Mead writes, “Technological change, global competition, and the rise of a more dynamic economy have wrecked the old social model. . .” You forgot to mention massive immigration. Are you chicken? 🙂
Skimmed your article, and I think it doesn’t explain what the real problems might be.
Imho the US has been devastatingly mismanaged in both the public and private sector since the mid to late 1960s.
It would take a lot longer explanation to explain this, than merely making a comment.
Suffice it to say the public sector union problem is a result of this mismanagement over the last 50 years.
Public workers should not have their wages reduced, but the rest of the population should have their wages increased. The middle and working class have been ruined because their wages have not kept up with inflation.
Of course a simple solution when Greenspan became Fed chairman would have been to continue doing this after Volcker.
But then that never happened.
Machiavelli’s comments on democratic virtue in his Discourses On Livy are very pertinent here.
California’s on-going mess is clear evidence of the loss of democratic virtue by its people, who firmly believe they can vote themselves into paradise without paying for it. I don’t know about other states, but that is exactly what is going on here and there is no end in sight.
Joseph Day–The answer is simple. Increase the minimum wage!
Yes, let’s raise everyones wages: because economic rules have no meaning at all. And it is so much easier to pass on the dire consequences of such stupidity to our grandchildren
The problem is that the vast majority of Americans are getting poorer not richer; first less educated private sector employees experienced this and then more educated professional workers including doctors and lawyers learned that they would have to work harder to keep their jobs and earn less money. Public sector employees are merely the latest group of working Americans to experience what it’s like to watch their working conditions deteriorate as their standard of living goes down. Practically the only group in America immune from this phenomenon is the barons of the financial industry who alone can count on the government to bail them out from their disastrous decisions because they alone have the ability to destroy the world economy with their greed and ignorance.
As the vast majority of Americans continue to get poorer and as workers who thought they were immune to this process continue to discover that they’re not, political unrest is likely to get far worse. My guess is that the situation in Madison is merely the precursor to a series of political events that will be far more vociferous and potentially even dangerous.
WRM didn’t mention it in this essay, but the Blue State model that he believes is dying didn’t just materialize out of thin air. It was born from the Great Depression when our nation’s leaders realized that dramatic reforms to improve people’s lives were urgent before far more radical solutions were imposed by an increasingly radicalized citizenry. Could the same appeal to radicalism happen again? Only someone unacquainted with history could rule out the possibility.
The problem with the recommendations Mead makes to improve the future and maintain American living standards is that they are incoherent. His statement,
“It is children, not teachers, who need to be at the center of education policy. It is the provision of services, not lifetime employment for providers that ought to engage the attention of governors and legislators around the country.”
tells us absolutely nothing about how to maintain the standard of living for the average American.
Mead may very well be right; perhaps the Blue State model is doomed. But if it is, what’s the likely result? Has the disappearance of private sector unions resulted in an improvement in the living standards of private sector workers or has it accelerated a decline in their living standards? Is a decline in public sector unions any more likely to raise anyone’s living standards than a decline in private sector unions did?
If teachers unions are forbidden to engage in collective bargaining what is the likely result for pay and benefits for school teachers? As their pay declines and as school districts are incentivized to replace experienced, high priced teachers with low paid, inexperienced teachers, are the school children everyone is supposedly worried about going to get a better education or a poorer education?
It seems to me that when government has the ability to pay less for school teachers it will, and the result will be less qualified not more qualified school teachers. In virtually every other field of endeavor it is universally recognized that experience is an excellent proxy for quality. Who prefers the first year surgeon over the surgeon who’s been practicing for 30 years? Who prefers that their case be handled by the law firm’s most junior associate instead of its most senior partner? Who prefers to pay $25,000 a year in tuition at Bard so they can be instructed by a teaching assistant or a postdoctoral fellow instead of an experienced faculty member like Professor Mead?
All of this is very gloomy but WRM’s optimism is hard to understand; other than his theory that the English speaking people have faced hard times before and have managed to prosper, what’s the new and better incarnation of capitalism that he has in mind? If he has one to recommend, he certainly hasn’t provided his loyal readers with any of the details.
Fire all teachers who called in sick and went to protest at the capitol. You can’t do them all but there are enough on TV to make some fine examples.
I vehemently disagree with the contention that the public union workers are mere innocents, playing by the rules as they found them. The devoted and selfless servants (ha!) contributing so much more to our society than the rest of us who pay them.
They are as guilty of greed as were Bernie Madoff’s victims. Do you believe that they did not know that while they pay nothing into their retirement and health insurance accounts, the rest of us were paying plenty?
Do you not think they knew that their unions were strong-arming politicians who were dancing to the unions’ tune – and their public sector beneficiaries’ – instead of representing the public at large? Do you really think them that ignorant? Please.
On their behalf, the public sector unions have driven us to the brink of bankruptcy and ever-increasing taxes. If those teachers didn’t know they were feeding off of us grasping what they could for themselves and the rest of us be damned, they’re too ignorant to teach anyone.
