Humpty-Dumpty

When I was seventeen, some friends and I got in trouble with the police for illegal possession of alcohol. Both friends pleaded guilty. I wanted to also because I was guilty. I wanted to pay the $35 fine and get it over with, but my father insisted I pay $150 for an attorney to get me off - and he told me fee would be coming out of my bank account on which his name appeared under my own.

“Why should I do that?” I asked him.

“Because with this on your record, you won’t be able to get a government job,” he said.

The clannish Boston-Irish-Catholic-Democrat culture I came from was extremely involved with government. It worked for you if you cooperated with it, if you knew the right people, and especially if you had an Irish name. You could get a job when you needed it that would pay fairly well and wouldn’t be too difficult. Little did I know then that I would work over thirty years at a government job as a public-school history teacher.My father is standing with his jacket open. To his left is JFK. Seated in front are Congressman (and later Speaker) John McCormack, Kenneth Lyons of NAGE, and Congresswoman Edith Nourse Rogers - all from Massachusetts.

My father grew up in the Irish enclave of Boston known as Charlestown. Counting his military service during World War II, he worked thirty-three years for the federal government, mostly as a civilian procurement officer for the US Air Force. After claiming a work-related disability, he retired a GS-13 in 1974 at age fifty-two with generous pension and medical benefits. Early in his career, he helped form NAGE - the National Association of Government Employees, which has since morphed into SEIU - the Service Employees International Union which has been supplying thugs for Democrats at Tea Party rallies of late. Government unions like SEIU, NEA (National Education Association), AFT (American Federation of Teachers), and AFS-CME (National Association of State, County and Municipal Employees) are the biggest public employee unions. Public employee unions now dominate the American labor movement.

These unions have been negotiating contracts with cities, states and the federal government containing extremely generous pensions and medical benefits that even in the best of the times would be unsustainable. Both sides must have known it would eventually become impossible to deliver on the terms of those contracts, but they were approved anyway. Employees contributed to the pension fund and the city or state contributed as well for what are called “defined benefit” plans. That means if the pension funds’ investments aren’t sufficient to pay certain specific benefits for each pensioner and spouse - taxpayers are on the hook for them. State and municipal officials who signed those contracts had to know there would come a day when the fund would be insufficient, but it would be far enough off that they’d be out of office and others would have to deal it.

Well, that day has arrived. Dozens of cities and states are on the brink of bankruptcy because of those contracts. Prichard, a small city in Alabama, has simply stopped sending checks to its retired employees because the pension fund dried up and the city doesn’t have the money. According to a New York Times article: “‘Prichard is the future,’ said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. ‘We’re all on the same conveyor belt. Prichard is just a little further down the road.’”

Mr. Aquirre mixed his metaphors, but he’s absolutely right. If a city or state goes bankrupt, union pension contracts would be nullified, just as they are when corporation does. Had General Motors been allowed to go under, its generous pension contracts with the UAW (United Auto Workers) would have also. Is that why Democrats in the Obama Administration bailed out GM? Unions are the Democrats’ biggest constituency after all. Even in bankruptcy though, taxpayers may still have been stuck with the bill because there exists another federal agency called the PBGC (Pension Benefit Guaranty Corporation) which underwrites pension programs for bankrupt companies the way Fannie Mae and Freddie Mac guarantee foreclosed mortgages.

Government encouraged shaky mortgagees through the Community Reinvestment Act and then couldn’t pick up the pieces when it all came crashing down. The economic mess we’re in now is the result. In spite of what the Obama Administration and its media minions claim, this recession/depression is far from over. In fact, it’s likely to get a lot worse when the pension bubble breaks as it inevitably will.

So maybe I better not retire from my government job after thirty-four years. My pension wouldn’t be all that generous, especially the medical benefits, which would be paltry. With part time employment elsewhere to supplement I could get by all right, but The Maine State Employees Retirement Fund I’ve been paying into all that time is underfunded by billions. What would I do when I’m sixty-five or seventy and the checks stop like they have in Prichard? My father’s generation enjoyed a comfy retirement, but us baby boomers aren’t likely to. Humpty Dumpty is about to fall off the wall. All Obama’s horses and all the Democrat men won’t be able to put their massive entitlement programs together again. They won’t be able to bail out all the cities and states - not with a debt that’s $14 trillion and climbing fast.

Will there be riots like there are in Greece? People in France rioted when President Sarkozy said he'd raise the retirement age from 60 to 62. What will happen here when the checks stop?

Looks like we baby boomers are going to have to keep working until a few years after we’re dead. One consolation is that I won't be arrested for illegal possession of alcohol by a minor in my old age. That's good because I expect I'll be needing a snort now and then after I get home.

