finances that made you turn away millions of dollars in federal funds to expand Medicaid, on the off chance that Kansas might be asked to kick in one dollar for every nine that we are given, two or three years from now?

These are the same Kansas finances that have made it necessary to cut education funding to the bone, to the point that school districts have had to go to court to secure adequate funding?

The same Kansas finances that are so bad, we have to consider breaking our pension contracts with people who have given 30 or more years of service to the people of this state?

I'm just asking, because it's possible that you're actually from some alternate universe where Kansas was blessed with an abundance of riches because they followed a Jesus who said, "screw the poor, I've got mine." and taught that a rich man could get into heaven as easy as a needle could poke a camel.

Of course, it's also possible that you're just a disingenuous shill who will argue any position, so long as it enriches his masters.

yourworstnightmare 5 years, 7 months ago

It was not Brownback's policies that led to this "solid" financial situation. Rather, it had to be the policies of Parkinson and Sebelius, as Brownback's olicies are only now going into effect.

Typical story line. Democrats repair the economy, and republicans see this as a justification to cut taxes which will again ruin the economy.

1) Republicans break, 2) democrats clean up and fix, 3) Goto step one.

imastinker 5 years, 7 months ago

If you believe that then you must also believe that GWB's problems were inherited from Clinton and Clinton's surplus was inherited from GWB !, right?

verity 5 years, 7 months ago

Question: How many of the tax cuts have actually taken effect yet?

I could have sworn that the main bill was passed just a few weeks ago, right before the legislature went home. Were there other big cuts I'm not aware of?

Wiry 5 years, 7 months ago

Sad thing is Brownback truly believes the lies on the Koch Brothers script they gave him tor read.

Patricia Davis 5 years, 7 months ago

Yup. He's lost at the intersection of Denial and Delusion.

jdavis66006 5 years, 7 months ago

Something tells me that he's doing this because he believes he is the greatest no matter loads of experts say he's 100% worng which means he's i his own little world or he want's to bring Kansas to the brink so he can act like he came to the recue and "save" Kansas so he can run for the whitehouse saying he is the one with the fiscal know how even though we'd know that he's the one who bankrupted the state leaving us to pick up the remains. Brownback is wrong, serves the rich only and he needs to leave office asap, also remember the we didn't have all this fighting in the capital building. Until brownback brought his Washington D.C. style politics here people in Topeka could actually work together instead of the attacks all over and the "not conservative enough" way of thinking.

Why can't people learn that we are all living here togeather and we need to work togeather. We tell kids to play nice with others so why can't we act like adults and walk the walk instead of just talking it.

Orwell 5 years, 7 months ago

He doesn't give a damn about Kansas. He knows Charlie and Dave will take care of him after he's wrecked the train for their gain.

KEITHMILES05 5 years, 7 months ago

That is insane thinking and Brownie is a trainwreck.

Bob_Keeshan 5 years, 7 months ago

The state didn't address its budget shortfall without raising taxes.

It raised the sales tax by 1 cent. Brownback and his cronies campaigned against it.

Today, naturally, he said he hopes he can sign a bill extending the sales tax increase.

csun 5 years, 7 months ago

Sales tax is the most regressive tax option. So lets pay for the Income tax cuts for the wealthy by have the lower encomy citizens pay more???? If we want to do something RATIONAL we should eliminate the sales tax on FOOD, which is a higher proportion of lower income Kansans

parrothead8 5 years, 7 months ago

"We're in excellent fiscal position right now," Brownback told reporters. "And if I just keep saying that out loud, everyone will believe me."

Jim Johnson 5 years, 7 months ago

Reading these posts explains how someone like Obama got into office and the scary thing is may get there again. Use to be when someone was successful they were looked up to and asked for advice, now they are ridiculed.

Just look at Africa and one can see where these kind of ideas will take the country. However one doesn't need to look that far, just look at Detroit and you can see where these Liberal ideas will take you. Take a trip up there and see what kind of shape they are in after running the automakers off. Go ahead take the trip it will wake you up.

The dumbing down is almost complete.

chootspa 5 years, 7 months ago

Wow. Africa, huh? No dog whistles there.

Phoghorn 5 years, 7 months ago

Well we are trying Quantitative Easing here in the USA. Now look and Zimbabwe where they printed so much money that it became worthless. Nothing racist, just the same bad economic policy, albeit to a different extreme.

chootspa 5 years, 7 months ago

Because that's the only thing they did differently in Zimbabwe. Gosh, that's not a stretch. Not at all. Meanwhile, Iceland used QE as part of their recovery strategy and is doing great.

Patricia Davis 5 years, 7 months ago

Brownback's never proven much loved trickle down, Voodoo economics is way dumber.

Orwell 5 years, 7 months ago

There's a helluva difference between lining your own pockets ad improving the general standard of living. Nobody much respects the robber barons any more, though they were obviously very successful at enriching themselves. As the quick-buck corporatists keep cutting wages to pad their bottom line and stock options, pretty soon there won't be anyone able to buy their stuff. "Trickle down" is a scam of the worst sort.

Jim Johnson 5 years, 7 months ago

We just went through the biggest boom in history thanks to Ronald Reagan's Trickle Down theory

verity 5 years, 7 months ago

Maybe people realize that their taxes pay for services which they like to have, such as quality education and infrastructure.

Jim Johnson 5 years, 7 months ago

Quality education? Where do you live? For the money we spend on education every child should be considered a genius

csun 5 years, 7 months ago

Cut taxes for the wealthiest the most ? Real tax policy would eliminate the sales tax on FOOD which helps low income Kansans the most. A FAIR step in the right direction. Obviously to rational for the Brown stain on Kansas

Phoghorn 5 years, 7 months ago

We agree about getting rid of taxes on food. That helps everybody. Texas has no taxes on food which I am sure helps out the poor and middle class down there.