Worse, our public schools do a miserable job, and the fact that after 2 years, a “teacher” has a job for life is appalling. Who else gets that? Certainly not many other American’s who work at least as hard in worse conditions.
The schools – and the teachers – do a miserable job. They blame the kids and the parents. Apparently, as U.S. scores fall in comparison to other countries, our kids are just getting stupider. Right.
Private schools have a much better record of achievement while spending less. And spare me the “they exclude trouble children” excuse. Like many who have sent our children to parochial schools, I know it’s not true. And I’m sick of hearing it.
And have you ever – EVER – had anything to do with government agencies? The laziness and sense of entitlement are sickening. I see it around me on a daily basis. Who do you think administers the “waste, fraud and abuse” that people like Obama rail against?
No sir. Those union members have been feeding off the rest of us like parasites for decades. And we get damn little for it. They deserve much less. And I am definitively not in the mood to fund some other family’s lifetime of healthcare and retirement. I’ve got my own to fund.
This article comes up to the issue but finally skirts around it. The only way to reform education and most other government services is to open them up to free competition. Collective bargaining rights for public sector unions (which even FDR was against) must end. The government leviathan must be shrunk.
The issue of fairness is a valid one. A government that bails out AIG and has a revolving door of officials from Goldman Sachs does not have the moral authority to ask police and firemen to pay more for their pension benefits. But the solution is not to cave in again to the public sector unions. The solution is to end all bailouts and corporate welfare laughably relabelled as “investments.” The solution at almost every juncture is not more subsidies, but less, not more government spending but less, not more concentration of power in Washington or even state capitols, but more power to local governments to do what they need to do and their citizens are aching for, get control back from distant bureaucrats and unresponsive unions to the local communities of parents and citizens.
The changes that are needed are indeed revolutionary, because they involve returning American civic society to its founding principles, envisioned by Madison in limited constitutional government, long trampled, scorned and ignored by the “progressive” political ruling class. This is the only way to a nation that is again both free and prosperous.
[Casual invocation of Deity deleted — ed], am I loving this. The Leftist deliberately jacked the national debt through the roof and created the new Obamacare entitlement which everyone knows will make the debt crises exponentially worse. They did this because they were CONVINCED the voters would love the socialism and would demand the debt be paid down through massive tax hikes.
But…holy cow…the voters shellacked the Dems and are demanding the debt be reduced primarily through spending cuts. And the biggest, fattest, greediest hog at the public trough are the public employee unions. The Dems are hoist by their own petard and I’m lovin’ every minute of it.
You reason well. This is the first article that I have read that doesn’t take a partisan approach. I think you are right on target.
If public employees ditched their union dues, they would probably save almost enough to pay for their increased share of retirement and health care.
I’m amazed that with ObamaCare prepared to handle the health care of all its citizens that WI public employees are balking at the Gov’s proposal. The proposal would have the good libs in WI public service pay more. Certainly, O-care will mitigate their pain won’t it? C’mon, folks! Believe in the Hope and Change your union bosses stole your money to enforce.
I share your view that government has to reform to be more competitive and not just sluff off every function the way the libertarians would love to see happen. The trouble is that we have one political complex (Democrats/Unions/Academics/Media) that has prospered under the current system for so long that they’re unadaptive to any change in the social model.
If the unions in Wisconsin freak out like this on such a modest proposal by the governor then I do worry about what’s to follow. The Tea Party in Wisconsin is planning a rally on Saturday, and is calling in for support from all over the nation. I do very sincerely fear that with two opposing activist groups facing each other at Madison we are going to get something very, very ugly as a result.
Some earlier commentator had said that while things seemed bad now it wasn’t as bad as the 60s were. I do think that the shallowness of the current Blue Staters has the potential to make what comes next for us much, much, worse.
The message is clear: Obama and the Dems have chosen sides! They are FOR corrupt and power hungry union bosses, and AGAINST taxpayers and the creators of jobs and wealth. Bye bye Dems and Obama. In your haste to emulate Greece and the French communists, you will soon follow the union bosses into a well deserved oblivion. Chris Christie, Governor Walker and Marco Rubio (to name a few) are the future of this country, not a bunch of fat cat “Boss Tweed” union bosses who leech off the public via state laws that hijack public budgets and compel all workers to pay union dues or be fired.
I am a prosecutor. I am not striking or demonstrating. I hold little in common with teachers.
I earn considerably less than my defense attorney peers in the private sector. I knew that going in. I also know that I possess a contractual obligation for the State to pay me a pension upon retirement. That is the consideration for paying me less than the public sector would have.
I refute that states are broke. They seem to be having a liquidity crisis. However, they own land, goods, and more importantly the licensing mechanism for creating monopolies that leads to the accumulation of land and goods.
This accumulation of wealth and power has crippled the private sector. The “public interest” has made private interests outside of corporate interests seem almost silly. And now in the name of “public interest” there are apologists coming out of the wood work calling for states to shirk their contractual obligations to millions of private citizens who have worked to accomplish the states’ varied purposes?
