The Honey Pot People

[Guest guest]

The Honey Pot People and the American Dream

January 30, 2005

 

Who are the honey pot people? These are people who get

all kinds of perks in exchange for support of the

ruler. Things work for the honey pot people in a

special kind of way because they have the connections

to go to the head of the line.

 

As a country becomes less and less successful, it

reaches a point where the only ones with jobs or

benefits are the honey pot people, those loyal to the

ruler.

 

This is the classic definition of a Third World

Country. Those who support the ruler get to have

special perks and go to the head of the line Everyone

else is simmering with resentment and stymied. Nobody

wants to live in such a place, which is why most Third

World Countries cannot keep their educated people.

 

I believe that many of the people who support Bush are

part of the honey pot, those who circle around the

ruler and enjoy perks by that support. You never hear

what is so wonderful about Bush. But there is undying

support, they just don’t want to talk about it too

much. Very interesting.

 

Take the example of “conservative” San Diego, where

the police and fire department were given retirements

at age 55 of $50,000 a year plus a bonus of $300,000

cash. This is a great way to earn the political

support of these families. The only problem is, the

entire system was fraught with this kind of fraud, and

now is bankrupt. (See below article)

 

When those who support this government find out the

entire country has been looted, I wonder if they will

realize that they were part of the problem and not

part of the solution.

 

The simple truth is, to do a job right, to be fair, to

be financial prudent, all of these things take a lot

of attention, a lot of caring, and a commitment to

being fair.

 

Unfortunately, I see a stony glaze over the eyes of

most Americans when they are told something is wrong.

While I don’t condemn wealth, it is remarkable how

well dressed each of these supporters is. One must

wonder in such an economic downturn why they are doing

so well. My guess is that many of them are on fixed

governmental incomes of one sort or another. In other

words, its working for them, at least for now.

 

The problem is, driving away foreigners, discouraging

travel, keeping a country in a constant state of

terror for years is not going to allow things to

return to normal. I can’t imagine anyone getting too

excited about starting a business in this uncertain

climate.

 

Even real estate is uncertain. With the dollar

devalued by 40% and jobs gushing out to Mexico and

China (that sucking sound that Ross Perot warned us

about), with an influx of low paying Mexican workers,

who really believes that real estate will continue to

even hold its value, much less increase.

 

In short, real businessmen in the real non-government

subsidized world, will be very cautious about

investing.

 

By the way, many apparently prosperous businesses,

such as your church, which is able to hire a full time

secretary, or certain schools, which sport new

buildings and large staffs, are getting government

subsidies the government.

 

When I look around these days, I see nothing much

going on but government businesses and large

corporations. It’s a very different world since

George Bush came into power, but many have no idea.

Many are still getting inflated salaries paid for with

borrowed money.

 

How much longer can we fund this largess with loans

from Asian countries such as China and Japan? We have

borrowed roughly 300 billion just to pay for the

latest Iraq War.

 

If this were a family finance, it would be clear we

were in trouble, but many are still gambling that

they, the honey pot people, will continue to live the

good life.

 

When the bubble pops, and the truth comes out that the

entire country is bankrupt. it's unlikely the honey

pot people will ever admit that we were wasteful,

greedy, and irresponsible. They will go to their

graves blaming someone else for the destruction of a

dream. Perhaps they can blame the Arabs.

 

http://www.usatoday.com/news/nation/2004-10-24-sandiego-_x.htm

 

San Diego Now ‘Enron by the Sea’

Mon Oct 25, 7:12 AM ET

 

By John Ritter, USA TODAY

 

This laid-back city seems to have it all - stunning

beaches, best weather this side of Honolulu, a

national image as a vacation playground and top

convention destination.

A new ballpark and condo towers in the trendy Gaslamp

Quarter, a Skid-Row section turned upscale shopping

and dining, gives " America's Finest City " a lively,

urban feel.

 

San Diego is also known as a tightwad. City Hall's Web

site proclaims it " the most efficiently run big city

in California. " Howard Jarvis, architect of

Proposition 13, California's landmark 1978 ballot

measure capping property taxes, once said that if all

cities were as financially prudent as San Diego,

there'd be no need for a tax revolt.

 

That was then. This is now: a financial mess dragging

the nation's seventh-largest city toward insolvency,

federal investigators looking for evidence of

corruption, a $1.7 billion gap in city workers'

pension fund and retiree medical benefits brought on

by years of mismanagement and alleged sweetheart

deals.

 

The city manager and city auditor quit in disgrace.

Allegations of conflicts of interest dog pension-fund

trustees. The City Council and Mayor Dick Murphy,

who's up for re-election Nov. 2, are accused of

short-changing the pension plan to stem red ink and

keep pet programs afloat, then shying from tough steps

needed to close the gap.

