Excerpts from Matt Stoller’s article at Naked Capitalism Blog. Read full story here.

“The big story on Tuesday was Wisconsin Governor Scott Walker’s win over unions and liberals, as voters ratified his attacks on public workers, the young, and women’s rights.  But that vote was relatively close.  Two other voter initiatives, in deep blue California, were not.  San Diego and San Jose residents voted overwhelmingly to cut the pensions of city workers.  In San Diego, the measure passed with two thirds of the vote, and in San Jose, the measure passed with seventy percent of the vote.

The measure gives city workers an option: They can keep their current pension, as long as they agree to contribute more of their salaries — up to 16 percent — to the pension fund, or they can enter a less generous pension plan with a higher retirement age, benefits that accrue more slowly and smaller cost-of-living adjustments. Future hires would be put into a plan that costs even less, and would be required to contribute up to half of its cost.

[ … ]

“The states and localities suffering from budget crises are having problems because Wall Street blew up the economy, and in many cases, ensnared these municipalities in extremely bad deals.  The wealth of taxpayers was and is being transferred to banks.  In 2008, the choice before Bush, and then Obama, was clear.  They could hand taxpayer resources to Wall Street and oversee a series of budget crises in states and localities, with the opportunity for later privatization of public assets and the breaking of public sector unions.  Or Bush, and then Obama, could crack down on Wall Street, and make sure that bailout monies went to states and localities, and, with record low interest rates, spur tremendous investment in new energy, infrastructure, and education initiatives. It was a choice.  Bush picked Wall Street.  Obama also picked Wall Street, with public sector unions supporting Obama like turkeys cheering on Thanksgiving.

Read Full Story Here.