This is more government irresponsibility. Whether going forward the public wants its kids to be publicly educated or its criminals prosecuted is one thing. Taking my property (my pension) without due process for work already performed is another. Lay me off, cut my pay, eliminate my healthcare insurance – but I own my pension. It is my property. I will defend it. If you can’t collect enough taxes to pay it, I’ll take 200 acres of what used to be my favorite State park.
In short, if the state obviates its legal obligations to its citizens, its citizens have no moral obligation to any loyalty, allegiance or sympathy to it.
@steve smith: I agree that contracts already made should be honored and would not want states to repudiate existing obligations. The question is what to do going forward and, unfortunately, the unrealistic promises (and the failure to make adequate provision for them) made in the past will make the reforms more painful. Youth will be sacrificed to pay age.
The point of leverage in the economy isn’t the “friction” (ie red tape and guild restrictions) but the slack in the economy: the underutilized productive capacity which if utilized would add several points to GDP growth.
Two of the biggest sources of slack are big corporate cash holdings– capital on the sidelines– and the astonishing underperformance of the 30-40% of our students who come from impoverished homes that lack parents who care about education. McKinsey estimated recently that if these children’s performance were to be brought up merely to the US norm, the resulting increase in productivity would generate an extra 2-3% in US GDP growth.
As to the trillions in cash hoards held by the likes of Cisco, Microsoft, Oracle, Google, Apple etc– and the hundreds of billions parked in overseas subsidiaries– we need to immediately reconfigure our tax laws to get a large chunk of this money off the sidelines (ie, out of Treasurys) and into productive capacity in the US: new hires, new plant and equipment, new business lines altogether.
It’s about the slack, not the friction.
Well reasoned, insightful and non partisan.
My only quibble is comparing the public sector workers to “bankers and business executives.”
Wouldn’t it be more appropriate to compare them to the countless “regular” workers in the private sector who have either lost their jobs, are working at a reduced rate, or are looking over their shoulders in fear of losing their positions now?
I was laid off about two years ago. My pay rate was cut by 100%. I contracted myself out and after about a year took a direct position with a company paying about 2/3 of what I had made previously.
From there I moved on to my present position where I make just under 90% of what I made previously, but I have a clear view of catching up and even getting ahead of the curve.
This has been due to my own industry; not some special interest group lobbying on my behalf.
I don’t think anyone thinks that teachers should not be paid well. They should be paid a fair wage but there also has to be more help from parents and school districts to promote discipline. Not this garbage they do now which ruins the environment for the kids who want to learn.
I also think that the teachers will lose just about every argument when they say they should not have to pay a bit more of THIER OWN health care premiums.
Good article. I agree with most it.
One nit-pick. I suggest that not all government workers share in the goals and means to achieve the goals of the Democrat party/union leadership. A member of my family worked in the public sector for the State of California for more than 40 years. He has outstanding retirement and medical benefits that will accrue to his wife if she is alive when he passes. He is a conservative in most issues. He was forced to be a member of the California civil service employees union. He was forced to pay union dues out of every paycheck. He had little or no say how union bosses spent his dues money. He cared about his bottom line and accepted, what to him, was a good job with decent pay and great benefits. The tradeoff was forced membership in a left leaning organization. He has told me many stories of state employees abusing the system for personal gain, cheating on overtime hours, doing poor work, lack of oversight from higher ups, and political correctness run amok. He was a conscientious, hard working man who valued his job and did his best. He tried to set an example for employees with less seniority.
I wager many folks in Wisconsin are in a similar situation. I have no first hand knowledge, but I suggest many Wisconsin teachers are disgusted by what they see. But a job is a job.
My point is don’t lump all civil service folks into the same group.
The single best thing that could be done with regards to education would be to destroy the teachers union. They ARE the problem.
As a libertarian leaning, Tea Party sympathizing, liberty loving, free-market conservative, I found this article to be near dead on.
The Democrat/government union/entitlement cabal has voted themselves unsustainable benefits and regulated the US to the point of non-competitiveness.
We don’t need to race to the bottom to compete with the likes of the Chinese.
Americans make up less the 5% of the world’s population and the individual liberty protected by our Constitution enabled us to build an economy that is still larger than China’s and Japan’s combined; the next two largest.
It is barriers created by liberal politicians of both parties that are strangling us.
The housing bubble was caused by government forcing lenders to make risky loans to unqualified borrowers in the name of “fairness”; it was not “greed” or “deregulation”.
Government policies are limiting growth, causing shortages of food and energy (Obama’s drilling moratorium), and turning California’s farmland in the Central Valley into a dust bowl to save some little critter at the expense of real people.
Americans need to freed from supporting the unaffordable, parasitic, and non-producing public sector so we can compete and win economically.
