Socialism for billionaires, free-enterprise for the average Joe
My old friend the fat-cat retired Atlantic City lifeguard pension profiteer is in the news again in this season of “shared sacrifice” here in our fabled Queen of Resorts, this time in the pages of the New York Times, where he’s presented as a symbol, I perceive, of the outrageous greed and excess at the heart of our dilapidated republic.
Novice economists might suppose this greed and excess was concentrated within our citadels of high finance, or among the titans of industry—in this case the casino gambling industry—who so enriched themselves while leaving a string of empty eyesores atop our most important natural resource (the beach and boardwalk). This would be incorrect. Our problems here in Atlantic City—generations in the making—are not the result of a concentration of political power in the hands of financiers or gambling moguls, but rather to the unrestrained avarice of our municipal working class.
John Steinbeck, that great chronicler of the American everyman, once wrote that socialism never took root in our native soils because the American proletariat does not identify as an exploited working class. There are no “self-admitted proletarians” in America, he wrote, only “temporarily embarrassed capitalists.” But Steinbeck, I submit, was looking in the wrong direction. In upside down America, the socialists I know tend to work in the financial services industries—or in their Brooklyn-based adjuncts, the artisanal cupcake and neck-tattoo industries—whereas your diehard free-market profiteers work directly for the government.
Purists may object this isn’t exactly how Marx drew it up, but lately I’ve decided to embrace the paradox. The idea of the socialist billionaire who’s also a threat to the working man is one whose time has come.
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This all started one Sunday morning last fall when, while trawling the financial press for my day job, I stumbled upon the name of my old childhood neighbor, Joe Rush, in a story about his pension, and how it was bankrupting my old home town of Atlantic City.
When I was a kid and he was a famous lifeguard on the Atlantic City Beach Patrol, I lived across the hall from Joe in the Chelsea Village Apartments. Back then I had no idea how long Joe’d been working on the beach—about 35 years, it turned out—but I had the feeling he’d been hired by Nucky Johnson himself as the sun was setting on the Jazz Age.
He retired from the beach in 2000 when he was seventy. He’s now eighty-four and collects as pension of $30,000 per year, or about $577 for every one of the fifty-two years he ultimately spent working on the beach, and this pension is destroying Atlantic City and, if we’re not careful, Western Capitalism in general.
It pains me to type these things, because I liked Joe Rush, but indeed he represents much that is wrong with our economic system. Every year at Christmas he used to give me one of those collector’s edition toy Hess gas trucks with the real rubber wheels and the headlights that worked and the tank on the back that doubled as a piggy bank, a metaphor, I see now, for the financial folly he represents.
In Atlantic City, the newspaper is owned by the socialist billionaire Warren Buffett, who has called municipal pensions, a “gigantic financial tapeworm” that saps the life from our sanctified economy, but in fact news of the Joe Rush pension scandal was broken not by the local Press of Atlantic City but rather by Bloomberg, the financial services press.
Mike Bloomberg, recall, is the socialist billionaire and former New York City mayor who made his fortune selling financial data to his fellow Bolshevists on Wall Street, meaning he has ample resources to devote to his socialist agenda, which entails requiring Joe Rush to publicly defend his right to his own pension.
Moreover that pension, Bloomberg tells us, is “emblematic of the city’s broader struggle to downsize spending and contain a budget deficit that has soared as the local economy collapsed.” Which I think means your pension’s on the agenda as well.
As indeed it should be. Though, in fairness to Joe, seeing him described as a “lifeguard” in the press felt a little inadequate, a little like seeing Aristotle described as a “schoolteacher” (Joe’s other job, by the way). Joe was a captain on the A.C. Beach Patrol, and like other officers, his job entailed a good deal more than running around in slow motion in red swim trunks, like they do on Baywatch.
It entailed, I think, managing crews of part-time workers—teenagers mostly—who patrolled the beaches of Atlantic City each summer to ensure the non-drowning of tourists, mostly—many millions of tourists, many of whom had never seen an ocean’s wave in anger—who frolicked in the surf each summer, and any one of whose high-profile demise could dampen the joy of a summer season for many a neighborhood lemonade stand, or billion-dollar casino hotel resort.
Joe’s job, in other words, entailed providing a public service—at taxpayer expense—whose economic benefits flowed primarily to the private entrepreneurs and gambling tycoons who operated businesses beside the public beach. And like our armed service men and women—defending socialism around the world—or our police and fire personnel—protecting it at home—Joe’s selfish sacrifice in the service of the common good revealed him to be a secret capitalist, and therefore an obvious target for the socialist billionaires of high finance.
