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>> journalist steven greenhut takes a critical look at government workers and the unions that represent them. he argues that government employees have become a huge drain on state and federal coffers. barnes & noble booksellen orange, california, is the host of this event. it's about 50 minutes. >> let's start and read some of the -- just three of the short quotations from the beginning of the book. grover cleveland, one of my favorite presidents, office-holders are the agents of the people not their masters. and that's kind of the resounding theme and yet somehow it's got turned around where the public servants have become the public's masters. and this is from voltaire. the art of government is to make two-thirds of the nation pay all they possibly pay for the benefit of the other third. that's a reality of what's happened.

and finally, thomas jefferson, when the people fear their government, there is tyranny. when the government fears the people, there is liberty. and that's another theme in the book. it's not just about the pension liabilities and the financial costs and the financial burdens. it's about a class of people who have come to control us in many ways. and i find increasingly that we're fearing the government officials and a in a free society it should be the other way around. so i'm in sacramento now. i'm starting an investigative journalism program and news bureau for the pacific research institute. a think tank based in san francisco. we're going to be starting the cal watchdog program in the early session of next january and the whole idea is to keep an eye on the government and the unions that control sacramento.

i've been at the "orange county register" for 11 years and i still write a column for them and i've covered government down here in orange county but now that i'm up in sacramento, the capital city, the den of inequity -- i don't know. i thought i would head up to this place. it's a nice city but it's really a government city. by the way, i'm not too worried that i won't have enough to write about california. all around the city are these yard signs from the sciu union, state employee and proud of it. and that just reminds you of the -- a lot of the people who live in the city are union members and they are quite proud of it. then i got into work and i couldn't get my city-run parking a pass to work in the city run garage and i had to go to city hall and wait in line. and people were nice.

but that kind of surprised me. but of this bureaucracy but then i headed to the post office in downtown sacramento you have to go through the security gates to go to the post office to mail a letter and there is three security guards standing there putting my stuff through an x-ray machine and i waited in line and i told the clerk that i wanted to get a post office box because i'm in the middle of moving and he wouldn't give me because i needed two current address identifications to get a post office box which i explained, if i had two current identifications -- if i had an address, i wouldn't need a post office box. my point for relating these silly stories. i'm not afraid that we're becoming slaves. i'm afraid that we're becoming a nation of people who wait in line and follow these endless rules and that this whole machinery of government that controls everything is run by a

bunch of coddled class of workers who retire at age 50 with $100,000 pensions. that's the kind of world i think we're creating. and the book, those are kind of light examples but my book goes into serious examples, the financial examples, the subhead is how public employee unions are raiding treasuries which is what they're doing. controlling our lives. they really have a lot of control especially -- these are government employees who have a lot of control over our every day lives. and they are bankrupting the nation. we can't afford to continue to do what we're doing. that's my big concern. you know, the old deal was that a government employees -- they'd get lower pay, right, but they would get somewhat better benefits and more job security. that was the old deal and i don't think there were quite so many government workers either when that old deal was in place. the new deal is they retire with very large salaries, often

$100,000 or more. marsha fritz and her california foundation for fiscal responsibility has the $100,000 pension club and in california it's more than 10,000 people and there's other people close to it. and they get cost of living adjustments. they get free healthcare, free courtesy of the taxpayers. and they get better pay. and especially federal employees who get much better pay. and that's the new deal and it's a trouble new deal plus, they get fewer working hours. i know a lot of officials especially in police agencies have their three 12 work schedules. they work fewer days because the stress. that was the excuse for the stress of all their jobs. and what do they do? they work overtime and that has

put a lot of deputy salaries of $100,000 and more and other agency as -- try going to city hall on friday. they are often closed fridays or -- every other fridays. that's because of -- that's because of the deals given to these public employees. they get more time off. so they get everything. they get more time off and more paid holidays and special protections, which is very troubling. for instance, consider the ironclad job security public employees have. and often they get to feel superior to us also. i was reading -- in california we have -- the state legislature has passed a special week celebrating public employees. an example i use in my book -- i wrote about how as a kid i said to my mom, on mother's day, i think it was -- i said how come there's no children's day. and she started laughing. and i pressed her for it, she

said the reason there's no children's day is every day is children's day. well, we don't need special weeks celebrating public employees because every day is public employee day. they get it all. and i'm looking at a couple public employees who are smiling. but there is a certain -- a certain truth to that. and by the way, the government is still hiring despite -- and the public sector is getting obliterated in this economy and cutting salaries but the government is still hiring at the federal and state level. and there have been some cutbacks a, some furloughs. in sacramento they do furlough friday. and make a big deal of it. at least traffic is low. but despite some of these things, by and large the government is still hiring and it's still expanding. and those cutbacks have been far less severe than what people in the private sector get. so how bad is it? i mean, we're in a world in