To begin with, the Walker bill specifically excludes police and fire fighters so you are wrong in lumping them together with the teachers.Apart from that, you are right, of course, being held in thrall to the public service unions as well as the officially aggrieved victims entitlement society has rendered the Democratic Party the official opposition which is allowed to govern every generation for a term or two.Where it has governed longer,Wisconsin and Michigan for example,their financial houses are no better than Greece
Anti-Trust the Labor Gangs: Why should they get special monopoly privileges and not us? What makes them so special?
I disagree that private sector unions should retain their monopoly privileges. I also disagree that any contracts gained through the use of unjustified monopoly privileges, are binding on the Victims, whether it’s the US taxpayer, private stockholders, or employers. The courts should revisit all such contracts and make sure they conform to standard private sector contracts, that would be what’s just.
The un-American [unpleasant persons] are just doing what all monopolies always do, Killing the Goose that lays the Golden eggs. Monopolies are as mindless as Bacteria, who when they find a food source simply gorge themselves until the food is all consumed, and then they die. Better to [word that could be interpreted as a call to inflict physical harm on people deleted –ed] the monopolies first, before they kill the Goose (taxpayers).
Regarding Steve Smith’s well-reasoned post:
“Taking my property (my pension) without due process for work already performed is another. Lay me off, cut my pay, eliminate my healthcare insurance – but I own my pension. It is my property. I will defend it.”
I believe the creditors (stockholders) of GM and Chrysler felt the same way about due process and the financial contracts they owned. Local dealers had that opinion, too, just before their business agreements were voided.
The Obama Administration cared more about the unions being made whole.
What you left out, conveniently or otherwise, is that Wisconsin’s governor exempted two public service unions , namely police and firefighters from his union busting plan. Why? Because they are heavy political supporters of his. So, in reality the “it’s good for the country,state, whatever” mantra only applies to those on a given pols “enemies” list. Really curious how you square that in your argument.
So we have truant treachers and law-breaking lawmakers — who sanctimoniously assert that their selfish and illegal acts are all “for the children” who are being denied an education while the illegal hijinks continue.
I wish only that the governor of Wisconsin had the authority to borrow a page from Ronald Reagan’s book on how he handled the striking air traffic controllers.
Mr. Mead is entirely correct in stating any any solution to our present mess requires that: “The culture of bureaucratic legalism will have to disappear.”
Enforcing the culture of bureaucratic legalism is my day job as a California trial court research attorney, and I was a litigator in private practice before then. I’ve been a civil litigator for my entire 34-year adult career.
I have seen this coming on bit by bit since I was a 1967-71 undergraduate at UC Santa Cruz. It has grown by accretion as Congress and the state legislatures have piled on bureaucratic requirement after requirement until the whole stinking edifice has started to fall down.
I have seen, in my private and public practice of law, how the California legislature has made family law so complexly impenetrable and credential-driven that attorneys who practice in have had to increase their fees beyond the ability of all but the rich to pay. This swamped California state courts with ordinary people trying to represent themselves (the word of art is: “in propria persona”) in marriage dissolutions, child custody disputes, etc. California trial courts have in consequence had to hire large staffs, at taxpayer expense, just to fill out family law forms (which of course are of federal Internal Revenue tax regulation complexity).
The same has happened over and over again in innumerable ways. One example I described concerning charter schools a few weeks ago, in another thread on Mr. Mead’s blog, lies here:
“… Few of these feel-good tasks, individually, involve more than a trivial expense but, in vast numbers over a 40-year period, their totality requires armies of administrators beavering away on utter crap which eats budgets and significantly detracts from the time and energy teachers can spend on instruction …”
Ratio 23 million:280 million identifies magnitude of present social/economic arrangements. Americans conscious of idealism of our creed, despite painful reworking of governmental contractual obligations, cannot cavalierly dismissed transformation in our mist and the need for honest engagement by all “interest.”
I am a libertarian-leaning, tea-party supporting, non-union member too. I am just a little worried that there is a danger of the baby being thrown out with the bath water. I’m not hearing lately an argument for a smaller, more Constitutional government. I’m hearing calls for no government at all.
A contractual obligation (a pension) is a true entitlement – that is unless you want a system were contracts are meaningless. If that is the case, you are no libertarian. The purpose of a government is to enforce contracts. Even the Constitution itself bars state laws that impair the obligation of contracts.
If confiscatory schemes like pension raiding are going to rule the day, we need to look to where and who has hoarded wealth over the past 40 years. Its not low level government employees and private entrepreneurs. Its corporations. You can’t get much blood from a government employee turnip. There are more robust veins elsewhere.
There is nothing illegal or unconstitutional in dissolving corporate charters and having their property escheat to the state. That is where the real fix will come into play. Likewise, there is nothing constitutional or within the public policy of allowing our national wealth to be transferred to international corporations. That is unless you are an absolute capitalist first and merely an American second. Borders matter.
If you see the most pressing issue of the day as that of a few tens of thousands of public employees demanding the government uphold its end of its bargain then maybe I need to turn in my libertarian card, or cash in my stocks on the German-New York stock exchange. No, crony capitalism is a far bigger deal than paying Ms. Edna schoolmarm’s grocery bill after a life time of public service. She gave value. The corporate cronies haven’t.
