Today in 'What Everyone Knows' (11-28-12)

Everyone knows that public sector pensions are driving US states into insolvency, and that the road to fiscal sanity runs through virtuous austerity, and requires that we rein in these public sector commitments. That piece of common knowledge leads to stories like this one: stories that blame the pension problem - that is, that parrot 'fiscally conservative' politicians who blame the pension problem - for looming threats to vital governmental functions.

Here's how all that looks in Pennsylvania, where the state budget secretary released a report (a policy report, mind you, not a political document reflecting party discipline on a matter of ideology) saying just what you think it would say. First: "Without reforms, the state could be forced to cut funding for public safety, health and human services, education, roads and bridges." Then, the solution, as reported by Reuters: "Instead of raising taxes or cutting current retirees' pension payments, [PA Governor Tom] Corbett should consider increasing employee contributions, raising the retirement age and moving away from a defined-benefit plan, the report recommended."

What this story and stories like it leave out is that the pension problem is not just a problem; it is the core of a political tactic, and the tactic involves treating the problem as a fetish. The pension problem becomes a fetish in the sense that it is treated as a magical phenomenon, with no discernible causes or relations to other states of affairs. So it's not as if pension funds lost value when the bursting housing bubble took down state revenues, or when the stock market collapsed afterward. (Recognizing that factor might put the question of increasing revenue on the table. Or the question of what else took down state revenues, including shady Wall Street financing deals.) And it's not as if these public funds were throwing good money after bad by contracting with Wall Street investment managers, whose work underperforms both their benchmarks and cheaper index funds that are not actively managed. (Recognizing that factor might put on the table the question of our ongoing fealty to Wall Street, and of Wall Street's virtually unacknowledged responsbility for the dire economic straits that most people not on Wall Street now face in one way or another.) It's just that we've finally come to see that we can't afford these pensions, no matter what.

I mention this fetishization of the problem not to say that the underfunding of public pensions is not really a problem - it is a problem, don't get me wrong, given the horizons of our politics and economic policy now. I mention it because it is they key to a political strategy, one of the defining ones of our time. The pension issue is constructed not just as a problem but as the problem, when it might be construed instead as one of the many symptoms of some deeper problems. But treating public sector pensions as the main problem is nicely compatible with campaigns to shrink the state, and to discipline labor, and to foment tensions between private sector workers and their public sector counterparts as a way of disciplining labor, and so on.