orange county where a firefighter often their total benefit and pay a packages is $175,000 a year. that's pretty good work. we have city managers making 275, $300,000 a year. they tell me they are like fortune 500 executives. well, they get paid that way. i don't think those bureaucratic jobs really are the equivalent of running an entrepreneurial enterprise where there's some risk and where you can actually get fired and not that i don't think there are a share of incompete incompetent ceos. and there's a class of public safety workers, public safety workers in the state and many jurisdictions get 3% at 50. which means they can retire with 90% or more of their final year's pay available as early as age 50. we have a lot of folks if you start working at age 20 for a police agency, by the time you're 50, you get 3% times the

number of years worked, 90% of your final years pay in california -- they do it it based on the final year's pay and available as early as age 50. in orange county, general public employees in the county government can retire 2.7 at 55 so they get 81% of their final year's pay available at age 55. now, check your own -- check your own 401k plans. i mean, you get nothing like that. and then the public safety is this expanding class -- i know the cooks at the prison system wanted to be considered public safety also. i'm not sure if they got it. but there's always this constant pushing of the envelope to expand the class of people that qualify for these high level of benefits. so one result is exploding unfunded pension liabilities. a very banal sound but it's the

debt, the debt that our kids and grandkids are going to have to pay to make good on all the promises that city council members and supervisors make to these unions that are quite demanding. so once a deal is granted, no matter how falls the premise is of the deal, i mean, if a union comes before a city council and promises that it won't -- this new retropension increase won't cost anything and it turns out they weren't being truthful, it doesn't matter. once the deal is granted, it's a vested benefit that must be paid for the 30 years or so of the life of the contract. so we get these exploding debts. it's expensive. the city of valayhoe went bankrupt.

and the unions -- their approach is make it more difficult for municipalities to be difficulty. they would like an endless sea of taxes. they don't want to cut the benefits. the enormous pension programs -- it's not enough apparently because there are all sorts of pension-spiking schemes that public employees wil employ to increase their already high level of benefits. there's something called a drop program, deferred retirement option plan. which according to gerard miller, a columnist for the governing magazine, which is not an antigovernment publication, he said having a drop program -- it's a form of double-dipping where you're at retirement age, the agency wants you continue working and you want to continue working so you get your full retirement and your full pay and part of it goes into a deferred account that you get when you really do retire.

but he said it's a sign that the retirement programs are too rich. i mean, if your system is encouraging to you retire and you still want to work and your employers still want you to work, then it's absurd but these are the kind of programs that have gone forward thanks to the power of the unions. airtime benefits where public employees can buy additional retirement time and it never pays for itself. there are double-dipping schemes. even employees convicted of crimes they often get paid their pensions. and then, of course, the disability scam. in the "sacramento bee" reported 82% of california highway patrol officers at the chief's level -- they miraculously discover a disability about a year from retirement and that a gives them that extra year off and then it protects 50% of their pay from taxes until they -- until they

leave believe earth, you know, whenever. and their spouse. and these aren't for taking bullets from the bad guys. they are usually for back injuries, irritable bowel syndrome is a popular disability. and then often these deals are granted -- i've seen these a few times retroactively. which means that public employees who are just about to retire, the city councils -- here in orange county the boards of supervisors voted twice for a retroactive deal and i'm about to retire tomorrow and the board increases for an increase when i go back to working. there's no value to the taxpayers or the agency. often it even harms the younger workers because they have to pay more of a contribution to pay for these guys who are just about to retire. and they just get a massive gift of public funds. and there's no excuse for that and yet it's a way to buy off union support.

it speaks to the power of the public sector unions. so these are the type of things that have been going on for years. and especially in the last 10 years when these massive increases have taken place and it's very hard to turn the tide on this. and then here's a great benefit that public employees get that i'm sure none of us who are not public employees don't get. you can't get fired, right? that's a pretty good benefit. the "l.a. times" did a great investigative journalism series on los angeles unified school district and how -- they don't even try to fire incompetent teachers. it can't be done. so they don't even try. there's no trying but the degenerate teachers, sexually harassing people, dealing drugs and all sorts of amazing things -- it takes years sometimes, 10, 12 years sometimes to get rid of these people paw of this long, elaborate union process that sticks up for the bad actors at every case.

