Walter Russell Mead on the Collapse of Rhode Island

Walter Russell Mead of The American Interest offers an outsider’s no-holds-barred view of Rhode Island’s current fiscal condition. A few of the more evocative passages are excerpted below…

[T]he state could never afford the beautiful utopia it was crafting, and so politicians and union leaders chose the path of systemic deceit. Taxpayers weren’t told what the bill for the system would be; public service workers weren’t told that the pension guarantees they’d been sold were worthless because taxpayers would not and could not foot the bill.
An economic crisis is nature’s revenge on those who make and those who accept false promises; it is a holocaust of lies when the dross is burned away and only what is real and true remains. Think of cotton candy melting and charring in the flame of a blowtorch; that is what is happening to the secure retirements that “caring” blue politicians and “committed” blue union leaders promised gullible state workers…
As far as I can tell the union leaders and politicians who concocted this disaster between them have no plans to suffer any cuts in their own pay or pension plans — and intend to go on “serving the public” without any accountability at all.
…and Professor Mead offers an implicit question at the end of this next section that Rhode Islanders may have a thought or two on…
Nationally, state and local government face something like $3 trillion in accumulated lies and deceit; tiny Rhode Island has the highest per capita amount of systemic dishonesty on its books — I don’t know if the Ocean State is unusually rich in both knaves and fools or if some other factor is at work.
For readers interested in what Prof. Mead means by references to “’caring’ blue politicians”, “‘committed’ blue union leaders”, and a “blue paradise built on lies”, his concept of the blue social model is explained here.

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Monique
Editor
10 years ago

“public service workers weren’t told that the pension guarantees they’d been sold were worthless because taxpayers would not and could not foot the bill.”
Ahhh. Someone who gets it.
Perhaps we could arrange for Professor Mead to address the AARP on this matter …

Dan
Dan
10 years ago

I found his description of the rise and fall of the “blue” American system more interesting than the Rhode Island article. Interesting to hear a Democrat who voted for Obama taking such a Hayekian view of the recent politico-economic history of the United States. Hard truths are not a strictly a partisan issue, it seems.

Warrington Faust
Warrington Faust
10 years ago

I am not unsympathetic with Prof. Mead’s take on the situation.
However, I think it can be partially explained by amateur legislators and other members of government. Just as with a number of home owners and purchasers, there was no allowance for the “business cycle”.
House prices would go up, without limit, forever, wouldn’t they? The economy was booming and would go up forever, wouldn’t it? So, predictions were made using rates of increase for the prior 5 years which were assumed to be constant. Tax revenues were expected to increase right along with everything else. Plus, inflation would make future payments “cheaper”. It was beautiful, wasn’t it?

David P
David P
10 years ago

Monique,
I don’t think addressing the AARP would have any real effect. Although Mead’s article talks about politicians deceiving government employees and taxpayers, it’s not as if we all weren’t willing participants in our deception. The elected officials didn’t want to confront people with hard choices because they knew that we would replace them with politicians who would tell us what we wanted to hear. The Tea Party is evidence that some people are waking up but most would rather remain in the Matrix.
Of course the difference between the movies and the real world is that our Matrix is unsustainable and no matter how much people hold onto the fantasy, the system will come crashing down one day. One day we’re going to come up against the real debt ceiling, as opposed to the one arbitrarily set by Congress.
BTW has anyone noticed that Neo had to take a red pill to learn the truth and a blue pill if he wanted to remain in his computer-generated fantasy world? I think that’s rather appropriate.

bob
bob
10 years ago

Read this great comment:
“Return with us now to those thrilling days of yesteryear: March, 2011. The Wisconsin budget controversy has generated sharp rhetorical clashes over ideology, budget priorities and tactics — and the largest sustained protests in Madison since the Vietnam War.
The main event: An argument over collective bargaining rights and compensation for state and local government employees that has spurred national interest.
Republicans, including Gov. Scott Walker, argue that sharply limiting union power is essential to reducing massive budget deficits at the state and local level. Democrats view the real intent as union-busting and say the GOP move unfairly punishes workers for recession-related woes.
Yesterday Wisconsin; today Rhode Island.
Tomorrow the United States of America.
In Michigan on Labor Day, a labor leader denounces the Tea Party, announces an army has been assembled to take the sons of bitches out. (The president of the US of A) sits idly by.)
Fast forward to November, 2012.
Said president is defeated in the election by a Tea Party-supported candidate who agrees with reductions in pensions and benefits for “working families.” He promises fiscal reality. No more Ponzi schemes. No more blue-state utopias.
Unionistas claim a stolen election and start filling the streets. Violence ensues from Detroit to Dover and from Berkeley to Bourbon Street.
We live in interesting times. This is not something I thought I’d ever see.
But from time to time, the tree of liberty must be refreshed with the blood of tyrants. (Rhetorically, of course.)”

Max Diesel
Max Diesel
10 years ago

“But from time to time, the tree of liberty must be refreshed with the blood of tyrants. (Rhetorically, of course.)”
Did you really need to quote Jefferson? By the way, the tyrants being Pat Crowley and Lou Rainone?

Warringtn Faust
Warringtn Faust
10 years ago

Warrington,
Andrew writes:
“If a lack of final decision making power in the hands of experts accounted for our fiscal problems, then there’d still be a company called Lehman Brothers in existence, as well as a Merrill Lynch that was more than a division of Bank of America.”
I did not mean to suggest that mania was restricted to the public sector. There is an analogy between Wall Street and the public sector. Wall Street was driven to ruin by a demand for unrealistic levels of profit, politics was driven by a demand for unrealistic levels of largesse.

mangeek
mangeek
10 years ago

Is there some way to absolutely FORCE the politicians to pay for what they’re promising? When I hear of cities and the state repeatedly under-contributing or skipping contributions to retirement plans it makes me sick. The same goes for the bozos who were allowed to set the expected returns above 8%, and those who allowed annual 3% raises to be codified instead of tying a retiree’s income to some sort of index.
Like many, I would have rather been paying all along to put all that money aside. It’s Bad Business to be able to promise something today that you don’t have to pay for until after your administration is over.

stuckhereinri
stuckhereinri
10 years ago

Mangeek writes, “It’s Bad Business to be able to promise something today that you don’t have to pay for until after your administration is over.”
Of course it’s bad business, but it’s good politics and that’s the problem.
The current group of idiots on the hill don’t have to figure out how to pay for any of their promises, just kick that can down the road.
Until checks start (literally) bouncing or we can no longer borrow any money, this will continue to happen.

Warrington Faust
Warrington Faust
10 years ago

Posted by stuckhereinri
“Until checks start (literally) bouncing or we can no longer borrow any money, this will continue to happen.”
So, is there some way we can force this result? (“feed a cold and starve a fever” comes to mind)
Of course we will hear “children will starve”, “we will have to reduce police and fire”. This is to be expected. It would then be necessary to produce a conter-list of cuts that would not endanger public safety, or empty the mouths of infants (those are federal programs, aren’t they?).

Tommy Cranston
Tommy Cranston
10 years ago

“I don’t know if the Ocean State is unusually rich in both knaves and fools ”
LOL. All of us know.

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