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Borrow money from Teacher pensions to pay for the roads: The West Michigan Policy Forum, Neoliberal Economic Austerity measures and how to undermine the Public Sector

July 8, 2019

On Monday, July 1st, former Republican State Legislator and now the policy advisor for the West Michigan Policy Forum (WMPF), was on Michigan Radio talking about, “a way to ensure teachers’ retirement promises are funded; and how securing this repayment could also provide funding for roads.” 

Bolger said on Michigan Radio, “The West Michigan Policy Forum proposes borrowing $10 billion through a pension obligation bond and putting that money into the underfunded Michigan Public Schools Employees Retirement System.” 

Chase Bolger also begins his comments by talking about the Teacher Pension Fund in Michigan as “unfunded liabilities” of the State of Michigan and that the WMPF believes that teachers deserve that money. This interview on NPR leaves out one major component in the discussion on the Teacher Pension Funds.

First, in 2016, the West Michigan Policy Forum was backing legislation that would remove the decades-long contractual agreement between the State of Michigan and the teacher union to remove the state as the primary source to pay teacher pensions and transfer that responsibility to the market.  That legislation was adopted, which means the traditional pensions have been eliminated in terms of how they get paid and are replaced with 401k-type plans leaving the teacher pensions in the hands of the speculative capital market. At the time, the Michigan Education Association stated that, “This is a nation-wide attack, led by Enron billionaire Tom Arnold, whose Arnold Foundation is flooding right wing think tanks across the nation with funding to do this work. The Enron meltdown cost public pension funds $1.5 billion in losses.” 

Second, the West Michigan Policy Forum has not been shy about their efforts to undermine unions, such as the 2016 legislation to attack the teacher unions and more recently, their push to undermine public sector unions, by calling health care benefits and pensions of government employees “unfunded mandates” as well.

Therefore, what Chase Bolger and the West Michigan Policy Forum is now proposing, is to take money from the Teacher Pension Fund (money that was previously guaranteed by the State and now is placed in the speculative capital market) and place that in the speculative capital market in order to make money to pay for the roads. Not only does the West Michigan Policy Forum see the speculative capital markets as the financial savior of us all, they are ultimately interested in pushing Neo-Liberal economic austerity measures in order to weaken the public sector.

What do we mean by Neoliberal Economic policies or austerity measures? Here is a solid explanation of these kinds of policies by Elizabeth Martinez and Arnoldo Garcia: 

1. THE RULE OF THE MARKET. Liberating “free” enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers’ rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say “an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone.” It’s like Reagan’s “supply-side” and “trickle-down” economics — but somehow the wealth didn’t trickle down very much.

2. CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water supply — again in the name of reducing government’s role. Of course, they don’t oppose government subsidies and tax benefits for business.

3. DEREGULATION. Reduce government regulation of everything that could diminish profits, including protecting the environment and safety on the job.

4. PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.

5. ELIMINATING THE CONCEPT OF “THE PUBLIC GOOD” or “COMMUNITY” and replacing it with “individual responsibility.” Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves — then blaming them, if they fail, as “lazy.”

Lastly, another aspect of Neoliberal economic policies it that they limit our imagination about how to actually deal with economic problems. Neoliberalism says that the market can solve all our problems, when in fact this is a false solution. The reality is that the State of Michigan is not without insufficient funds, rather it is compromised by how to generate and distribute funds.

If the wealthiest sectors and corporations were adequately taxed, that would generate a massive amount of funds for the state.  Another issue is how much money leaves the state of Michigan to pay for US militarism. According to the National Priorities Project, in 2018, Michiganders were paying $18.63 billion dollars to support the US military. Imagine if part or all of that money stayed in the state and was used for the roads, education, environmental clean up, clean energy or affordable housing? The National Priorities Project provides clear trade offs for what the tax money from Michigan that goes to the military could be used for.  If we practiced radical imagination we wouldn’t be subjected to the awful neoliberal economic policies being proposed by the West Michigan Policy Forum.

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