so imagine running your own business in a way where you can't even think about firing incompetence. and if you've got some really bad people working for you, it's going to take you years and many thousands of dollars so fight that. and thanks to the unions, the public schools have what are called rubber rooms. that's where these people go. they are taken out of the classroom and they are paid their salary and benefits and they just sit in a room all day, year in and year out, so it's a pretty crazy situation. in one instance the "times" referred a student was making fun of a student who came back from a suicide attempt and was saying to him, in front of the class -- he was making fun of the kid saying, you're so stupid. you can't even kill yourself right. something to that effect and they tried to fire him and to no vail. -- avail. there's the peace officers bill of rights. the old bill of rights the one, you know, we honor and respect and protected the people against

the government. this bill of rights protects the government employee against accountability. sort of that's a troubling sorts of rights that public employees get special rights that the rest of us don't get. there's the code of silence in the law enforcement. that often happens when someone is accused of wrongdoing the other officers protect each other. that's not an official right but that's what happens. and professional courtesy, if you pull over -- if you pull over one of us for speeding or something, we obviously get a ticket. if you pull over another member of the brotherhood, they get escorted home or they get let go. that's the way it works. my former newspaper, the "orange county register," did a study on a special license plate program. it wasn't for police officers. it was all for sorts of category of workers. it essentially -- the government workers on their private vehicles they got license plates

where their addresses were protected. they could speed and go on toll roads without paying, they could ignore parking meters and there was no way to track them down if the orange county transportation authority would capture the license plate numbers of people who were driving without paying tolls on the toll roads but they weren't able to find the addresses of those people. so they weren't able to send them the bills or the fines. and those people were almost always -- they are government employees and this whole program -- this whole program started years ago when there was the concern that the department of motor vehicles was handing out personal information of people. and they didn't want the police to have their home addresses given out to the public. but -- the dmv stopped doing that years ago. meanwhile, the classes of people who get these special protections keeps getting larger.

veterinarians -- after the register story you would think the legislature would act to rein that in. instead they expanded the program to veterinarians, code enforcement officials, and that's how it works in sacramento because the unions control things. this is kind of the epitome of what's happening. we're creating a two-tier society where the public servants get special privileges, they get better pay and better benefits. the epitome to me -- i was driving out towards palm springs and i saw some guy in some fancy mercedes speeding along in the hov lanes and he had the perspective newspaper, that's the public employee retirement system newspaper blocking the window from the sun and he had one of those retired cop license plate holders so he knew he would never get a ticket and i think we're just creating -- i kind of laughed at that but we are creating a world, especially, here in california, where you have people who are kind of above the law. nobody should be above the law.

the public officials -- we need a certain number of them. we certainly need police and firefighters but they should li so how did this happen? well, it seems as if both sides of the negotiating table are in on the deal, right? the these cities -- when they cut deals with the unions, the city officials who are doing the negotiating also get the benefit too, they have every reason to want the deals go forward. when the 3% of 50 legislation was pushed forward in 1999, it was put on a fast track. and the legislature avoided a lot of the hearings and a lot of the normal oversight process. and that's because so many people in the capital had a vested interest in making this happen because they would benefit from the deal also. i think a lot of the worse things in our society, the biggest problems are not partisanship, at least when there's partisanship, there's

debate and there's anger and there are two sides fighting over something. now, granted, i'm no fan of either of the major parties. and a lot of the partisan debates are stupid. but at least when there's partisan debate, there's some focus -- there are two sides. fighting against something. but a lot of bipartisanship is the problem. when both major parties are in agreement with everything, things happen without there being enough oversight and enough debate. and that's what's happening with these deals. democrats are closely aligned with unions, of course, and they are the worst offenders. but republicans are very prolaw enforcement and propublic safety and everyone wants to be posing in those campaign literature next to the firefighters and the police chief with his uniform. so this is kind of a bipartisan thing that's happening here. here in orange county a conservative county, the two

retroactive pension increases happens with boards of supervisors where all the members were republicans. and often these deals just -- it's just rigged from the start. there are these ever green contracts when the old contract expires, it mandates a new -- it mandates new benefits or increases in pay. if the next city council doesn't approve new benefits. so the deals are often rigged. there's cities in orange county that tie the pay of different public employee unions to other cities. they say, for instance, our firefighters have to be the second highest paid in the state. so if somebody up north -- some city council up north decides to increase the pay of their firefighters, then you have to increase the pay of your firefighters. and it's just this ratcheting-up effect. one of the funniest ones i see are the public employees say well, our city -- we're in the -- we're below average in our pay for public employees. we're below 50%.

