Years ago, we wrote here that white collar workers would one day grow jealous of the mailman. It would appear that that day has finally arrived. Why the envy? For one, the mailman enjoys the kind of job security that most workers in the private sector sacrificed years ago. For two, the mailman’s healthcare package is comparable to what top executives receive. Third, he can retire fifteen years earlier than you with benefits that make yours look stingy. And four, there are all those paid holidays, sunshine and fresh air. 
Will envy of these perks turn to resentment if government employees continue to cruise through economic hard times with relatively few layoffs and pay cuts? It may be happening already. Consider the news from financially strapped California, where State Assembly leaders recently awarded pay raises totaling $551,000 to 136 staff members. This brazen affront to taxpayers follows Gov. Schwarzenegger’s request that the Legislature cut its budget by 10 percent to match savings from other departments. The raises come just a month before Californians will be voting on six budget-related measures in a special election. Is the Assembly trying to commit political suicide? Our old chum Glenn Klotz, a staunch libertarian and inveterate blogger, notes the bipartisan nature of these insensitive and unseemly policy decisions in a recent commentary, Public vs. Private. Here’s what he had to say about a trend that obviously cannot continue for long:
New Jersey Sinking Fast
“An editorial in the Atlantic City Press today pointed to a huge and growing gap in New Jersey between public and private sector employment. It noted that the state’s public employees on average make $11/hour more then their private-sector counterparts in overall compensation. Is this discrepancy sustainable in a supposedly capitalistic society? It appears that in New Jersey, the proverbial cart ( the public sector) has somehow gotten in front of the horse ( the private sector.) I recall reading that in the early 1900s, New Jersey’s entire state workforce was in the low hundreds. Today it is nearing 90,000! Granted, there were far fewer people in 1908, but nevertheless the ratio between public and private workers appears to be growing wildly out of whack. This might help to explain why New Jersey is almost hopelessly buried in debt and going bankrupt.
Public Contracts
“Add to this equation all the other thousands of jobs that depend on public contracts given to private companies. These companies in many cases simply wouldn’t exist without public funding and could be classified as quasi-public employment.
“Bottom line, New Jersey’s rapidly expanding public sector is being fueled by a quickly contracting private sector in the midst of a deepening Great Recession. Here’s another scary fact: Public employees are twice as likely to be represented by a labor union. I’m generally pro-union, but in the public sector, where the system is not tied to profitability and politicians manipulate the system to reward their patrons, where is there any incentive to manage the situation?”
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LOL
Maybe not until after COT commercials and 4 largest Bank traders cover shorts.
AP Giannini walked the 17 miles to San Francisco when the San Francisco 1906 Earthquake derailed the Peninsula Train. He turned North Beach Bank of Italy into Bank of America and the world by taking his gold and silver coins out of Crocker-Woolworth to avoid the San Francisco Earthquake Fires, hiding them in orange crates on a horse drawn wagon, and stashing them in the ash firebox of his San Mateo chimney. He made loans on the sidewalk in front of his bank with a plank, two barrels, a handshake and hidden gold and silver reserves. Every one of them was repaid…
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3251493
Meanwhile darn derivative FAZ burning a hole in accounts everywhere.
Seems ETFs behaving more like volatility driven option premiums….
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3251493