Orwell 5 years, 7 months ago

Give it up. People are catching on to the reality that "flat tax" means making some other guy pay while "them that has, gets." I'd be ashamed of myself if I were that greedy.

Cant_have_it_both_ways 5 years, 7 months ago

You should have to show your last years income tax return to vote. You want to talk about fair, what is fair is when everybody pays income taxes.

Phillbert 5 years, 7 months ago

In addition to being property owners should voters also have to be white males, too?

jafs 5 years, 7 months ago

Not in a democracy, or democratic republic, in which each citizen is supposed to have an equal vote.

But, the idea that those with money matter more is clearly one that appeals to you, from many of your posts, and to many others, unfortunately.

verity 5 years, 7 months ago

Do you really think that or are you just trying to stir people up?

jafs 5 years, 7 months ago

Based on his previous posts, I think he really does believe it.

verity 5 years, 7 months ago

So we're aiming at no income tax here in Kansas so no one can vote?

Katara 5 years, 7 months ago

Why would you use Federal Income Tax for voting in state elections?

Chip McConnell 5 years, 7 months ago

Excellent fiscal condition? Really, what's the plan to fund the $9 billion dollar KPERS deficit?

Cant_have_it_both_ways 5 years, 7 months ago

Should be the same as the private sector.... SOL. You see, they have to take it from me to pay it, then I don't have it. Public sector employees rolled the dice and chose that life path. This stuff happens to the private sector all the time.

Phillbert 5 years, 7 months ago

Brownback and conservative Republicans essentially pushed the state's children, poor and disabled off the roof of a 10-story building. This press conference was his report on how they're doing as they pass the eighth floor. "They're doing great! Look at them fly!"

Liberty275 5 years, 7 months ago

I didn't realize Kansas had a 10 story building.

Shelley Bock 5 years, 7 months ago

In Wichita, "250 Douglas Place" has 26 stories as the once highest building in Kansas. Epic Center is now the tallest, but only 22 stories. Nine other structures in Wichita have 10 or more stories. Once again, conservatives without the facts.

jhawkinsf 5 years, 7 months ago

Philbert was using a bit of poetic license when he said people were being thrown off ten story buildings. LarryNative was using a bit of poetic license when he made his suggestion about liberals getting their welfare cheese. Even Liberty275 used poetic license with the suggestion that Kansas might not have a ten story building. None of those comments were meant to be factual. As your criticism was directed at the conservative comment and not the liberal, might I assume you are a liberal? May I also assume all liberals do not see what is so plain? No. But, you, Hepburn, need a very serious adjustment to that meter that points to poetic license rather than facts.

chootspa 5 years, 7 months ago

So I take it that most of your comments use "poetic license?" Gotcha.

jhawkinsf 5 years, 7 months ago

Clearly you and I disagree on a variety of topics. Yet I still enjoy having those conversations, as long as they remain civil. But if you're just looking for a "gotcha" moment, please do us both the favor of looking elsewhere.

Shelley Bock 5 years, 7 months ago

And you, jhawkinsf, failed to see my effort, albeit feeble, in poking some humor back at those commentators who often throw barbs at liberals with their facts. (Hadn't figured out to put a "smiley face" behind the last sentence.)

Personally, I was unaware that there is a 26 story building in Kansas. Had you?

Mike Ford 5 years, 7 months ago

will the crazies own who they voted for? probably not.....they don't own bush either......they just hope gun bills, abortion bills, and god bills, sway the simpletons again and again just like the the past three decades....

Getaroom 5 years, 7 months ago

It's the same ol' same ol' and nothing new from Brownbakistan. The lies and corruption continue and the entitlements do as well - for the very richest. It's all the same, it's just wrapped in a Kansas flag instead of the American flag.
The stats tell it all in terms of the wealthy creating ALL the jobs - it just isn't true. Sure they create a few jobs and so do small upstarts. Welcome to the land of missed opportunity, compliments of the greed of the few who, hold the greatest the wealth.

That darned Liberal Media, always shedding light on what's wrong with the system - how inconvenient!

csun 5 years, 7 months ago

Brownback's tax policy and 'cut public sector jobs' (Teachers, firemen, police) policy only makes Kansas LESS attractive to business. He knows nothing about economics or business and little more about history.

jayhawklawrence 5 years, 7 months ago

If you want to be a successful white collar crook, study Brownback.

Everybody sees it and they still vote for him.

Heck, they even praise him.

jafs 5 years, 7 months ago

The idea that because private sector employers are defaulting on their promises to employees that the public sector should just do the same is disturbing to me.

What ever happened to integrity and responsibility, a couple of classically conservative ideas?

jhawkinsf 5 years, 7 months ago

Private sector employers are obligated to pay their employees an agreed upon wage in return for an agreed upon job performed. What other promises do you think private sector employers have defaulted upon?

jhawkinsf 5 years, 7 months ago

Suppose times are good for a company and they decide to give an employee a raise. But at some future time, the business is not doing as well, can they lower the pay of the employee? Can they offer pensions during good times and withdraw the offer during bad? The same with sick leave and vacation leave? The same with health care for the employee? Health care for the employee's immediate family?