well, 50% -- half the cities are always going to be below average, right? so this constant ratcheting up -- so they push their pay above average and somebody else falls below average and they say, you know, we're a great city. we shouldn't be below average. and then they -- it's just this ratcheting it up and it never -- i don't see this happening in the private sector. sometimes the ratcheting steams to go the other way. i like to use an example -- here we're in orange county in the city of fullerton, just to give you an idea how these things -- how these happen. a council of five members, three republicans, two democrats. two of the democrats and two of the republicans both apparently were in favor of a retroactive pension increase and this was after all the pension spiking problems had gotten news coverage -- this is recently after the unfunded liability issues had gotten in the news. this is something -- but they

still conspired to expand benefits retroactively for their -- for their public employees. so the one councilman who contacted me -- he contacted me and said, you know, what, steve? you need to know what they're doing. that california's brown act doesn't allow public -- public officials to relay the details of what's happening in what's called closed sessions. but you need to aendize it. you need to tell people what's happening at least the nature of the discussion. so he told me when i worked at the newspaper -- he said they're discussing a pension increase. and i wrote about that. and, boy, did the fury come down on -- shaun nelson is his name, republicans and democrats. they wanted him prosecuted. they accused him of violating the brown act, the open meetings law. he took all sorts of heat for simply trying to alert the public to just the nature of the negotiations. meanwhile, the unions had already voted on the contract. the union members knew the details of the contract.

and that's okay. so one side, the union side, gets to know all the details. the public doesn't get to know anything at all. and that was finally stopped, thanks to the efforts of some people here tonight that i see, but it's really hard -- the game is really rigged. often what will happen is these pension deals -- they'll get mentioned on the council agenda on a friday for a vote on tuesday and the sides -- the unions on the side that's in favor of these deals, the pieces are already in place to pass them. and there's not time for opposition because they keep it as quiet as possible and they drop it at the last legal moment and all of a sudden it's friday. you find out if anybody even noise and reads the agenda and sees what's happening. by tuesday's meeting, the fix is in. and that's how these deals keep moving forward. so if you want to really get

scared consider that a liberal democrat closely aligned to unions basically said that this system is unsustainable and it's because of the power of unions. this is fairly recently. the actuary for calprs who said it's unsustainable, you can bet they are right. and a lot of these pension deals are promoted -- i know this will surprise you, with dishonesty. i know it's shocking that unions are supporters of these deals might not be completely honest. but one of the things i hear often from the police unions is they say, steve, yeah, i know we get these lush retirement deals but we die early. we die 3 to 5 years after we retire. and if that were true, of course, there would be no unfunded liability problem. the unfunded liability is the debt to pay for these long-living public employees but they say -- as police and fire we die early. so that's why we get these deals. so i asked -- i always ask for

data or some kind of study so they always send me to these union newsletters which say things well, everyone knows that police and fire die early. i'm like, okay, i'm stupid so i don't know that. send me the data and it's all circular they send me to other union people who say everyone knows that they die early. so i called -- you know, it took me a while to figure out but i called calprs directly and they sent me the data or they sent me a presentation that they give based on the data. and police, if they retire at 50 and they live 3 to 5 years after they'd retire they would be dying at 53, 56. no they live to be on average 82.6. and that is the identical same age as the miscellaneous members, the other public employee members covered by the public employee retirement system. and, of course, based on what i see, the public employees tend to live in general than the rest

of us, longer than the rest of us. it's not a justification. for these pension deals. another justification i hear is -- i'm told all the time -- i was debating a union -- a union official on a radio program and they said well, the average pension is only something 27, $30,000 a year in california. that's what they said. and it's true. that number is true. but it includes everybody, right? so they don't mention this. most people work for an agency for a short period of time, right. if you work for three years, five years, six years. it's part of the average. and the other thing is it includes all the current pensions going back for many years. and all the massive increases in pensions have happened in the last several years. and that's still two or three times what the average is for the average private sector employee so it's not a very good argument and my book some of these points to help rebut the

arguments that they make. i want to touch briefly on some of the clprs scandals and a lot of these problems -- they are nationwide. a lot of the book talks about california because we seem to be on the cutting edge of everything good and bad on this country, mostly bad, but our weather's nice. [laughter] >> but it does -- it does -- we are worse than others. and the clprs, the public retirement system have been in news because allegations of pay to play. $63 million in finders fees to an official who set up investment meetings. some highly leveraged investments. massive losses in their portfolio. well, my point here in bringing it up -- and clprs, by the way, loves to lecture private companies about proper corporate governance. it was a point -- forbes pointed that out. yeah, they are always lecturing people and look at some of the

