Think Freely Media presents Common Sense with Paul Jacob

Central Falls, Rhode Island, is not a large city. It is a town of under 20,000 people. And its government is broke, facing likely bankruptcy.

Municipal bankruptcies are not common. But they might become so. Why? The blame is easy to place: the proverbial gun-under-the-table contracting foisted on small localities by state governments.

That’s what happened in Central Falls, anyway.

Even the New York Times has an idea of the underlying problem:

The city, just north of Providence, is small and poor, but over the years it has promised police officers and firefighters retirement benefits like those offered in big, rich states like California and New York. These uniformed workers can retire after just 20 years of service, receive free health care in retirement, and qualify for full disability pensions when only partly disabled.

Walter Olson, of the Cato Institute, elaborates on this account: “‘Promised’ is a word of art here, because the city wasn’t really making all of these concessions on a voluntary basis. . . .” The concessions to unions were, instead, forced on the town by “public-sector arbitration” (which has almost nothing to do with private arbitration) that has led to a widespread “crisis in municipal finance,” which, the Times states, has brought one in four Rhode Island municipalities to the brink.

Olson makes the reasonable case that public-sector employee unions are a very bad idea to begin with. The end comes either with serious reform or bankruptcy.

This is Common Sense. I’m Paul Jacob.

By: Redactor

15 Comments

  1. Drik says:

    The end also comes with a serious decline in property values as few folks want to stay around to pay the jacked up taxes that ensue as the local folks try to keep the city government afloat. Property values crash because newbies that are coming in eventually relaize that there is going to be a serious hit on their purses with the higher rates so they are less inclined to buy.
    Voila. Wealth redistributed. This time it is from whatever equity that folks might still retain in their homes and business and into the union pockets.
    “Good for everybody” as long as you were not a property owner.

  2. Drik says:

    realize
    (no spell checker)

  3. leo petrini says:

    I would like to propose a legal theory for all who are engaged in the battle against corrupt public employee unions.

    I believe Justice Learned Hand first made the statement that the court “will not elevate form over substance”. And IRS, in dealing with questionable valuations in sales between related parties, insists that fair market value requires a willing buyer and a willing seller, neither under any compulsion to act.

    Therefore, I propose that all contracts, past and present, made between public employee unions and elected public officials are fraudulent self-dealing in the interests of those two parties and without any interest of the taxpayers represented. We must ignore form and look to substance and therefore these contracts are null and void and clearly against the common good.

    Keep fighting the good fight.

  4. Tough Love says:

    Public Sector Unions …ALL of them …. are a CANCER on Society.

  5. JohnnyK says:

    Why are so many people against workers making a decent living?

  6. Rex The Wonder Dog! says:

    LOL@ “KohnnyK” an obvious trough feeder, and “decent living”.

    Hey welfare queen, stop leeching off the poor and middle classs, if you want to reitre after just 20 years then YOU pay for it.

  7. Pat says:

    The end also comes when the people vote with their feet, as is happening in many states across the nation.
    Johnny K, I was out of work, with no health insurance but I got a humongous property tax increase just so municipal “workers” could get health insurance. I had no choice in the matter. You need PRIVATE workers earning a “decent” living if you expect to live off taxpayers. SOMEONE has to pay your salary if you are a public worker.

  8. JohnnyK says:

    Hey Rex,no trough feeder here. I worked 40 years before retiring. I don’t begrudge anyone of having a decent retirement. It’s not the actual workers that are making the big bucks, it’s the the managers

  9. Paul Jacob says:

    Managers deserve to be rewarded for their work just as workers do. But no one deserves special privileges. And when we see government put its finger on the scale, giving special advantages, we see things get way out of whack for politically favored folks.

  10. JohnnyK says:

    I agree that managers as well as the real workers need to be compensated for what they do, its the workers that are slammed for what they get.

    Pensions, among other things are the carrot on the end of the stick that lure people to jobs.

    When I got my job. I was assured that if I worked there for a long time and was good, I would receive a pension, along with other nice benefits.

    Shortly after I retired. my Company declared bankruptsy and defaulted on it’s pensions.

    Fortunately, my union saw that this could happen and negotiated part of our pensions into an annuity. This along with Social Security is what I have to live on now.

    Retirees see what is happening now as elder abuse. Leave the real workers alone and stop attacking them.

  11. JohnnyK says:

    I agree that managers as well as the real workers need to be compensated for what they do, its the workers that are slammed for what they get.

    Pensions, among other things are the carrot on the end of the stick that lure people to jobs.

    When I got my job. I was assured that if I worked there for a long time and was good, I would receive a pension, along with other nice benefits.

    Shortly after I retired. my Company declared bankruptsy and defaulted on it’s pensions.

    Fortunately, my union saw that this could happen and negotiated part of our pensions into an annuity. This along with Social Security is what I have to live on now.

    Retirees see what is happening now as elder abuse. Leave the real workers alone and stop attacking them.

  12. […] Bankrupted by Cushy Pension Contracts […]

  13. Frenchie says:

    How could any of this be bteter stated? It couldn’t.

  14. Ted Steele, American Legal Legend says:

    Poor rex the wonder poodle has been wriong on EVERY legal prediction he has ever made on any blog— he remains 0 for 9 ! ™

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