Over at Forbes I talk about Scott Walker’s plans to layoff 1,500 state workers and cut $1 billion in state aid to schools and local governments. I think Walker is doing what Chris Christie would like to do, and what reformers like Michelle Rhee never had the power to do – he calls it balancing the budget, but really this is the bald face of conservative education reform. For a long time conservatives played around at the margins, flirting with school choice, flirting with vouchers. It wasn’t until prominent Democrats joined the school choice movement that Republicans became emboldened enough to go for the jugular.
I mentioned this before, but we’re hosting a League Roundtable on the questions facing organized labor in America.
The series was kicked off by Kevin Carson, who wrote about Taft-Hartley and other ways the government has legally restricted the ability of workers to organize.
That was followed up by Mark Thompson, who argued that market anarchy favors labor over management.
Erik Vanderhoff wrote about his own experience in a union.
And today Freddie deBoer laments the lack of pro-labor libertarians and argues that libertarians should be in favor of labor rights, and that a strong labor movement could in fact make government less necessary.
More to come.
Mike Konczal has an excellent post up on the three-pronged approach Wisconsin Governor Scott Walker is taking in his stealth budget. In fact, he’s charted the whole thing out:
The assault on unions is currently the most obvious and contested part of this plan (despite the health of the public pension system in Wisconsin), but others – like the no-bid contracts and privatization scheme – are now coming to light. The last, and perhaps most significant, is the attack on public services and particularly healthcare for the poor. Mike writes:
This is the most important thing that has gotten the least coverage. The administration of Medicaid would be moved away from the state legislation to be more directly under the control of the Governor’s office. People may be dropped right away and there could be extreme games of chicken with the Federal government over medicaid spending.
The Wisconsin Department of Health Services is currently being run by Heritage Senior Fellow Dennis Smith, who has been making his right-wing think tanker bones arguing that states should drop out of Medicaid, the long-time dream of the extreme right. It is telling that “Smith wouldn’t discuss Medicaid provisions in the upcoming budget bill” even though it’s all he’s been writing about for years.
Specifically, one of the last things he wrote had this talking point: “Congress and the Administration have enacted a sweeping overhaul of one-sixth of the American economy, dramatically expanding the scope of federal power….When governors and state legislators realize that they have been reduced to mere agents of and tax collectors for the federal government, bipartisan opposition from the states will be inevitable.”
This power grab by the Governor will be the beachhead for slashing medicaid rolls to record lows and planning the conservative opposition against health care reform more broadly. The people who elected the Governor deserve more information about what his ultimate goals are.
Similar efforts to slash the Medicaid rolls are happening in Arizona, and across the country.
This is blatant overreach on the part of conservatives who are coming at state budgets with all the drunken gusto of Tea Party fever. Walker wants to make any tax increase subject to a 2/3 majority in the legislature. And if you’re not willing to consider tax hikes to help balance the budget you’re just not serious about deficits, period. It’s just not possible to cut your way to a balanced budget while simultaneously slashing taxes for businesses and the wealthy. The myth that low taxes will lead to business investment and job creation is just that – a myth. These myths have wormed their way into the conservative psyche, just like the myth that lower taxes will generate higher revenue.
Furthermore, it’s important to note that all these austerity measures and privatization schemes and slashing of state budgets are completely wrong-headed to begin with. A recession is simply not the right time to make deep cuts (and yes, I realize states can’t borrow money but they do have the ability to raise tax revenue). Austerity measures in Germany – once touted by conservatives as a model for economic recovery – have led to a slowdown in the German economy.
The only silver lining is that I think this overreach will lead to a backlash. Most Americans side with the unions in the Wisconsin fight. And I imagine even more would be up in arms about the no-bid contracts. Top that with severe cutbacks in Medicaid coverage, and you’ve done what the Democrats couldn’t do in 2010: mobilize the Democratic base.
I like big colorful pictures and graphs that throw things into perspective. This one goes well with that pie-chart I had the other day:
Andrew Sullivan has two more posts up on Wisconsin, and both are remarkably even-keeled. In the first, he looks at Walker’s campaign promises and notes that Walker did campaign on cutting public sector wages and benefits:
But not end their collective bargaining rights on everything but wages. There’s no reference to any such bid in the final gubernatorial debate. Here’s another substantive piece on Walker’s positions on public sector unions from before the election. Again no mention of collective bargaining. The same can be said about his State of the State address on February 1.