scandals and the system support it is. if the investments go well then the public employees get to benefit. and if they go poorly, then they will have to pitch in. and governor schwarzenegger is having to backfill the losses for clprs so my point is the way the system is designed now taxpayers -- we're on the hook for these things and that's the problem with this retirement system. so what's the result? we have massive pension liabilities, the power of the unions leads to the growth in government. i mean, these unions are able to easily tap money for political purposes and they use it to expand government and they also use it for a bunch of causes that many of us might not agree with. it ends up depleting the services. if you can't fire people and you end up spending most of the money on administration, then

kids are getting worse education, right? that's a problem with this. the irony, even -- like in vallejo, city officials have warned members of the public to use the 911 system judicially. so even though the city is spending massive amounts on public safety, they're getting less public safety because that money is going to pensions and to things that are not bends the public. -- benefiting the public. it's leading to depletion of public services. it's hurting us in more than financial ways. well, one spaniels i pointed to -- the unions up in sacramento, they took an action to stop a private group from cleaning up trash along the american river because they wanted union members to be able to do that at union pay scales. but there was no money for them to do that so they would rather have the trash just lying there.

so that's another example of how it depletes public services and undermines our quality of life. and you all know of the washington monument syndrome. in our massive federal government whenever they get a little tight with the budget because they've blown it on all sorts of idiotic things. they close the washington monument because they want to annoy the tourists who will presumably go back to their districts and say, wow, they are cut to the bone in washington. they even had to shut down the washington monument. well, in san diego, which is the poster child, the city of san diego, for pension abuse, my goodness, they're talking about bulldozing the fire pits at the beach to save a few pennies because of the city's budget crunch. so expect more of those types of examples and that's due to the union power and the excessive spending. i go back to the point. it's a theme in the book. we're creating a two tiered society.

and the more power unions have, the less accountability their members have and the more abuse we'll see. and it also -- union power destroys chances at reform. it's very hard to reform our educational system. even noted conservatives such as antonio villaraigosa, the mayor of los angeles has called the education system in los angeles this new civil rights issue of our time and, you know, he's our time. because the dropout rates -- he was -- l.a. officials were arguing over whether the dropout rate is 35% or 50%. and i heard they're both wrong. it might actually be 60%. i mean, can you imagine that if -- i flew here on southwest airlines. imagine if their failure rate was only 30% of the time, right? [laughter] >> imagine if your brakes, you know, only worked 50% of the time. we might think there's a problem. and most of these problems are tied to union power.

and the unions are not interested, obviously, in reforming things. they're interested in protecting their members. and if it means protecting their worst members, so be it. if it means protecting a system that harms children, so be it. you know, in the school system. it harms of rest of us and everything else. okay. as far as what do we do about it? well, i always say it's taken a long time to create this mess. so it's going to take a long time to unravel it. so we start unraveling the mess. now, technical solutions don't seem too hard to come up. with. there's a couple of initiatives that would create a new mandatory second tier retirement for government employees. it still would be a defined benefit. that's where their promised a set rate of return rather than a defined contribution which is how those of us in the private sector get a retirement where the employer contributes a set amount and at least knows how much they'll be contributing and then how we do, it depends on the market and how we choose to invest.

but it would help things so that would help. i think an initiative that would require a defined contribution rather than a defined benefit would help. but it's hard to get any of these things passed because of the power of the union. so mark talked a little bit about his paycheck protection initiative which would make it harder for unions to just take the money from their employees pocket and spend it on political purposes. so that would be one way of addressing the power of the union. but whatever the answers are, that's one. there are probably many answers. and we need to look at those answers. we need to first, though, start by recognizing the problem. and when we started -- when i started thinking about this book and proposing it, nobody was interested in it a year ago. no one was that interested in the problem just because it seemed like an arcane problem. and i remember the first publisher i approached didn't think there'd there would be

much interest in it. and there's increased interest, even in mainstream media and in publications you wouldn't think would be hospitable to my views on this seem to be echoing a lot of these views. over here at jack gene over here runs the pension tsunami website. and i look through that all the time. and the stories -- there are lots of stories. i mean, there's interest in this issue. and i was -- a friend of mine sent me an email from an union compiling all the different stories about the pension issue. and not a single one on the long list that i saw was positive to their side. so there's a lot out there. there's a lot of interest in it. so i think the whole point is to capitalize on this interest. and to try to create some meaningful reform and california is still a great state. and it's still a great nation. i mean, this is a nationwide problem but in states like california, new york, new jersey, illinois -- it's an unsustainable problem. and it has to be addressed.

