In the words of James Whitcomb Riley, a late 19th century Indiana poet, “If it looks like a duck, swims like a duck, and quacks like a duck, then it is probably a duck.”
Left unchecked, the Kentucky Republican Party’s ongoing assault on virtually the entire public sector will result eventually in the complete privatization or “corporatization” of our Commonwealth. “We the people” of Kentucky will be totally disenfranchised and will no longer be part of the decision-making process, or self-governance, which is what the Kentucky and U.S. Constitutions are all about. For decades, Republicans have been touting the idea of privatizing public services and running them like businesses – and now they are doing exactly that. The GOP likes to say that the word “democracy” is not in the Constitution. But neither are the words capitalism, corporation, or market, or any of the other ideas used to replace democracy. The founders could never foresee a future in which Americans were too ignorant to understand that democracy is what the constitution is all about.
Looks like a Duck
This past Thursday evening, Senate Bill 151 (SB 151) was introduced in committee by Rep. “Bam” Carney, an educator from Campbellsville, who struggled to put together a grammatically correct sentence. Carney took 10 minutes to cover a complex, 291-page bill that had arrived on legislators’ desks minutes earlier. My guess is, being a teacher, he was trotted out to carry water for the Governor for this revised version of SB 1, which failed to receive enough votes to pass. This was done in secret, much like you would find in an autocratic “banana republic.” Since it appeared minutes before the vote, there was no review, no hearing, no actuarial report, and was done in sledgehammer fashion like the one-party governance of the Old Soviet Union. This is what Kentucky governance controlled by outside, dark-monied groups like the Koch Brothers, American Legislative Exchange Council (ALEC), Americans for Prosperity, and the Pegasus Institute looks like.
Swims Like a Duck
This is part of the national agenda that has sailed through Kentucky’s General Assembly in the past couple of years – right-to-work-for-less laws, charter schools, vouchers, and a pension grab by the same financial sector that caused the Crash of 2008! Not only has these “bought and paid for” Faustian groups gone after educators, they have rammed through a utility-backed anti-solar bill. It is expected that they will also install a very regressive sales tax that will hurt everyday working Kentuckians while greatly lowering property taxes and income taxes for upper-income citizens. As believers in trickle-down economics, they have obviously failed Econ 101! They will also target Medicaid (where many Kentuckians get help for nursing home care and healthcare), environmental regulations (like those controlling the new 120,000 pound coal trucks that devastate roads in Eastern Kentucky), voting laws, and of course police and fireman job security and pensions. Let’s also not forget the city, county, and state workers who help us get things done that many take for granted!
Quacks Like a Duck
A little-known fact is that one of these groups, ALEC, spearheaded the “Stand Your Ground” laws adopted by many states. When George Zimmerman shot Trayvon Martin in Florida, the pushback on ALEC was significant. McDonalds, Coca-Cola, Mars, Wendy’s, Intuit, Kaplan, and Pepsico dropped their sponsorship of ALEC. The Bill and Melinda Gates Foundation halted its grant the next filing period. These actions should speak loudly that ALEC’s agenda is not good for America.
ALEC is registered as a tax-free 501(c)(3) organization, a status that has been challenged by Common Cause and other groups because of the enormous amounts of money spread across all 50 states. The national agenda is far reaching: they want to privatize Medicaid and Social Security; eliminate minimum wage, overtime, paid sick leave, and maternity leave; have freedom to pollute; and reduce regulations – all while reducing taxes for the rich!
In short, the grand design seems to be to create the lowest-wage labor force in the developed world and to make those greedy billionaires even richer.
In the words of John D. Rockefeller, “The way to make money is to buy when blood is running in the streets.”
It is a fact that Kentucky’s “Tea Party” Governor Bevin and the Republican majorities in the House and Senate “debuted dancing to the tunes played by the reactionary right- wing billionaire Koch brothers.” (Ron Formisano, C&J)
Must Be a Duck
In a Lexington Herald-Leader editorial on May 16th of this year, Rep. Jim Wayne from Louisville paraphrased a Gilded Age billionaire by saying, “We own Kentucky; we got it by buying the legislature, and we intend to keep it.”