It seems to me that the only offer set in stone is the wage that has been agreed upon. All others are subject to negotiation between the employer and employee.

verity 5 years, 7 months ago

I'm talking about promised (contracted) pensions and, yes, those were set in stone.

jhawkinsf 5 years, 7 months ago

Oh, I absolutely agree. If it was agreed upon, then it can not be unilaterally abridged. That said, just because a company gave a previously hired employee something does not mean all future hires must get that same benefit. And if one industry gives something like healthcare does not mean that all industries need provide healthcare. Or vacation leave. Or sick leave.

chootspa 5 years, 7 months ago

Yeah, they only provide those benefits if they want quality employees. So, do we want quality employees in the public sector?

jhawkinsf 5 years, 7 months ago

We want quality employees and we want to live within our means. That will certainly require compromises. Or as your post below suggests, shall we follow models where companies promise things they may or may not be able to deliver upon, running a greater risk that they may default in the future? (See Stockton, Ca., Vallejo, Ca., and several smaller communities as well as several more on the brink).

chootspa 5 years, 7 months ago

Unlike California, we're capable of raising taxes to meet our obligations. It's repeated raiding of the coffers that has lead us to this mess, not the obligations in the first place. The same can be said for private pensions as well. They'd often create a crisis by inflating the pensions of CEOs and draining the funds.

chootspa 5 years, 7 months ago

"More than 20 other companies have defaulted on pension funds of more than $100 million in the past three years, and last week, executives of troubled Delta and Northwest airlines said they may be next. Miller has proposed a six-month moratorium on defaults, as Congress debates how to fix what many lawmakers call "broken" pension protection laws."

  • Washington Post.

jhawkinsf 5 years, 7 months ago

I recall during the debate about bailing out the auto industry hearing discussions about past negotiations between unions and management. Several analysts suggested that agreements made 20, 30 years ago were unsustainable and that both the unions then and management then knew or should have known that. But the agreements went through then because both union managers and management didn't care. They knew they would be long gone when the "S" hit the fan. The deal is this. When unions and companies enter into these types of agreements, they both know that there is a certain level of risk and they assume that risk. I recall the companies offering to give billions in cash to the unions if they would assume control of their own pensions and healthcare. The unions declined. They knew it was a mess. A mess they and management helped create.

jafs 5 years, 7 months ago

No, that's just wrong.

When contracts are negotiated, both parties should live up to their end of them.

Especially if employees have done so, for long periods of time, based on those contracts.

Our current laws allow companies to just default on their pension obligations, and dump those on the federal government. Those laws should be changed.

jhawkinsf 5 years, 7 months ago

I'm not sure I understand what you mean. I agree, if a company and a group of workers agree to something, both parties must abide by that agreement. But I think if both sides go into that agreement knowing that certain things might happen. Businesses sometimes fail. Everyone knows that or should know that. There are laws that govern that and the process that must be followed. But if employees don't want to assume that risk, they could always ask for the money up front and then provide for the future themselves.

But please note that in the example I gave, both sides conspired to set up a system that would fail in the distant future, both well aware that those doing the negotiating would be long gone from the scene when the inevitable failure happened. And both sides were bailed out.

jafs 5 years, 7 months ago

The whole point of pension plans, which are rapidly becoming extinct, is that they guarantee a defined benefit upon retiring.

People who choose to work somewhere based in part on that guarantee shouldn't have it yanked out from under them, especially when it's too late for them to go back and make a different decision - the employer has gotten the benefit of the employee's living up to their part of the bargain.

The laws are set up so that businesses can declare bankruptcy and default on their pension obligations, which seems wrong to me. If we can insist that student loans can't be eliminated through bankruptcy, we can do the same with pensions.

In KS, for example, the KPERS system is vastly underfunded, for a combination of reasons. That doesn't mean that those who've worked for employers in that system for many years, paying into it, should be left hanging when they retire.

The whole point of defined benefit plans, as opposed to defined contribution plans, is that they guarantee a certain amount/month - people count on that when making decisions, planning for retirement, etc.

jhawkinsf 5 years, 7 months ago

I agree with almost everything you say, Jafs. Not everything, but close. I absolutely agree that agreements should be kept under most circumstances, but not all. Let me give you an example. Suppose you do some wok for me, but I'm not certain of the quality of your work so I ask for a deferred payment plan. You do the work, I agree to pay you upon successfully completing the job. You complete the job and expect me to pay you. I don't, because I die. Well, you're screwed, assuming I have no assets or heirs. You did the work and I didn't pay. But who is the bad guy here? Me? Why? You? The deal is this, we both assumed certain risks. However small, you assumed the risk that I might die and you wouldn't get paid. You could have declined the deferred payment plan. Maybe I would have hired you anyway. Maybe not. But you did voluntarily assume some risk. The same is true with pension plans. Sometimes they fail. And sometimes it happens not because someone was the bad guy. Sometimes it happens despite the best of intentions. Sometimes the failure happens without good intensions. But in either case, we all know these things happen and we assume that risk. We could demand payment up front. We could work elsewhere. We could demand a voice in how and where that pension is invested. But the employer always assumes some risk.

jafs 5 years, 7 months ago

Interesting scenario.

Obviously, accepting that payment will be deferred until "successful" completion of the job entails risk, not just that you will die, but also that you may not be satisfied with the work and thus refuse to pay.

Pension plans are the opposite, to my mind - they promise certain benefits, and are thus the opposite of taking risks like 401K plans.

People, like me, who are risk averse, prefer them for exactly that reason.

I'd be interested in any data you have about how/why pension plans "fail" - my guess is that they do so generally because of poor management of them, combined with over-optimism about investment returns.

In the case of KPERS, we have a combination of lack of funding from the state for many years, overly optimistic investment assumptions, and possibly too generous benefits.

I assume that's just a slip at the end there - you mean "employees", I'm pretty sure.