we've got to start somewhere so hence the subtly titled "plunder!." hopefully people will at least get -- ignite some interest in reforming things. so thanks for coming out tonight. and i'd be glad to entertain some questions and then we could sign some books. [applause]y thway, on questions, everyone needs to go to the microphone and -- c-span is taping this so please go to the microphone. sir? >> the first question is -- [inaudible] >> well, i think -- when i was writing at the "orange county register," just coming across a lot of these stories -- especially, some of the way these deals got through, it really started to infuriate me

watching city councils just quietly push through deals that are so costly and so troublesome in the long run. and then reading about the pension liabilities and watching the unions. and some of the power and their power play is very disturbing. definitely not for the public's interest and that's what got me interested in that. thanks. [inaudible] >> you pointed out a lot of the problems that was exposed and you started to address the potential solutions. will those solutions ever happen before we go bankrupt? >> i mean, that's good question. i think in california -- there's enough interest, i believe, that there's initiative that can pass. i don't know -- i just don't know as far as politically what will happen. i watched so many good initiatives go by the wayside and california -- the way the

districts are gerrymandered, it's hard to change, i think we can. yeah, we're ready for another prop 13. something of a major impact type of initiative. and i believe the public is starting to understand it. >> they surely are. you touched on two subjects that i'd like to cover with you you. one of them is even at the local city council level, how do you feel about being on the city council for 12 years, getting lifetime healthcare for a part-time job? >> yeah, absolutely crazy. absolutely crazy. >> one other example it happened in mission viejo, troubling your paycheck going back to 20 years in our city, long before these people were elected because they never had an increase so they used 5% a year times 20 years to double their paycheck. is that something you support? >> oh, i don't think so. >> thanks, steve. >> thanks a, larry.

>> here's the orange county treasurer. >> i live in newport beach where lifeguards just became safety officers and get three at 50 and last year the highest paid lifeguard in newport beach was $199,000. if california goes, so goes our nation. california is working very, very hard it off drive very, very fast into a fiscal crisis. they have the same rating as botswana. do you feel any panic in sacramento yet. and if so, what do you think that panic will turn into? are there any solutions that can actually be generated from sacramento? >> yeah, i can't imagine the legislature will do anything. they seem to be in la-la land

when you look at the bills that gets passed. i don't see any real understanding of it. of course, we have endless budget deficits. the latest proposal is $20.7 billion. chris, you'd probably be best to address what could be done. you helped predict the bankruptcy in county in '94. i mean, so you saw a fiscal calamity coming. >> i think california literally has to miss payroll. i guess the low point is in february, it's $11 billion of capital. i think they can finance that. but there will be junk bonds by the summer at $23 billion of cash and i think, quite frankly, they'll default. and maybe through a default it would be like orange county where we currently have a double a credit rating and rising cash flow and we're willing to make the decisions that, you know, have the pain but keeping us solvent.

>> i spoke to a group last weekend. i was a little bit hopeless. i just couldn't see any real way out of the morass. i do think some of these initiatives could help but it's really hard to see how to turn the tides on union power. i have one example in the book where reportedly, you know, the governor was talking with the democratic leaders. and it was clear that they couldn't -- they didn't have the authority -- these are democratic legislators. they didn't have the authority to negotiate with the governor. so he said -- this is all reportedly, go back and talk to the people who you serve, meaning the unions and then come back and talk to me and tell me what it is you're allowed to do. i mean, with that kind of power in the legislature, i can't see -- i just can't see how anything will change and with our districts, i think it's -- it might take a calamity, a fiscal calamity. >> this will be a great bestseller and you're doing a great job, steve. >> thanks, chris.

>> we've already heard from mark and the citizen campaign and the initiative that's coming up along with some other initiatives. five or six years ago when arnold schwarzenegger took over and he was going to break up all the boxes, which didn't happen, he tried some initiatives as well and they went down to a crushing defeat and maybe you'll comment why they lost and why these initiatives may pass this time. >> i mean, the unions just spent enormous amounts and they -- of course, they pulled out the old kinard claiming all these things, pension reforms would endanger police officers and there isn't seem to be enough money to fight it. i don't know what kind of money is being raised. something has to be done to break the power of the unions. so i think maybe the paycheck protection could do that by making it harder for them to raise the money.

now, mark -- i've talked to mark before about the problems he had last time he had a paycheck protection initiative. the unions pulled out all the stops. so it's a tough campaign. i think that's key is somehow addressing the power that the unions have to raise money. >> the second question is, you know, the states upside down maybe $15 million a year or maybe in that neighborhood. they can't raise taxes 'cause we're already the most taxed state. and they can't cut programs or a lot of the programs because they're already closing libraries and things. it only leaves the public employee unions and the pensions and the wages. i mean, when are they going to go after that? >> you know, one thing that's frustrating is i see a lot of efforts by people who want to fix california. everyone seems to agree what the problems are in california we have a dysfunctional government.