IMO the means of destroying the “culture of bureaucratic legalism” must include the termination of federal income tax deductions for state & local taxes, as those operate as federal tax subsidies of public employee unions.
Many have already recognized how the home mortgage interest deduction led to the market distortions which caused our current financial mess and economic depression.
The federal tax deductions for state and local property taxes have had a far worse effect. Those foster the “culture of bureaucratic legalism” which Mr. Mead decries.
I live in California with one of the country’s highest state income tax rates (9.55%, and it kicks in at the lowest income level of any state. I can deduct all state income and local real property taxes I pay from my taxable federal income. This is a federal tax subsidy of California’s bloated state government, which is basically controlled by public employee unions who collect union dues which they generously share with deserving California candidates for elective office, who in office vote for laws needing ever greater ranks of increasingly well compensated public employees to enforce, etc.
The federal income tax deductions for state and local taxes operate as subsidies by red states of blue states dominated by public employee unions.
I urge that the Republican Party adopt a platform of terminating these tax subsidies. This will directly and immediately benefit red states, while indirectly and eventually help blue states escape their domination by public employee unions.
States cannot bankrupt. There is no constitutional provision for it. States are not “bankrupt.” They are flush. They just refuse to raise revenues from their citizens. As long as people can buy automatic garage door openers and eat at restaurants, I demand my pension. I earned it. Citizens just no longer want to pay for past and future services from government employees. I understand that. So fire us all. I’m OK with that. But I will not be treated like an American Indian. I am owed an I owe. When I am not paid, I will not pay. It really is that simple.
You think a government can’t do whatever it wants, when it sees fit? Why are you different from GM bondholders, who had legal claim on GM assets? Why are you different from GM dealers, who had solvent businesses and legal contracts with GM? If you think the government can’t take your pension away, I suggest you know neither history nor the law.
Thank you Dr. Meade.
I don’t who you are but I smell a corporate ideologue- someone who inevitably tries to curve reality to fit their mindset and must convince the sheeple that they have it all figured out. What is telling is what you fail to discuss, which for me is the size of the Grand Canyon. While I don’t disagree with some of your analysis the pure [nonsense –ed] starts with this paragraph-
“Given the realities of global economic competition and technological change, there are three basic strategies from which Americans will have to choose as we try to keep our economy humming, our wages high, our markets open and our country solvent.”
It is pure [nonsense] because of what you fail to mention. Let me explain.
The reality in Madison is that the new governor is beholden to his corporate donors and puppetmasters and just cut a tax deal with them to actually reduce the state government income from corporations. Gov. Walker manufactured this ” budget crisis”. Please read http://tpmdc.talkingpointsmemo.com/2011/02/dems-closed-much-larger-budget-shortfall-in-wisconsin-without-destroying-worker-rights.php?ref=fpblg and see just how bogus this whole thing is.
The fact that you fail to even mention this really tells the story. Go back and do your homework and write an honest column (for a change of pace). Rebuplicans Vs Democrats is so beside the point- they are both beholden to their corporate masters. It’s the people vs. corporate oligarchs that tells the real story and that’s something Mr. Mead would really not like to discuss.
The episode in Madison is a test case to see if the political/corporate oligarchy can reduce the middle class back to a serf like existence. If it can push this bill through in Wisconsin then many states could follow and that would be a good thing for people like Mr. Mead. After all that would be more money in corporate coffers and that’s what’s good for America. Isn’t that right Mr. Mead?
Like most posters, I have to agree, the article is good enough on disciption, incoherent on remedy.
“The Democratic Party shouldn’t be fighting a doomed and desperate retreat to save what is left of blue-model America.” Well, they are, so just accept it. And yes, its doomed and desperate, but that doesn’t that the fight can’t be prolonged and bitter.
Just face reality; we are poorer today than we were yesterday. If we keep doing what we are doing, we will be poorer tomorrow than we are today.
Are you even paying attention Mr. Mead? Wisconsin has a Republican Governor, State Senate, State Assembly, a new Republican US Senator and more Republican US Congressional Representatives than Democrat. Wisconsin is not a blue state. It is the color of our beloved Badgers- RED. Sure, Madison and Milwaukee remain liberal bastions but as far as the rest of the state is concerned, Governor Walker is doing EXACTLY what he was elected to do.
I am completely clear on the fact that our government has, and can continue to shirk its obligations. It can refuse to pay my pension.
Here is how I am different than a GM pensioner or stockholder:
GM folks fell victim to a government-corporate shell game wherein the oligarchs held all the bargaining power through the threat of bankruptcy. GM shareholders had no expectation of continued stock value because shareholders are not entitled to profits or even the return on their investment. They slept at the wheel while GM ran its profit making machine into the ground. They got what they deserve. Nothing.
Unlike GM, states cannot legally default on their obligations. They hold many times more property than their meager legal obligations – highways, hospitals, golf courses, parks, etc. They have no bankruptcy hammer. If they illegally withhold from paying their lawful debts, I will not feel obligated to resort to unlawful activities as well.