Atlantic City had been paying pensions to its public workers for some time now, Bloomberg tells us, though the practice acquired an anachronistic air since the fall of the Berlin Wall and the rise of unchecked socialism in the West. Indeed Bloomberg called the policy a “relic” of the “lavish and loud” Atlantic City past that allowed the town to, “bankroll a municipal workforce well above the national average.” Which is good context.
Then again, the average municipality didn’t have 28.5 million visitors in 2011, most of whom had to be policed, cleaned up after and prevented from drowning, mostly by municipal employees, so perhaps comparisons to the elusive average municipality were unwarranted in this instance.
Bloomberg noted the city was set to pay $1 million last year to some 100 retired fat cat lifeguards, representing a “significant chunk of cash” for the embattled municipality. Which is good statistics.
Elsewhere I read the city was set to pay $9.7 million in interest on its outstanding debt, meaning its total obligations to 100 retired lifeguards was about a tenth of what it would pay its bondholders in interest alone (it was set to pay another $77 million in principal). But it’s understandable that Bloomberg should omit such context. Among socialist billionaires, such debt-service payments are sacrosanct. When a socialist buys a bond, he does so knowing he enjoys the full faith and support of the citizens of New Jersey, who stand with him, prepared to share in the sacrifice should his investment go badly.
Moreover, Atlantic City’s debt was originated for a fee by socialists at our global investment banks, and it trades in markets kept liquid by municipal bond socialists and hedge fund socialists, who were paid record bonuses for their backbreaking work in the grim bowels of the global capital markets.
New Jersey’s socialist governor Chris Christie—then running for president on a Five Year Plan (“五年计划”)—knew the continued ability to originate, underwrite and trade that debt was essential to the health of our socialist economy, whose political power was increasingly concentrated on Wall Street.
In fairness to the lifeguards, our predatory senior citizen profiteers were not the only group who profited during the boom years. Many other individuals—including, alas, some members of the financial services proletariat—were also compensated handsomely, but the lifeguards present an easy target because their job basically, is to sit on the beach and get a suntan, which is what you do on vacation.
But those of us concerned with signs of creeping capitalism should examine the philosophical underpinnings of this argument, the idea that one’s compensation should be tied to the difficulty of performing one’s work. Among economists, this was a corollary of the socalled Labor Theory of Value, and it was a favorite of the notorious Capitalist provocateur Karl Marx. But it is a fallacy as our socialist billionaires know all too well. Value is not tied to labor—otherwise they would not be so notoriously ill-compensated for their back-breaking work—but is a function, tragically, of whatever the free market will bear.
Theory aside for a second, Atlantic City does face a crisis. The question is merely on which of its stakeholders will fall mostly heavily the burden of “shared sacrifice,” as emergency manager Kevin Lavin has called it. Will it fall on our fat-cat retired municipal workers? Or will our disenfranchised socialist billionaires—who do most of the living and working in this town—see their just compensation “clawed back” as it were for the benefit of the commonweal?
At present such clawbacks are not on the socialist agenda, but the Dear knows we have seen such policies work in the past, and right here in South Jersey.
Noted socialist billionaire and Republican frontrunner Donald Trump believes in clawbacks, as residents of South Jersey remember from the early 1990s, when they built for him, at considerable personal cost, his very famous Trump Taj Mahal casino hotel and then he clawed back, as it were, the money he owed to his various contractors, mostly by not paying them in the first place, then declaring bankruptcy a year after the casino opened.
Trump’s bondholders, socialists to a man, assumed a 50% ownership stake in the Taj project in exchange for a lower interest rate—lower than the usurious 14% junk-bond rate they’d been promised—and Le Donald got to keep his white elephants, resulting in a “happy ending” for all socialist parties. Meanwhile the construction contractors who hauled his garbage, poured his concrete and built his grand trash masterpiece in the first place experienced an ending that was not so happy. But such are the vagaries of the capitalist path they have chosen.
At present, Bloomberg tells us, the powerful lifeguard bloc of the robust American capitalist-rights movement will not “sit idly by” and watch their hard-won privileges removed, but Joe Rush et al have found few allies among our notoriously liberal media. In the wake of the breaking Joe Rush scandal, the Star-Ledger editorial board was notably cool to the lifeguard cause, stating that the family of a “grabby amphibian” shouldn’t be paid $50,000 simply because one of its members, “strapped on a speedo during the Truman-Ike years.” Then they told the head of the lifeguard union to “jump in the ocean.” Before quickly “getting real” and pointing out the 73 towns in New Jersey that have no police force at all, and the 75% of all fire departments staffed by volunteers.
Which at last is a vision for the future I can get behind: Atlantic City as one vast holding company of the financial services proletariat, free of all mutual responsibility. The total irrelevance of the non-financial economy. All overhead minimized. All security privatized. All labor outsourced. Swim at your own risk.
Coming to a Socialist Utopia near you.