I disagree with Andrew’s take on public sector unions in general, but he’s right about this:
If you campaign on one platform and then suddenly up the ante, you cannot cite democracy in your defense. And there is something bizarre about Republican commentators who cheered on Tea Party protests against a clear Obama campaign pledge – health insurance reform – suddenly decrying public protests against something a politician didn’t campaign on.
Without solicitation of bids? How is that frugal? How is that conservative? It couldn’t be anything to do with the Koch brothers, could it? And wouldn’t it be more fiscally conservative not to simultaneously add over $150 million by rescinding tax hikes on those couples earning over $300,000 or individuals earning $150,000 at the same time as asking for sacrifices from people earning a fraction of that?
It’s not the cutting of public sector benefits that concerns me. I think the budget situation demands such cuts, and Walker deserves credit for saying so and following through. It’s the combination of no bid sales to corporations, exemptions for public sector unions like cops and firefighters who backed his election, and simultaneous tax cuts for the successful – in the context of asking for general sacrifice.
As I’ve noted previously, the Wisconsin public unions aren’t actually that well-compensated – their average pension is just $24,500 – and they have already told Walker they’d take hits. So the notion of shared sacrifice is not the issue here – at least for the unions or the Democrats. Walker is obviously interested only in busting up the unions and outsourcing public services to his wealthy supporters. This is not about the deficit it’s about conflicting visions of what the American dream means. There is a fundamental disconnect over notions of liberty and fairness in America. And this is where we get into Big Picture territory, which I think Andrew is still missing. Do we want a ‘right to work’ for whatever big business dictates, or a ‘right to work with dignity’? Because that’s what’s being stripped from the American worker more than anything else. With every new round of layoffs and outsourcing, the dignity of the American worker is diminished.
I don’t agree with Andrew on the issue of public sector unions at all but at least this post is a good deal more measured than many of his recent efforts. It’s also revealing of a certain mindset that I think a lot of Americans share.
I will try to explain how I see the situation. Here are the talking points you hear from many libertarians and conservatives, in no particular order:
1) The government is out of money, and we need to cut spending or future generations will suffer.
2) Austerity should be for everyone, not just private-sector workers.
3) We cannot raise taxes – even on the rich despite their inordinate wealth and not on corporations despite their extraordinary return to profitability during the jobless recovery.
4) Public-sector workers have unsustainable wages and benefits. They need to be brought in line with the rest of us by whatever means necessary.
5) Union-busting is just democracy in action. Protesting is ridiculous. The Republicans won, deal with it.
6) Passing health-care legislation is tyranny. Tea-party protests are democracy in action. Democrats won, but it’s our duty to obstruct them at every turn.
So this hodge-podge of talking points spins an oddly appealing yarn for many Americans. We must all pull together to sacrifice – but not by raising revenue or taxing those who can afford to be taxed, but rather by laying off public sector workers (since private-sector workers have already been laid off) and cutting back their benefits (since private-sector workers had to have their wages and benefits cut) and busting their unions (because that’s what we did to the private sector). The government is out of money, so we must all tighten our belts. Or, rather, those Americans who depend on public services must tighten their belts. The fabulously rich get a free lunch and are sent on their merry way, lugging along piles of cash and a much more productive workforce thanks to the ever-looming threat of double-digit unemployment.
Meanwhile, as John pointed out earlier, the first wave of 401k retirees is facing a serious crisis. This should come as no surprise. But context is especially important. At the same time that we’re discovering that the 401k model is unsound, we’re also seeing a concerted effort to attack the last bastion not just of unionism in this country, but of pension-based retirement plans. And the even larger picture, if we zoom out a few hundred feet or so higher, is that this is an attack on the middle class and on the future of the middle class in America. Not just on the public sector, but on the entire middle class, private sector included (though those battles have largely already been fought, and the middle class has lost them one by one).
Alex Knapp illustrates the distribution of wealth in this country with a handy piechart:
Alex notes that, “As you can see, this is why the wealthy in this country pay most of the taxes — they have most of the money, by a staggering amount.”
More charts and numbers here.
Good thing the Tea Partiers have gotten themselves over to Wisconsin to help Breitbart counter protest against those greedy unions.