 

" America's Finest City " has become " Enron by the Sea. "

Wall Street bond underwriters claim city officials

duped them and balk at new loans until the scandal is

cleared up. The city's credit rating tanked, costing

it millions more in interest on its debt.

 

" If they had borrowed the money from loan sharks

instead of Wall Street, there would already be bodies

floating off Point Loma, " says Michael Conger, a

lawyer who won a class-action lawsuit against the city

and the retirement fund. " Because there's no doubt

what they did, and they did it on purpose. " The city

settled the lawsuit in July by agreeing to fully fund

the pension system starting this year.

 

Murphy admits mistakes were made but thinks the city's

woes are solvable, not the crisis that critics paint.

 

San Diego's situation is extreme, but many cities feel

the burden of soaring pension costs. In a September

survey by the National League of Cities, 79% of cities

said pensions were eroding fiscal health. The economic

downturn and stock market nosedive that cut income

from pension-fund investments forced cities to cover

gaps from general revenue. Many resorted to heavy

borrowing.

 

" Just like Enron, we found out the emperor had no

clothes, " says Carl DeMaio, president of the

Performance Institute, a government accountability

think tank. " It's a wake-up call to city and county

leaders across the nation. "

 

San Diego's problems began in the early 1980s as

double-digit inflation slashed retirees' buying power.

Inflation also swelled pension-fund investments, so

the city decided to give retirees annual bonus checks

instead of setting the income aside for lean times.

 

When annual contributions to the pension fund began to

squeeze the budget, the city in 1996 and again in 2002

went to the pension board seeking to make smaller

payments. In return, the city granted even more

generous retirement benefits. Both deals apparently

violated state law barring cities from funding

pensions below rates that outside financial experts

recommend. Neither deal was disclosed to Wall Street.

 

When the stock market plunged, investment income

plunged, too. The city's liability grew as a pension

plan that for years had been 100% funded shrank to

less than 70% funded. Wall Street gets nervous when

the level slips below 90%.

 

This coastal city of 1.3 million has closed swimming

pools, cut library hours and raised fees to control

spending. Potholes go unfilled and police and

firefighters complain that aging equipment isn't

replaced. Critics warn of bigger cuts in services and

layoffs.

 

Meanwhile, the average police officer, firefighter or

clerk retiring after 30 years takes home a one-time

$300,000 check from a much-criticized deferred

retirement program established in 1997, plus a $50,000

annual pension for life, inflation adjusted. A few top

officials have left with $1 million

deferred-retirement checks and $144,000 a year for

life.

 

San Diego's benefits are " certainly on the high end of

the spectrum, " says April Boling, head of a

pension-reform committee created by City Council.

 

The depth of the city's financial hole is unclear.

Murphy says the current budget is balanced, but the

city hasn't released financial audits the last two

years and a new auditing firm's report won't be out

until after the election.

 

" The mayor doesn't know if the budget's balanced, "

says Ron Roberts, a San Diego County supervisor trying

to unseat Murphy. " To balance the budget, they didn't

make full payments to the pension plan. They just

pushed a lot of debt off. "

 

Nearly a decade of fiscal shenanigans came to light

when Diann Shipione, a pension board trustee, blew the

whistle. But it took some doing. She wrote letters to

the mayor, city officials and fellow trustees. She

spoke up at City Council meetings. She wrote opinion

columns in the San Diego Union-Tribune.

 

But the City Council and the trustees ignored her. At

one point the pension board bought an ad in the

Union-Tribune that scoffed, " Chicken Little Would Be

Proud. "

 

Only in September 2003, when Shipione alerted a lawyer

handling a municipal sewer bond sale to facts the city

hadn't disclosed, did Wall Street pull the plug. The

bond issue was canceled. Soon the Securities and

Exchange Commission (news - web sites), the FBI (news

- web sites) and the U.S. attorney were asking

questions. In January, the city admitted errors and

omissions in its financial statements.

 

" The city's conservative image is completely false, "

Shipione says. " It's reckless, it spends wildly and

lavishly, it saves nothing and it hides the truth. "

 

Last month, the reform committee urged raising the

retirement age to 62 from 55, dropping the

deferred-retirement program and borrowing $600

million. City Council watered down a key

recommendation to prevent conflicts of interest by

purging the pension board of city employees who have a

financial interest in its decisions. Critics want

stronger medicine, including a rollback of lucrative

pension benefits.

 

To avoid falling further behind, the city needs to add

$259 million to the pension fund next year, about a

tenth of its annual budget.

 

Murphy wants to freeze salaries and says he'll ask

unions to accept reduced pension benefits, but they've

rejected that before. He proposed borrowing the $600

million but didn't say how he'd persuade Wall Street.

 

Many think the scandal, arcane as it is, resonates.

" It hits home, " Boling says. " People in both public

and private pension plans are very concerned about the

stability of their retirement. "