The first order of business in “keeping it” is to weaken the educational systems like they’ve done in Kansas, Wisconsin, Michigan, West Virginia, Oklahoma, and Arizona, to name just a few. The idea is to starve universities, so scholarships will be few and far between, bringing in high interest-rate loans from the private sector; starve the K-12 districts through charter schools and voucher programs (which will make choice much more appealing); and finally to go after teacher unions who have historically been the watchdog for salaries, benefits, and working conditions. Interestingly, Wisconsin had one of the first public sector teacher unions. Governor Scott Walker of Wisconsin, who is a Koch Brother stooge, went after their union and won a narrow victory that is a model for all public sector anti-union groups. Kentuckians are next on these groups’ agenda.
And finally, perhaps the last “cash cow” that the private sector wants to own are pension funds.
The fear-mongers have led many to believe that defined-benefit plans have a “structural problem” (i.e., are flawed in design). While this statement is the SOLE foundation for their reasoning that the pension funds need to be changed, they offer no proof to back up this statement. In fact, defined-benefit plans are not flawed – at their core, they are nothing more than a simple, short equation: benefits required = the size of the portfolio times a required rate of return.
The benefits required are the future cash payouts to retirees; these amounts are fixed for each year in the future and can be estimated with a great deal of accuracy.
If the size of the portfolio decreases because, say, (1) the state skips its required annual payments into the fund for eight years, or (2) the stock market declines drastically like in 2008, the employer (i.e., the state) is required to put additional money into the portfolio. This did not happen, leading to a large underfunding.
If the rate earned on the portfolio is less than the required (or actuarial) rate of return, the employer (i.e., the state) is required to put additional money into the portfolio. This has not been a problem with the teachers’ retirement plan but it has been for other state employees’ pension plans. The state legislature did not put in its required share, leading to a further increase in underfunding.
So the problem is not a structural problem – it is a funding problem at the state level. If the state had followed national pension fund guidelines, we would not be in this mess that we’re in. Defined-benefit plans have worked well for decades across the nation as long as both employer and employee make their contributions according to the guidelines.
So when Senate Bill 1 (SB 1 – the original pension bill) was halted at the Senate’s committee level, the legislature pulled a fast one on Kentuckians. The House gutted the contents of a sewer bill named SB 151 and inserted almost all of the original SB 1 language in its place. With heavy-handed Republican leadership and without a single Democrat voting for it, the bill sprinted through both houses of the state legislature in a matter of hours. Rep. Bam Carney’s committee hearing was conducted at breakneck speed. Democratic lawmakers made objections, even declaring the vote to be in violation of a Kentucky statute that required an actuarial (financial) analysis. Yet, instead, members were asked to vote on a 291-page bill THEY HAD NOT READ. When the full House took up the bill, the deliberations were short and passed 49–46. A quick vote was taken, then on to the Senate where is passed 22–15. Slam, bam, thank you, Ma’am!!
This will inevitably be a Pyrrhic victory for the Republican Party in Kentucky. After being out of power for about a century, they have now been elected but have proven they cannot govern like our founding fathers envisioned.
To conclude, on this Easter weekend, all four canonical gospels of the New Testament in the Christian Bible have a narrative of Jesus expelling the merchants and the money changers from the Temple during Passover in Jerusalem, calling them a “den of thieves” because of their commercial practices and greed.
This should be a cautionary tale to all who would discount (1) the value of public service, (2) the professionals who provide us with education, training, safety, and administrative convenience, and most of all, (3) a tremendous pathway of the common good for all to transverse in this great Commonwealth, at least for now.
Tax cuts for the wealthy, anyone? “Meet the New Boss, Same as the Old Boss.” From the song, Won’t Get Fooled Again, by The Who