By the way, at these companies that go bankrupt and default on their pension obligations, I can almost guarantee that those at the top, regardless of their management, will walk away with generous severance packages and plenty of money.

jhawkinsf 5 years, 7 months ago

If you are risk averse, Jafs, then you should never enter into an agreement that includes deferred anything. You should negotiate an employment agreement where you are compensated at a fair rate and then you should decide if you are going to invest in a pension plan. And if you do, you decide which one. But if you do enter into an employment contract that includes deferred payments, then you accept risk. Since slavery has been abolished, since indentured servitude has been abolished, you always have the final choice.

Let me give you another example, because it turns something a little upside down. Suppose you were a cop or firefighter in a place like Stockton, Ca. or Vallejo, Ca. Now, you, along with your co-workers have negotiated a deal that included pay as well as a pension. Well, the city you work in, the city you work for, goes broke. And they default on several agreements made to you. The question is this, do the people who negotiated your agreement on your behalf deserve some of the blame for asking for too much? Do you deserve some of the blame? After all, you or your union could have asked for a simple full payment, up front. You, or your union then could have provided for any pension in whatever way you chose. But the fact is, the city gave more than they could afford and the police and firefighters took it with a smile on their face. Both parties are guilty. One of promising too much, the other for asking for and accepting too much. Remember, Jafs, if something is too good to be true, then it's probably not true.

jafs 5 years, 7 months ago

No employer on earth will give an employee the full amount of a pension up front as salary, so the question is moot. If they would, I'd take that instead, of course.

Who says that the pension there is "too much" and a cause of the bankruptcy of the city?

And, again, if the employees have lived up to their end of the contract, providing the labor they promised to provide, they should receive the benefits they were promised - anything else is a breach of contract.

jhawkinsf 5 years, 7 months ago

I didn't mean to suggest an employer give you the entire amount up front. If they contribute "X" dollars per month, they give you an additional "X" dollars per month. You then decide how to spend it. You can invest in a pension, take a vacation, whatever.

Who said the pension was too much? Well, that would be the city leaders, often elected officials who inherited bad contracts from their predecessors. And I assume bankrupcy judges get to decide.

"breach of contract" As long as workers can avail themselves of things legal, so should employers. If a woman can avail herself of a legal option of maternity leave, if a man can take paternity leave as long as it's legal, so may an employer be protected by bankruptcy. If the laws need amending, fine, do that. I would ask you why something like maternity leave is permitted? I would say that it's good public policy, that it benefits society as a whole, while sometimes being a burden to individual employers. The same it true with bankruptcy. While a burden at times to individuals, in general, it's a public benefit.

jafs 5 years, 7 months ago

Then the employee assumes the risks of investment.

I didn't mean that they could pay the pensions, I meant how do you determine that the pensions are the cause of the financial difficulties. Often there's serious mismanagement in any number of ways that results in those problems.

Bankruptcy laws allow defaulting on pensions, whether or not they caused the difficulties, which seems wrong to me. And, I disagree that they benefit society as a whole, the way they're currently written.

Breach of contract is breach of contract - if an employee lives up to their end of it, the employer should as well. And/or, if the employer doesn't, employees should have legal remedies available. But they don't, because of how the bankruptcy laws are structured, protecting employers while shafting employees.

We've seen the laws change, making it harder for individuals, while easier for companies, over time, as well.

And, when the company can just punt on their pension obligations, leaving those to the government (which has some sort of pension insurance fund), what's the public benefit of that? The way that the government fund calculates benefits is different, and results in lower benefits.

So, the guy that works for 20-30 years, fulfilling his part of the contract, counting on specified pension benefits gets screwed, and winds up with less than he was promised, while the company walks away from the deal, and the government assumes the pension.

This was an actual occurrence that I saw on "60 minutes" a while back.

Where's the public benefit again? It hurts employees, and burdens government, while helping businesses/management, who are often the very reason the company is in trouble, because of poor management.

Katara 5 years, 7 months ago

Yes, because the stock market never tanks and wipes out people's retirement in their 401ks. And companies never force employees to accept their stock (when they know it will soon be worthless) as part of those contributions. Have you forgotten Enron? MCI Worldcom?

Let me guess. You've invested heavily in bootstraps and think you are financially secure.

jafs 5 years, 7 months ago

Pensions, as others mention.

Many on the right seem to argue that public sector employees shouldn't be able to count on their pensions because private sector employers often default on those.

Seems to me that's the wrong way around - anybody who's made long term employment decisions based on promised pensions should be able to count on them, regardless of whether they're in the public or private sector.

Jim Johnson 5 years, 7 months ago

Pensions are the way people save when they don't want the responsibility to save on their own. Kind of like folks that get money back on their taxes, they think they screwed someone out of it.

chootspa 5 years, 7 months ago

Yes. It's coming from the same crowd that thinks asking a rich person to contribute a higher percentage of their income towards taxes is "jealousy." The same crowd is suffering from collective amnesia about how well stocks performed only too recently. That wisely stored nest egg can end up being wiped out just at the time you need it most.

Those pensions are part of the contractual obligations of employment, whether private sector or public. Mismanagement at the top is not an excuse for reneging on a promise.

chootspa 5 years, 7 months ago

Remember when he told us that his new plan for arts funding would get matching grants? How did that work out?

Alexander Smith 5 years, 7 months ago

Ummm yea and how many school are closing and cutting back on staff. WoW..we got a solid budget alright.

just_another_bozo_on_this_bus 5 years, 7 months ago

Is Sam a really bad liar, or is he just that stupid? (more likely, his middle and working class supporters are the truly stupid ones.)

verity 5 years, 7 months ago

I have often wondered the same thing about Brownback.