In short, I am uniquely positioned to know that taxpayers aren’t tough on crime. They will not agree to build enough prisons to house the violent and larcenous. They will not take vacation days away from their cubicles to come and actually testify in court. They think “government employees” can snap their fingers and magically keep felons in jail.
No, I am not like GM employees. The government can pay my pension or for my prison sentence – and I know how unwilling corporate representatives are to actually follow through by showing up in court at trials and hearings.
Mr. Dave McAlpine (#8) states, “They are as guilty of greed as were Bernie Madoff’s victims. Do you believe that they did not know that while they pay nothing into their retirement and health insurance accounts, the rest of us were paying plenty?”
I’d be interested to know from whence he derived this information. I know firsthand that many public sector employees (most of whom will never be entitled to social security benefits) are paying into their pension accounts nearly twice what the private sector employees are required to contribute to social security.
These same people also are paying 25% of the cost of their health-care plans. This is probably not as much as most private sector employees must pay, but I know that it is more than some pay.
Other than this single point, there are many points in his post with which I find myself in agreement.
re: corporate coffers. Interestingly, last time I looked the companies that employ half the people in the U.S. (small business, main street, not Wall Street) were suffering in every dimension. Corporations are nothing but the citizen and their enterprise. To punish one is to punish the other.
There is no more money. We’ve borrowed all we can and more, and are depending on our wealthy individuals and their enterprise (and their children’s children) to pay the bills we’ve run up. Time for us to man up and take charge of this part of our lives that we’ve been ignoring too long. The local community can look out after all these needs where families cannot, or tragedy leaves someone in the care of charity. No need to depend on political promises made at the Federal (and even State) level. Leave us alone (and leave us our money) and we’ll take care of our own (and even others less fortunate).
I am not exactly glad this is happening; the teachers, firefighters and ordinary state and local government workers who are going to be paying much more for their health care and earning much less generous pensions are regular Americans playing by the rules as they found them.
As are the people in the private sector that are earning much less ….and must support those those who will still make more them.
Entitlement Mindset meets reality.
This is but the opening chapter. The Nanny State is bankrupt.
An organization that is able to wield massive political contributions and voting block that then enters into collective bargaining with the individual they elected smacks of unbridled conflict of interest. This has to stop.
Anthony @30 meant dismiss (not dismissed) and “interests” (not interest).
Wages are going down all across America. This is but one symptom of the underlying problem.
Mead writes: “What America really needs to do to escape [reader alert: classical reference ahead] the Scylla of of a blue model death spiral and the Charybdis of a global ‘race to the bottom,’ is to reduce the costs of doing business in this country and make both capital and labor more attractive by reducing the “friction” in our system.”
You make me want to cry.
Dear God it isn’t “friction” but the laws of supply and demand that are causing the problem. Three — no, make that four — policies to address it:
1. A shorter standard work week.
2. An immigration pause.
3. Tariffs to reestablish our balance of trade.
4. A tax on capital to subsidize wages (until such time as wages have equalized around the world).
Sermons and hand-wringing won’t do the trick. Neither will education apart from education about the true source of the problem. Sorry, Mead, you need to rethink.
Your a rasist!
This is a fine article on the social upheaval that is coming in government and the social change that will come from it. Yes, this has been rippling through the private sector for years, but the revolution will only come from government unions because of the massive change in big places all at once. Nobody really notices when a company does it, because they are usually small groups of employees in many places. Wisconsin is the tip of the iceberg. As a spouse of a public service employee I have skin in the game. I have been telling my wife for years that this is coming. It already happened to me. At the end of the day government employees can be no different.
Steve Smith wrote: “States cannot bankrupt. There is no constitutional provision for it. States are not “bankrupt.” They are flush. They just refuse to raise revenues from their citizens. As long as people can buy automatic garage door openers and eat at restaurants, I demand my pension. I earned it.”
Steve, with an attitude like that I just know people are going to want to eat beans and weanies and leave their car outside to pay more taxes for your pension.
Perhaps a little less American Idol, Academy Awards, general consumerist focus? Old nostrums ad nauseam ad(age)s such as best things in life being free? Capitalist patriarchy scientific reductionism is past best b4 date in post-modernism.
Hurray! Mr. Mead gets it and actually provides a viable option to the way forward. Public worker unions that protect incompetent employees (like teachers) have no proper place in our society, or the competitive world we live in.
This article comes up to the issue but finally skirts around it.
Because WRM’s brain knows Liberalism 4.0 is over, but his heart hates to see it go.
States are not “bankrupt.” They are flush. They just refuse to raise revenues from their citizens. As long as people can buy automatic garage door openers and eat at restaurants, I demand my pension. I earned it.