we have a constant budget crises, we have crumbling infrastructure. the state used to spend 20% on its infrastructure and now it spends like 3%. yet we continue to spend more and more. some folks, like some of the moderate -- members of the moderate business community believe that we need a constitutional convention and their main goal is to undermine the two-thirds vote requirement in california. you need two-thirds vote to pass budget and to increase taxes. so a lot of folks believe that the main goals is to make it easier to raise taxes and the unions -- i actually red the secius proposal for fixing the california budget and they'll raise taxes and spend it and more people will move to nevada and arizona. and it's just a death spiral. so i know those kind of proposals are out there. there's an initiative

circulating would undermine prop 13 the property tax limiting statute from 1978 that controls property tax increases. once we get into the spiral of just raising taxes to pay for this whole system the state is toast. i'm not sure politically speaking how to raise the money or do what's necessary to stop these things. but a lot of the ideas out there are bad. just because people agree on what the problem is doesn't mean they can come up with a solution that works. >> steve, thank you for writing this writing this book. it's wonderful. listening to you a couple weeks ago, maybe "plunder!" 2 would be the extortion industries that are serving our municipals. mission viejo is a contract city and eight years ago we paid the sheriff $8 million to service our community.

now it's close to 17 million eight years later. i don't feel twice as well protected in that community. so i think in line with, you know, the grass has turned brown and maybe the agencies that are extorting the taxpayers. >> the grass is browner on the other side. >> right. >> it seems like -- the only thing that ever helps on anything is competition, right? and that's what government does too much. and we need more competition. the school system -- what's the problem there? it's a monopoly school system that they can take as much money as they need -- i mean, 60% of the state's budget goes to education including university level. and it all goes to a monopoly system. so on all areas we need competition otherwise we get this constant ratcheting up of costs and we don't get subsequent increases in benefits and services. so we're getting -- in and

california used to be a model of nation tom mcclintock wrote the forward and he talked about services that were the envy of the nation and we continue to spend more and get less and a lot of it is union power and when you don't have a competitive environment, you're going to get more -- i compare our school system to -- i've used the example, imagine if we built cars the way we create schools, we would be driving $200,000 yugos because that's the nature of the system. we drive cars that are made by private companies except maybe for one company that isn't so private anymore. yeah, competition has always been that thing that works. and in an environment of monopoly choice, unions are able to exert their power, give us fewer services and for a lot more money.

>> jack dean, editor of pensiontsunami.com. there are, i think, two examples of how this thing may go. about a month ago the small town of prichard, alabama, declared bankruptcy. in september they just stopped sending out pension checks paw they'd run out of money in the pension fund. and november the city employees sued them to get their pension checks but, of course, there is no money. so it'll be interesting to see how that plays out. the other one is closer, of course, in san diego. they have discovered while they're cutting the budget, every department is cutting its budget, the line items still continue to get larger because the pensions are taking more and more money, the benefits. so i think as people begin seeing that even though they are

cutting the services, the budget continues to grow and the expenses continue to grow that there will be an uprising. this is a nonpartisan issue even though we've talked about -- you've discussed the democratic -- >> republicans have done lots of harm, too. >> and the same is going to apply, i think, in the end with the public in that both republicans and democrats in the public are going to say we've had enough. and libertarians and greens, socialists because there will be no more money for programs. >> well, one thing i found -- some allies who are liberal democrats who realize if you spend all your money in your budget on retired police and fire and other government workers, there's no money for parks and libraries and other important services, or current police or current fire. okay. one more question. >> couldn't we just make them suffer at $70,000 a year, you know, publicize that and say that's all you get for retirement and make us so we can

go bankruptcy and get out of some of these contracts and still rewarding them because they cheated to get there. they double dipped. they manipulated the system and they even have courses on how to do it. so it was not in good faith at all. they're not public servants. you know, we're serving them. i mean, the thing is it is so grossly unfair what they're doing that that's why we're going belly up and all we want it fair. i don't want these people to suffer or starve when they retire and when you go to the south pacific and you see all these public safety people on yachts. >> and my union friends you want us to eat dog food. there's a lot in good earning $120,000 a year and eating dog food, right. so some kind of reasonable amount. we all want -- people should be paid a reasonable amount and have a reasonable retirement. well, thank you so much for coming. i'll be signing books. [applause] >> thank you.