I would really like to know what goes on in his brain---and then again, maybe not. My theory (not in the sense of a scientific theory) is that he has wandered so far into never never land that he no longer knows the difference between lies and the truth. Or maybe he's convinced himself that it's ok to lie for what he perceives as the greater good. Or maybe he's just sold out to the highest bidder.

Interesting as a thought question, scary in real life, whatever the truth is.

Orwell 5 years, 7 months ago

I've heard one of his law school classmates say he was an idiot back then, too.

chootspa 5 years, 7 months ago

My theory is that he's a sociopath. Really.

He's got no problem lying to manipulate people. He may or may not believe what he says, but it doen't matter. He'll say what he thinks he needs to say to get what he wants. He's incapable of empathy. He thinks he's better than everyone else and wants power and authoritarian control over others.

verity 5 years, 7 months ago

That would certainly explain a lot.

But usually sociopaths are charming, aren't they?

chootspa 5 years, 7 months ago

He's well groomed. He smiles a lot. He uses proper inflection and chooses very comforting sounding words. He fits a lot of definitions of "charming" that way, but we're biased against him by seeing into his character and actually analyzing the veracity of his statements.

verity 5 years, 7 months ago

You're right---it is very hard for me to think that anybody would find Brownback charming, but I thought the same about Ronald Reagon---always thought he was smirking and smarmy.

chootspa 5 years, 7 months ago

Don't spend it all in one place. You might be able to get a pack of gum AND a soda.

Liberty275 5 years, 7 months ago

I took Europe out of my 401k. I don't think I'd put any money there for a while. I went to a US large cap appreciation mutual fund for whatever that portion was. If you gotta go down, it might as well be with the biggest ship.

JackMcKee 5 years, 7 months ago

What do you expect Captain Ahab to say. "Maybe hunting this whale wasn't such a great idea. I'm heading back to port"?

Larry Sturm 5 years, 7 months ago

Don't count your chickens before the eggs are layed it has been a long hot dry summer.

tbaker 5 years, 7 months ago

I not entirely thrilled with Gov. Brownback for a lot of reasons, but I like the idea of being able to keep more of what I work for and earn. I happen to think I can make much more productive use of the money than the state could ever hope to do. I like the idea of smaller, limited constitutional government that doesn't cost as much. I think the State is paying for / involved in far too many things that once were and should be again left to up to individuals to resolve for themselves.

If the governor is wrong and the economy and jobs (and tax revenues) don't bounce back, then we can vote him out of office. If nothing else, the people who do go to work everyday to support the State government will have got to keep a little more of what is their's to begin with. I like my private property.

JackMcKee 5 years, 7 months ago

If you think you're going to be keeping this money I've got a nice bridge to sell you. A few billion dollars doesn't just materialize out of thin air. You'll end up paying for it one way or another.

JackMcKee 5 years, 7 months ago

It's a fact that Brownback just cut a few billion dollars from the sources of tax revenue for Kansas. The speculation is that these cuts will spur enough economic growth to offset the tax cut. Until we see that growth actually occur it is just pie in the sky. Sam himself called this plan a "gamble".

tbaker 5 years, 7 months ago

I’m not a republican and I do have children in the public schools.

The Kansas Constitution says the legislature shall provide for intellectual, educational, vocational and scientific improvement by establishing and maintaining public schools, educational institutions and related activities which may be organized and changed in such manner as may be provided by law.

I say we can do a better job of providing what the constitution calls for, get a much better result, and do it for less money. The idea that any decrease in education funding is categorically bad, and that “good” education is synonymous with maintaining or increasing education spending is just plain hogwash and isn’t backed up by a single piece of evidence. To the contrary, per-student education spending has steadily increased for the last 40 years and at the same time test scores and our academic ranking in the world has steadily decreased. We have, we should, and we can do better.

BTW, the singular expression of “liberty” is private property (not just real estate). The best example of that is the money you work for and earn; that piece of your life you give up in exchange for it. Private Property rights are more important than freedom of speech. Be cautious of employing ideological generalizations about people who like to keep more of what they earn. They are the same kind of people who like everything else in the bill of rights.

chootspa 5 years, 7 months ago

Our academic ranking in the world is actually at the top... if you only measure the results of the richest school districts, as in the school districts with the lowest percentage of students living in poverty.

Our richest students do better than the richest students of any other country in the world (other than China, and they only test their brightest children). Part of that is unequal funding in districts that are purely property tax based. Part of that is simply that poverty creates problems that interfere with education. Parents have less time to spend with children on homework. Children may move from school to school in the middle of the year. There's also a lot less motivation to do well in school when you know darn well that it won't actually take you out of poverty.

We absolutely can do better with less money, but only if we solve the problems of poverty that the schools really aren't in a position to fix. I'll also note that countries that are more successful in education pay their teachers more than we do.

jhawkinsf 5 years, 7 months ago

Jafs, I think what you are confusing is a low level of risk with zero risk. When I was growing up in KC, one of the largest employers was TWA. We all know the old truism that what's good for GM is good for the USA. Well TWA is long gone an GM just got bailed out because they were too big to fail. But companies fail all the time, as do banks, brokerage houses, mortgage companies, and we've even seen cities fail. We know some states are are in trouble and we've heard for decades now that Social Security might fail at some time. Participating in any of those, investing in them has some inherent risk.

The deal is this, every contract, whether spoken or written has some level of risk involved. If you think the contract you entered into was iron clad, with zero chance of failure then you made a bad assumption. I have a social contract with the U.S. government. If I obey the laws, I should be just fine. But is there a small risk that I might be wrongfully convicted? Yes, a very small risk. A smaller risk that in most countries. But that small risk still is there.