ME ME ME ME. Talk about somebody who doesn’t understand the suffering of the 25% of mortgagees who are underwater. Or the 17% of Americans who are unemployed. Or the rest of us who have seen our 401(k)’s plummet. In case you haven’t noticed it, Mr. Smith, Esq. Lots of people are suffering. Many because someone on the other side of a contract was unable to uphold their side of the bargain. Talk to somebody from Beth Steel or the PennCentral or Enron. Now it’s your turn.
And those states will be out of tax base when the home and business owners get tired of paying for you and move to another state. Or country. Costa Rico’s looking pretty good for retirement, especially as I don’t really expect a Social Security check.
So stop your whining and begin to prepare for Liberalism 5.0 like everybody else. Because there aren’t a whole lot of people better off than you and there are a whole lot far worse off.
Thank you for this article.
I would like to focus on your points about information technology.
Through IT and the webs I have learned more than I would have thought possible. This article and the comments
( thank you all too) are just one of 1000s of examples that convince me that this is the best learning system.
I think that the schools as well as the teachers can be eliminated. By definition a teacher can only be average and this can no longer be accepted as inevitable.
Through computer assisted distance education all people can have a much better and richer life. Every student will be instructed by our best people as I am every day.
I have had 17 years of formal education and a great deal of employment related training and read many books.
This package is about the “best class” you could ever hoe for on these events!
Bravo everybody and let us move ahead here.
@steve smith and Walter Russell Mead should both know that a common law principal of contract is to be enforceable the consideration needs to be equitable to both parties and never the result of coercion. It appears to me that many of the present pension agreements may not meet this test.
If Walker has any [testosterone producing glands –ed] he has easy and good comebacks.
1. Issue a proclamation declaring that any senators who are not back in their chambers by sundown have abandoned their offices, which will thereupon be deemed to be vacated.
2. If they don’t show up, issue writs of election for their vacant seats.
3. Fire their staffs, move their stuff out of the capitol, change the keys to their offices, and void their parking passes.
4. Pull his proposed legislation and replace it with a bill that bans unionization for public employees, voids any collective bargaining agreements with public employee unions, and terminates the employment of any public employee who goes on strike for cause and with a loss of benefits and seniority.
5. Smoke a big cigar.
@steve smith; sorry chum, while you are owed, you do not own; you fell a victim to a slick sale of a Ponzi scheme; now the scheme run out of suckers and, unfortunately for you, you are left holding the bag. You have a problem, talk to the people that sold you the empty, fraudulent promises – your union leaders and their corporatist/socialist patrons in the state legislatures.
The forces of freedom have the commies on the run. We destroyed the Soviet Union, surely we can destroy these homegrown Stalinists with much less effort. Government unions must be crushed, ruthlessly. They are a huge source of money for the Communist party politicians who run Washington. Every one of these miserable rats should be summarily fired and replaced by people who honor freedom and the rule of law.
“Private sector workers have no way to influence the management of their employers except through union movements. Public sector workers vote, and can organize and support political organizations aimed at influencing public opinion… Unlike private sector workers, government employees as citizens can effectively influence their conditions of employment by lobbying elected officials. They don’t need a second bite at the apple.”
Is voting the only form of collective bargaining that public sector employees should enjoy? Is union activity per se a “second bite at the apple”?
Your premises here are shoddy, and your conclusions are ill-formed.
Your post is taking on quite the collectivist tone. Let me see if I get it straight:
Many people made bad loans for property that was over-valued. Many people didn’t. Because of that, people who made good decisions are supposed to suffer along with the the ones who were greedy and/or foolish.
Moreover, because I didn’t work as a high paid attorney sinking away bonuses, stock splits, corporate cars, VIP tickets at Super Bowls, etc. at Enron, Beth Steel or another defunct corporation, despite my years of low pay in comparison for life risking work battling organized crime, I too should lose my pension because everyone else is having a hard time? Heck I might as well have lived in Cuba. At least there is no hiding the collectivism there.
A point will come when I may have to switch sides and use the experience I’ve gained putting thugs behind bars to battle with prosecutors making minimum wage. Crooks and corporations have money. Market forces are market forces. I won’t like it, but maybe I’ll need to do it. If blue-bloods don’t value public service, maybe crips and bloods will.
Again -I’m no protester, organizer, union member. I just thought law enforcement would be a valuable career. I guess I was wrong.
And good luck in Costa Rica. I might have to go too. Taxpayers, all 50 of them, won’t fund prisons. We’re going to have more crooks than cops on the streets before too long. I hope Costa Rica’s immigration policy is as laughable as ours. Maybe the Republican’s won’t fence us in and we can swim the Rio Grande on the way out.
Walter, you are part of the problem and not part of the solution. Wisconsinites need to talk rather than shout at each other.
Sit back and relax and breathe deeply.
I don’t know why more states don’t have a defined contribution (as opposed to defined benefit) retirement system. I’m a state employee in Nevada and I have a defined contribution plan. I like the fact that I have control (and ownership) of my retirement account but even more the fact that I won’t be a burden on younger generations. If I need charity I’ll go to my church.
I would agree that no contract that is the product of coercion is enforceable. I coerced no one to hire me.
