In today’s New York Times:

Federal regulators are investigating whether California violated securities laws and failed to provide adequate disclosure about its giant public pension fund, according to a person with knowledge of the investigation.

The Securities and Exchange Commission normally polices companies, but last year it brought its first enforcement action ever against a state, accusing New Jersey of securities fraud for misleading bond investors about the condition of its pension fund. The commission signaled, in its settlement with New Jersey, that it was going to look more broadly at the pension disclosures of states and cities.

The fund, the California Public Employees’ Retirement System, known as Calpers, lost about a quarter of its total investment portfolio during the financial crisis, leaving the state responsible for replacing billions of dollars each year and contributing to its huge deficit. The question is whether California adequately disclosed in the preceding years how risky the pension investments were and how much money it might need to cover any shortfall.

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Andrew Biggs and Jason Richwine in today’s Wall Street Journal:

Even using all the standard controls—including race and gender, full- or part-time work, firm size, marital status, region, residence in a city or suburb, and more—the federal wage premium does not disappear. It stubbornly hovers around 12%, meaning private employees must work 13½ months to earn what comparable federal workers make in 12.

Most academic studies dating back to the 1970s have found similar pay differences. In addition to the wage premium, federal workers enjoy more generous fringe benefits than do private workers. For instance, federal workers receive a defined benefit pension with benefit levels comparable to those from private 401(k) plans, except that federal workers contribute only 0.8% of pay and are not subject to any market risk. They also receive employer matches to the defined contribution Thrift Savings Plan that significantly exceed the typical private employer match.

If the overall generosity of federal benefits matches that of federal salaries (which seems quite likely), total compensation for federal workers may easily exceed $14,000 per year more than an otherwise similar private employee.

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From today’s San Francisco Chronicle:

Despite record high membership and dues, and years of unparalleled clout in state capitols, public-sector unions find themselves on the defensive, desperately trying to hold onto past gains in the face of a skeptical press and angry voters. So far has the zeitgeist shifted against them that on one recent weekend, government employees were the butt of a “Saturday Night Live” skit, and the next day, a New York Times Magazine cover article proclaimed “The Teachers’ Unions’ Last Stand.”

Public unions’ traditional strength – the ability to finance their members’ rising pay and benefits through tax increases – has become a liability. Although private-sector unions always have had to worry that consumers will resist rising prices for their goods, public sector unions have benefited from the fact that taxpayers can’t choose – they are, in effect, “captive consumers.”

At some point, however, voters turn resentful as they sense that:

– They are underwriting, through their taxes, a level of salary and benefits for government employment that is better than what they and their families have.

– Government services, from schools to the Department of Motor Vehicles, are not good enough – not for the citizen individually nor the public generally – to justify the high and escalating cost.

We are at that point.

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It is not the magnitude of the rapidly collapsing Greek economy that should concern us in America.  It is, rather, that Greece is unquestionably the proverbial canary in the coal mine that should have the American ruling class burning the midnight oil to extract us from the mess they and their predecessors have created for us.  Instead, our government is ignoring the warning.

The left in America, has flirted with the European economic welfare paradigm for years and now we have an Administration that has morphed that flirtation into a full blown love affair.  Greece, which has spent itself into oblivion providing unsustainable benefits (mostly to ever-growing public payrollers) is, we are told, an aberration and the Administration will, no doubt, say the same thing about Portugal and Italy and Ireland too.  But then we have Spain and Great Britain and even France (and let’s not forget Iceland) staggering down the same path toward economic never-never land, all suffering from the same delusional affliction that is now being pursued with gusto by our ruling class…the belief that we can best improve life for all Americans, nearly half of whom pay no taxes, by raising taxes on the declining number of Americans who do.

The left has always believed that prosperity is something that can be bought through government taxation of society’s income, rather than something that is simply a by-product of society’s productivity.  Let us say it again.  Government cannot create sustainable wealth or prosperity.  Only the people, individually and through the commercial and industrial institutions they create, can do that.

Healthy societies are growing societies that earn the means (the capital) for reinvestment in continued health and growth.  In this process of market-driven growth everyone who participates eventually prospers. Healthy societies are not those such as we are witnessing in Europe, whose earnings are sucked dry by government for redistribution to accomplish objectives as dictated by government planners.   Yet it is this withering European model that our current Administration and its congressional majority have embraced, notwithstanding the warnings screaming at us from across the Atlantic and throughout nearly every precinct in America.  President Obama has stated, unambiguously, that he personally believes that at some level of income no one needs to earn any more, presumably the point at which government should take the balance for redistribution. He acknowledged, however, that this view was, “not the American way.”

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Study this USA Today chart and cry:

According to USA Today:

“Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.”

And let’s just add insult to injury:

“These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.”

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