I might slip in the shower tonight or I might choke on my dinner. Every single human endeavor has some risk. If you don't want the risk of pensions, don't work where those are part of your employment contract, because every contract, everyone of them, has some risk. You assume the risk when you work there. But if you do work there, you're either assuming that risk or you're being naive. One of those two statements must be true.

Now if you want to change the laws to make bankruptcy harder, that's fine with me. But don't be surprised if the response to that would be that fewer businesses would offer things like pensions. Or they would offer less. Or they might offer you a variety of pension plans that suit your personal comfort level. Or they might just move your job offshore when pensions are not an expectation of an employment contract. But what they can't offer you is something that no one can offer, zero risk. Even the federal government can't guarantee Social Security will be there when today's graduates are ready to collect.

jafs 5 years, 7 months ago

Of course, there's no way to live with zero risk, that's obvious.

But, a defined benefit pension plan is less risky, by it's nature, than a defined contribution plan.

Breach of contract occurs, of course, but generally, those who are damaged by that have legal recourse - they can sue the breaching party, and recover their damages. With bankruptcy laws allowing companies to dump their pension obligations, that's not the case. They're protecting employers at the expense of employees, which seems wrong to me.

You're right, of course, as well that companies may change their activities if we change the laws, and in ways that I might not like. That's why I'm in favor of serious and strenuous regulation of businesses, so that they can't do that.

You haven't commented on the fact that the folks at the top have this rigged nicely in their favor, and walk away with plenty, even if they run the company into bankruptcy, and shaft the employees. Does that seem ok to you?

jhawkinsf 5 years, 7 months ago

First off, when a company enters into bankruptcy, a judge becomes involved. He, according to the laws, determines "fair", that concept that I've many times said is impossible to define. But he tries his best. I'm O.K. with that system, as I generally believe that judges try their best to determine the best course of action. If the system needs to be tweaked, fine. Or if a complete overhaul becomes necessary and our elected officials come up with what they think is a better plan, I'm all for that as well. Off the top of my head, though, I can't think of any major changes I'd make.

I do believe that some of those things I mentioned, like businesses going off shore as a response to major changes that might be imposed on them, I believe very strongly that that is likely to happen. And I believe another likely scenario is a dropping of all pensions, should major changes not allow for businesses in trouble to adjust the way they do business.

The last point you make is tricky for me. It's because I have a hard time determining what a person should make. Do I think Lady Gaga or Justin Bieber are worth a hundred times what the President of the United States makes? Of course not. But do I think I, or someone else should set a limit on what they make? No. Should I make any determination? Actually, the only determination I should make is on the President's salary. The others are none of my business. What someone can do is make public information more public, advertise it, cause public shame and embarrassment, in an effort to change a person's behavior. We did that when GM and bankers came before Congress asking for bailouts. Maybe we should do it more. But should we, the general public determine how much the CEO of GM makes? I don't think so.

jafs 5 years, 7 months ago

As I've said numerous times, the laws allow companies to simply default on their pension obligations.

That's protecting the employers, and allowing them to breach a contract without any recourse for the employees.

I don't know whether or not I can determine what somebody should make, but I can see obvious inequities in the current structure. Employees lived up to their end of the bargain, while employers don't have to, and the folks at the top (who are most likely responsible for the bankruptcy) walk away with plenty.

If CEO's are responsible for the success of a business enough to warrant huge salaries, then they're also responsible for failure, and should suffer accordingly. If they're not responsible for either, then they don't deserve the high salaries in the first place.

Employment contracts that provide for guaranteed severance packages, etc. even if fired for poor performance make no sense at all.

No comment on the actual example I mentioned? A guy worked 20-30 years for a company, living up to his end of the bargain, and then the company declared bankruptcy, defaulted on their pensions, and he wound up getting significantly less than planned on (I believe he got 2/3 of the promised amount), so he had to keep working for a while.

Let's contrast that to the CEO, who undoubtedly didn't work for the company as long, made vastly larger amounts of money, ran the company into bankruptcy, and walked away with plenty of money, almost certainly not having to work if he didn't want to.

In what possible universe can that be ok?

jhawkinsf 5 years, 7 months ago

You're making so many assumptions that it's hard to know where to begin.

In the year 1900, a man becomes the CEO of a company the makes horse drawn carriages. A couple of years later, the company is in bankruptcy. Did he drive it into bankruptcy or was it things beyond his control? Something like a horseless carriage? How much blame would you assign to the CEO for the bankruptcy? Of course, that's a cute hypothetical, but it illustrates that just because a company enters into bankruptcy, doesn't mean that is was because of the actions or lack of action of the CEO. Companies enter bankruptcy for a wide variety of reasons. And some of those reasons may include the fact that too much compensation was made to employers, whether we're speaking of pay, pensions, benefits, etc. If the whole package was unsustainable, then bankruptcy was inevitable. The example I gave earlier of GM and the UAW highlights this. Both knew it was unsustainable, yet the leaders of both knew that by the time the inevitable happened, both would be gone.

You say the employers have no recourse. Is that true? Is there something that prevents them from petitioning the bankruptcy judge?

