That being said, the increases in compensation ARE due to the bubbles, and I have always agreed that some concessions need to be made. But if the public workers make those concessions (let’s say, rolling back compensation to 1997 levels, with adjustments for inflation/deflation and population growth), then EVERYONE else who benefitted from the bubbles needs to take a similar hit. That means that the wealthy would need to see similar drops in their wealth as asset prices revert to ~1997 levels. After all, rolling back public compensation would only be fair if their purchasing power (and that means REAL purchasing power — asset prices, included) was rolled back to the same level. How well do you think that would go over?[/quote]
Here’s where I disagree. Public employees take little to no risk in their careers. As I’m sure you’re aware, it’s *almost* impossible to get fired from a public position. And even if total compensation were cut back to some degree, growth in total compensation is still quite predictable over the long run (as any cutbacks are a blip). This is not the case in the private sector. While I am also frustrated by the seeming intractability of the private sector bubble compensation – the fact remains that these folks took risks. Now, they may be over-compensated for the risks they took but… they took them. Not so in the case of public sector employees. Consequently, the two are not comparable for the dimension on which you’d like them to be comparable.