>> steven green hut is a senior institute.the goldwater find out more at goldwater institute.org. >> a lot of this book is about culture and about how culture matters. and by that mean how does -- where we're from and who our ancestors were make a difference in on you we do our jobs and how good we are at what we choose to do for a living. and that's -- take that idea and it takes up the whole second half of the book and it's a very, i think, profound and sometimes difficult thing to wrestle with. and so one of the examples i use in the book to illustrate this point of how much culture matters is plane crashes. i have a whole chapter on plane crashes so what i thought i would do today is tell a story from that chapter. and i'll warn you, though, that

i'm not going to tell the whole chapter. the whole chapter -- i'm taking an excerpt out and so what i'm going to tell you you makes a good deal less sense than the version you'll read in the book and it's also a good deal scarier than the version you'll read in the book. but who in this room will be flying on a plane in the next month or so? [laughter] >> i'm sorry to hear that. [laughter] >> but i think -- so it is scary. the most important thing about this plane crash that i want to talk about is that it's scary not because it is unusual. it is scary because it is typical, which is a very important thing to keep in mind. so here it goes. the crash i want to talk about was a plane which takes off from colombia on january 25th, 1990, bound for jfk airport in new york.

and as most of you know, colombia is not that far from the united states. it's just on the other side of the caribbean sea and to get up to new york from colombia you cross the caribbean sea and the gulf and you go up the east coast of the united states. but as it happens, this was january. and there was a nor'easter along the east coast. and all kinds of planes were delayed that night. among them this plane. so here they are on a relatively routine flight from colombia to new york. and the captain of the plane -- so they are flying this plane and they start to get held up by air traffic control.hú and they are held up because the weather is so bad. very, very thick fog and high winds. they are held up in norfolk, virginia, for 20 minutes and above atlantic city for 30

minutes and outside of jfk for an 30 minutes. after an hour and a quarter of delay they are cleared for landing and they come down into the runway at jfk and they encounter really severe wind shear when they are about 500 feet above the frowned. -- ground. wind shear, i'm sure most of you know is the situation where the wind is blowing very heavily in the face of the aircraft and so you add power to maintain constant speed and then at a certain point the wind just drops off, boom, all of a sudden you're going to too fast. now, normally in that kind of situation what happens in a plane is that the the auto pilot will adjust and you'll be able to land safely anyway but for reasons we don't understand the auto pilot was turned off on the plane possibly because it was malfunctioning. and so the pilots executed what's called a go-around which is simply when you're coming in to land and you realize you can't make the runway so you pull up and you circle around and they made a big circle around long island and they

reproached for a second landing and as they were flying towards jfk to come in for this second wind, the engineer, the flight engineer cries out flameout on engine number 4. and then flameout of engine number 3. one by one the engines were just blowing and the captain says at that point, show me the runway because he thinks if we're close enough to jfk i can guide this plane. they are 14 miles away from the airport. and so they crash. they come down and they actually crash in the backyard of john macro's father's estate on oyster bay in long island. 73 people die and it's the worst accident in many years and the next day, of course, the flight investigators come and they comb through the wreckage and they go to the black box and

they start their investigations and typically they can take weeks to uncover the cause of the crash but in this case it doesn't take weeks. in fact, they know by the next morning what caused the crash of the plane. and it has nothing to do with the plane. the plane was in perfect working order. and it has nothing to do with the pilots. they weren't drunk or high or sick or -- it was nothing to do, in fact, with the weather although the weather was certainly bad that night and it had nothing to do with air traffic control. they didn't make any catastrophic mistakes. the cause of the crash was really simple. to put it in the argut of the aviation world it was fuel exhaustion. it ran out of capacity. now, when i said in the beginning of this a typical crash i didn't mean that planes run out of fuel all the time. they don't. what i meant by saying that it was a typical crash was that it took the form of -- it did not have a catastrophic cause. we often think that accidents like plane crashes are catastrophes in the sense that

something blows up in the cockpit and the captain is thrown back against his seat and he says, dear god and the flight attendant comes rushing in it and her face is ashen and in the back the passengers are screaming. that's our mental image of what a plane crash is, right? that's what we've seen in hollywood but nothing could be further from the truth. plane crashes really rarely take that form at all. what they tend to be far more often is a very sort of subtle process that begins very slowly and gradually overtakes the pilots until the plane ends up in some kind of irredeemable crisis. >> this was a portion of a book tv program. you can view the entire program and many other book tv programs online. go to booktv.org. type the name of the author or book into the search area in the upper left-hand corner of the page. select the watch link. now you can view the entire

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