You keep saying that the employees lived up to their end of the bargain. How would you define that? Let's face it, Jafs, the quality of the work that the typical American worker does today is far less than in the past. Businesses don't only move off shore to maximize profit. They do so because the quality of the work in relation to the cost is much better overseas. It pains me greatly to make that statement, but it's true. I see the typical American worker as a bloated dinosaur, slow to adjust to changing markets, slow to adapt. We do a few things very well. But there are many things other countries do much better than us. If I were running a large corporation with a fiduciary responsibility to maximize profits, I would certainly look overseas when considering hiring typical workers. That American worker you speak of, the one who fulfills his duties, is simply too expensive. I'm of the opinion that if an employee knows that something within their compensation package is causing pressure on the company, something, say, like rapidly rising healthcare costs, and that employee or group of employees continue to insist on receiving that benefit, if they accept that benefit, then they are as responsible for the decline of the company as the CEO who offers that benefit. Then they are as "good" an employee as the CEO is "good". Isn't it, or shouldn't it be part of the definition of being a good employee, or as you put it, living up to their end of the bargain, doing things that benefit the company in the long run?

jafs 5 years, 7 months ago

There are certainly some cases that wouldn't fit my mold, but I would be almost willing to bet that many, if not most, of them do.

Employees have no legal right to sue employers over breach of contract, given existing bankruptcy laws.

That's because the laws make it ok for employers to default on their pensions.

My sense of the obligation of the employees is that they put in the time, and work at whatever level is acceptable to the employer - if somebody's been working for 20-30 years for the same employer, they must have been doing that, don't you think?

You keep saying that the reasons for bankruptcies are that benefits are too generous - I think in the vast majority of cases, that's just not true. Pension plans are virtually non-existent in the private sector, health insurance benefits aren't required, or provided by many employers, and unions are way down.

It's not obvious to you that the playing field is rigged in favor of those at the top?

jhawkinsf 5 years, 7 months ago

"It's not obvious to you that the playing field is rigged in favor of those at the top" Well, we've been limiting the conversation to some very large examples of bankruptcies.

I'm one of a dying breed. I actually read the hard copy of the LJW. At 51, maybe you do as well. Every week, there is a list of bankruptcies in Douglas County. Each week, there are on average, about five or six listings (my guess). Most of the time, I don't recognize anyone. It appears to be ordinary people who have come to bankruptcy for who knows why. But we can guess, can't we? I suspect it's for some very ordinary reasons. Ordinary people coming to court, seeking bankruptcy protection for ordinary reasons. If that's 5-6 bankruptcies in one county per week, multiply that by every county in America and suddenly you have a lot of bankruptcies. What you and I have been doing in focusing on the anomalies, the very big ones that draw a lot of attention. Is it rigged for the guys at the top? Maybe amongst those. Creditors of those 5-6 bankruptcies per county would disagree.

My point about compensation packages is that one part of that package has put so much pressure on another, that the latter has suffered. As an example, health care costs have skyrocketed. That statement should surprise no one. But if a company provides health care as part of it's compensation package, then that puts pressure on their ability to fully fund pensions. So pensions suffer. The point is this, we all know this about this. It's no surprise to anyone. So if you're accepting health care as part of your package, then you should understand that your pension is under pressure. If you want to keep your pension and your health care, maybe you need to give back something else. But if you fight for every penny, if you want health care, pensions, pay increases, vacation leave, sick leave, holiday pay, etc., if you fight very hard to win all those battles, you may find that you've won the battle, but lost the war when your company seeks protection in bankruptcy court. And that's true even if your company is government. That's what happened in several California cities. And it may spread.

jafs 5 years, 7 months ago

The fact that companies can discharge their pension obligations in bankruptcy is just one example of how the game is rigged.

In the 50's, CEO salaries were about 30-50x/average salaries, companies routinely offered very good benefits, including pension plans, people could raise a family on one salary, worked the same place for 30 years, and felt loyalty to their employer.

Since then, average salaries have virtually stagnated, CEO's make about 300-500x/average salaries, pension plans are virtually non-existent, people struggle on two salaries, most people change jobs a lot, and there seems to be a lack of loyalty.

So, blaming employee benefits for company financial issues seems a bit off to me.

Also, it's become more difficult for individuals to declare bankruptcy, and student loans can't be discharged through that method.

A couple of examples from banking, that I've had personal experience with - some banks use a 365/360 method of calculating interest - that means that they take the nominal interest rate (the one quoted to customers)/day and multiply it by 365, then divide it by 360, to arrive at the actual rate, which is slightly higher, of course. So, they're charging a little bit more than advertised, which most people may not even notice. It's legal, according to the bank official I questioned about it, since I actually read the paperwork.

Another one - when you get a loan, at least certain kinds, there's a 3 day waiting period, during which you can change your mind. During that time, you don't have access to the funds. However, banks are allowed to charge you interest for that period. Again, a small amount, but you're paying interest before you have access to the money. Also legal, apparently.

To my mind, both of these are wrong - banks should clearly state the actual interest rate, and they shouldn't be able to charge interest if you don't have access to the money - you're paying them interest because they're providing you with money that you can use.

I'm sure there are many more such examples, given the vast influence of money and moneyed interests in politics.

Also, you do know that the concentration of wealth in this country has increased dramatically over the last 30 years or so at the top, along with larger numbers at the bottom, while the middle class is shrinking and struggling.

jhawkinsf 5 years, 7 months ago

Principles are fine, Jafs, but sometimes when things are put in perspective, put in their proper context, then things seems much different. You've mentioned student loans a couple of times. Who in their right mind would give an18 year old with no work history and no employment history tens of thousands of dollars in student loans if they could immediately default on that loan once their education is complete? Only the wealthy can afford education, so these loans are a way of allowing middle class and poor kids the ability to go to college. Allow them the ability to put those loans into bankruptcy and those loans will disappear. The principle of allowing those loans to be written off in bankruptcy sounds good, until you put them into proper context. Then things are seen in a different light.