Deficits in Dublin

There are lots of beggars on the streets of Dublin, but only a few are the obvious drunks I’m used to seeing in American cities. Most look in the 20-40 range and many are women. They put a cushion on the sidewalk and sit with their backs against the wall and a blanket over their knees holding out a paper cup. They sit silently or they ask passers-by for change, but they don’t have the ravaged faces, haunted eyes and slept-in clothes of street drunks. They’re dressed decently and look well-nourished. I didn’t give them anything, but some say “thank you anyway” as I walk away.I’d eat breakfast in buffet-style restaurants, sit down next to someone and mention how cold and windy it was. Without my prompting, the conversation would turn to Ireland’s economy. Once people realized I was American, they’d ask about the Tea Party and whether I belonged to it. I explained that there were no forms to fill out, and that people belonged if they worked to shrink government. When visiting Ireland in the spring of 2009, they all asked me if Obama was going to straighten things out, but neither Americans nor Irish put hope in him anymore.On light poles in front of Trinity College were posters calling for violent revolution, and put up by the Socialist Workers Party. If the SWP were anything like I remembered it in Massachusetts during the 1970s, they weren’t much of a threat to civil order. A look at their web site indicated they hadn’t changed much.

A British newspaper, The Observer, said last week about Irish economist Morgan Kelly of University College Dublin: “Kelly . . . was laughed at, scorned and even threatened when he correctly predicted, as long ago as 2007, that Ireland's property bubble was heading for a spectacular explosion. Now he is forecasting mass mortgage defaults and an ugly popular uprising. The first stirrings are already visible, he says, with ‘anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics . . .’”

“People are angry,” said a middle-aged custom-guitar maker I met in an O’Connell Street pub, “very angry - and they can’t express that directly at the ballot box the way Americans did last week. They vote directly on government only every seven years, and the last election was two years ago.”

“There could be a vote of ‘no confidence’ though, right?” I suggested. “That would bring elections sooner, wouldn’t it?”

“Yes, but it would require a vote by the MPs, not ordinary people.” He seemed to be suggesting that another kind of protests might occur in the interim, but he had to go meet someone at that point, and I couldn’t ask him.Irish government employees are accepting pay cuts. People on the dole are accepting cuts in benefits and in medical services. At another pub in the government district called “Doheny & Nesbitt’s” I spoke at length to a just-retired, big-government liberal. He was critical of bankers for over-extending as they rode the real estate bubble, but he could not conceive of government leaving them alone to fail. When I suggested his government could have refused a bailout he was incredulous, looking at me like I had two heads. “Well, then the banks would just collapse,” he said.

“Uh-huh. But then taxpayers wouldn’t be on the hook for banker foolishness. Investors and depositors would - but they’re the ones who chose to put their money into those particular banks, right? So, oh well.”

He paused and looked as if he were just considering that option for the first time. “Yes, that might have been possible,” he said, “but government did step in - as it had to - and here we are.”

I snapped a photo of patrons on the sidewalk as I was leaving. One government type turned his head around and said, “Come over here, will you?” He seemed much like politicians in America: dark suit, sharply-creased pants, long black or navy blue long woolen coat, hair spray, and an arrogant manner. “I own that image,” he said.“Is that so?” I answered. “But it’s in my camera. How do you propose we resolve this?” I stared at him defiantly. The men around him went silent for a second or two, until one of them said: “He’s American. He’s not a journalist,” and he held his hand out to me. I shook it. “We’re pretty tense lately,” he said. “It’s that bitch in Germany.”

“Angela Merkel?” I said.

“Yeah, her, if she is a woman a’tall. We thought you were a journalist.” I thought it prudent not to mention that I was a columnist in America.

“No worries,” I said, and he patted my shoulder. His arrogant friend walked back inside without speaking. We chatted like old buddies for a while until I went on my way.

In the hotel bar where I was staying, I had a brief conversation with the hotel-owner’s son and I made the same suggestion: that the Irish government should have just let the banks fail and refuse to bail them out. “But then a lot of ordinary people would lose their money,” he said.

“Uh-huh,” I said, and he looked at me like I was Ebenezer Scrooge. “What’s the unemployment rate in Ireland?” I asked him.

“Somewhere around 13% I think,” he said.

“Wow,” I said. “That’s higher than the official rate in America. If people are laid off, does government provide them with assistance?” I asked.

“Oh yes,” he said. “Of course.”

“Well,” I said, “In our country someone ‘collects unemployment checks’ as we put it, but those checks run out after 99 weeks.”

He looked appalled. “But what will people do then?” he asked.

“Scrounge around for work,” I said. “Rely on family - on the kindness of strangers - whatever they can,” I said.

“But how will they make their mortgage payments?” he asked.

“Any way they can, or face foreclosure.”The EU is about to step in and impose reforms as they did in Greece. Will the Irish riot as the Greeks did? They have a long history of armed rebellion - much of it quite recent. That was against Great Britain which they perceived as a foreign invader, though it had ruled Ireland for centuries. Will they revolt against their own, democratically-elected government? I doubt it, but we’ll see.

The custom-guitar maker said, “With this crisis, we Irish are only proving we’re incapable of governing ourselves. There are tough times ahead.”