The same is true for the good old days when everything was manufactured here. American workers working in American owned factories with their managers looking down at them from an office window, the owner not far away, making more, but not the huge differences of today. Those days don't exist anymore. Chinese workers, Indian workers, Pakistani workers are all willing to work for far less. And even when you factor in transportation costs, products will be cheaper. Americans have always had the option of buying American. They chose not to. We chose these big multinational corporations when we chose to shop at Costco rather than the more expensive mom and pop down the street. We chose! As I stated above, the American worker who wants a good, middle class income, benefits like sick leave, vacations, holidays, pensions, etc., they've priced themselves out of the competitive marketplace where you and I have voted with our feet. We shopped somewhere else. My car is foreign made. Heck, my bicycle is too. As is my helmet and every article of clothing that I wear. I voted. In that context, Jafs, as I said above, the American worker is a dinosaur.

You've given a couple of examples about banks. Let me respond using the example of airlines. Back in the day, before deregulation, airlines all charged the exact same amount for a trip from point A to point B. It was regulated. Heck, if your TWA flight was full, you could just wander over to American and they would honor your ticket. Since deregulation, we've seen many airlines hit hard. TWA is gone, as are many others. If taken alone, that might sound bad and an argument for reestablishing regulations. However, there is the presumption that the consumer has been getting lower prices because competition allows for that. Regulating didn't. The same is true with banks. You're free to go to competing banks and find the best deal you can get.

I'll continue, as this is getting longer than permitted.

jhawkinsf 5 years, 7 months ago

Where I agree with you, Jafs, is my belief that in order for democracy to survive, there is a need for a thriving middle class. That is under threat right now. The rich are getting richer and the difference between them and the poor is getting too great. The question is, how do we raise the level of the poor, while not encouraging the very wealthy to seek shelter elsewhere. I've mentioned a couple of times the old Beatles tune "Taxman". It describes England's experiment of raising taxes on the very wealthy to 95%. Even George, the spiritual Beatle and the author of "Taxman" saw the problem. How did they respond? George moved to L.A., Paul to Canada, Ringo to Arizona and John to N.Y. England collected 95% of nothing, which according to my math equals nothing. Of course, the Stones also moved. As did many, many others. As long as we live in a world where people can move their wealth to the Cayman Islands or Lichtenstein, we have to balance how high we can raise rates.

The war against poverty has been a failure. Another path must be sought. I've said a couple of times that if we wanted to end foreign wars of adventure, all we need do is restart the draft, with no deferments. Once our little daughters start coming home in body bags, we will end wars. If you want the poor to stay home on election day, don't tax them. They won't care. If you want them to vote, tax them. They'll be plenty motivated to vote. If we taxed everyone, and I mean everyone, and we taxed everyone so much because we really have to pay for all the stuff we want, no deficits. Pay as you go. If we really did that, then you would see a clamoring for lower spending. We would really see what stuff we want and what stuff we don't want because we will really be paying for it. We're not now really paying for it, because many don't pay and because so much is deferred into deficit spending, which isn't real. Someone else in the future will pay for that. Not me, not now.

Doesn't it sound like pensions. I don't have to pay for it now, so it's not real. I'll worry about it later, in the future. Maybe I won't even be around then, it will become someone else's problem. So these businesses, and cities that are defaulting are behaving in exactly the same way you and I are behaving, assuming you think our government represents us. I'd feel a lot stronger about them fully guaranteeing their pensions if I knew we were paying our own way and not leaving huge debts to future generations. What I don't like is asking (demanding) companies to behave in ways I'm not willing to behave in. I would like to see my taxes raised to such a point as I'm fully paying for everything we are spending, as long as every other citizen does the same. Everyone pays 20%, 30%, 40%. Whatever. Then we will see what we really want and what we can do without. We will be paying our own way. Then I can see myself demanding companies do the same.

jafs 5 years, 7 months ago

A bit long and meandering - I won't respond to everything you've said.

The only reason that people declare bankruptcy, if the laws are structured correctly, is as a last resort. If a lot of college students wind up in bankruptcy, then there's something wrong with our society/economy.

You're right, it's a thing of the past - but, it's a bit cyclical, as well. When companies paid employees well with good benefits, they could afford to buy American. As those wages stagnated, they couldn't afford it. So, which comes first?

Of course you can go to a variety of banks, but when the laws are structured to allow them to do things that are detrimental to consumers, but increase their bottom line, they tend to do just that.

I'm glad we agree that the disappearing middle class is a problem, at least.

Of course, it's not a great surprise that our ideas for how to solve that are pretty different :-)

There's certainly a tax rate which would be absurd, like 95% - and nobody's arguing for anything like that.

Either the poor vote themselves "goodies" all the time, as many argue, or they don't participate - it can't be both ways. If they're not voting, then they're not responsible for policies, except to a limited extent.

I tend to think they don't vote much, because they feel it doesn't matter, and nobody really represents them, which is largely true, as far as I can tell.

The problem of deferred and deficit spending is huge, and if we don't do something about it, we're in big trouble. But, when it's so politically toxic to mention raising taxes or cutting spending, politicians won't really address those issues.

I agree we should pay for our spending, eliminate deficits, and pay down the national debt. It's the only sensible way to go.

But, I disagree with your flat tax proposal, since it has a disproportionate effect on the poor.

Also, why should companies get a pass on their promises, just because the government is poorly run? Are you really suggesting that the lowest common denominator is the way to go?

Claudean McKellips 5 years, 7 months ago

Don't forget to vote, and vote for those with the guts to fight the Brownbackistan/Koch agenda. Tom Holland, Anthony Hensley, Paul Davis, etc.

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