I disagree with any sentiment that to be enforceable a contract must have “equitable” consideration. The law of contract is clear, “a peppercorn will do.”
Contracts are viewed at the time of the making, not the afterward the performance is rendered. If years of service in an unpredictable market isn’t consideration, I’m not sure what is. In hindsight, the government made a bad bargain. I’ve lived with my bad bargains. I expect the government to live with its. Its called capitalism. Without the honor of making good on a bad bet no one plays.
Amen, Brother (or Sister)
@ John Herlick
I understand my attitude isn’t pretty. I know it won’t make anyone want to “pay for my pension.” I may not want to pay my bills, either. But I do it.
I’m not going to beg for what I am owed. I know that no one is paid what they are worth, they are paid what they negotiate. I negotiated what now proves to be a good deal. It wasn’t always such a good deal. I didn’t buy cigarette boats in Miami like trial lawyers. I didn’t represent heartless insurance companies and roll in year end bonuses like big defense firms did over the past twenty years. I fought against thieves, thugs, murderers and child rapists for low pay, a lot of vacation time and a pension.
The public will pay me or it will have proven to passed me a bad check like the defendants I have prosecuted for doing the same.
Again – I am no union member, protester or demonstrator. I won’t hold a sign if I’m shafted. I’ll hold something else. Thank goodness for the 2nd Amendment.
P.S. I got a 401k too. You guys want to confiscate that?
“This is more government irresponsibility. Whether going forward the public wants its kids to be publicly educated or its criminals prosecuted is one thing. Taking my property (my pension) without due process for work already performed is another. Lay me off, cut my pay, eliminate my healthcare insurance – but I own my pension. It is my property. I will defend it. If you can’t collect enough taxes to pay it, I’ll take 200 acres of what used to be my favorite State park.”
Welcome to the real world, Steve…and the reality those of us in the private sector have lived with for decades in many cases.
Back in the early 1990s, my company sent a memo to all of us announcing that they’d be converting us all to a defined contribution retirement/pension plan from the defined benefit plan that we’d had since I started there in the early 80s.
I knew why they were doing it — and although I wasn’t happy, I understood this is what they needed to do in order to stay profitable. I’d seen manufacturing firms and airlines struggle and fail because they couldn’t afford to pay out the benefits they’d promised their union workers — and I did not want my company to suffer the same fate.
Well, here I am, nearly 2 decades later, about ready to retire. The company has survived and I have a pension that isn’t quite as cushy as I’d hoped, but one I can live with.
Half a loaf is better than no loaf.
Yes, it was a bit of a shock to lose my defined benefit plan. But in retrospect, it would have been a lot more shocking if the company had folded under the weight of overpromised and unsustainable benefits for their employees and retirees, leaving us with nothing.
I understand how you feel, Steve, but what worked in the economic environment of 1962 is simply and wholly impractical in 2011.
On taking your pension in state land: Sue ’em if you think you can win. Best of luck to you.
First, I would like to address Steve Smith: I wholeheartedly agree with the points you have made. I am also an attorney working for a state agency (formerly worked in the real estate/title insurance industry before the fraud and corruption tolerated for so long in this area, as well as in the mortgage financing and appraisal areas, brought about the implosion and collapse of the real estate market and all of its related disiplines, severely damaging our economy).
Turning to a different issue: I think that many proponents of abolishing public sector unions fail to recognize something very important. The ability of civil servants to unionize should not be confused with a government’s abrogation of it’s obligation to acknowledge and make good on pensions which have already been earned and vested (query – why is there such outrage over proposals to reform social security (a benefit that most civil servants are not entitled to receive), while those same indivduals see nothing wrong with eliminating pension benefits which have already been earned by public sector employees). If governments wish to effect reform, let them move forward on a proactive basis. Leave existing obligations in place. Additionally, not all civil servants’ pensions are the result of union membership. Should these non-union employees also have their pension benefits wiped out? What could possibly be the justification for such an action?
Very well written. I’m going to add you to my readable insightful list.
Of course myself I’m not as nice to the Public workers consider me a dissatisfied customer how would like to know where I can get a refund!
I liked it. We need to figure out a way forward. Or America wont be America any more not today not tomorrow but in the future
“They are tied to the 22.6 million Americans who have government jobs — and cannot respond creatively and thoughtfully to the needs of the 280 million who don’t.”
The employment poll is NOT 300 million. Please correct your numbers as they are off by more that 100 million.
The text refers to population, not those holding jobs.
I understand where you are coming from, but its really an apples to oranges comparison. The state can’t go out of business. In fact, not paying its bills makes it more susceptible to failure than just ponying up what it owes. Again, if the public doesn’t want to pay more taxes I understand that. I don’t want to either. Just give me a right to collect a mile’s worth of tolls on the New Jersey Turnpike instead of a monthly pension payment. Heck, I’ll take the right to collect fees from those guys that hunt the public’s wildlife. I would even settle for a fee for every airplane that takes off from my local airport. The state has assets – many more than I do. If anyone can take a loss – its the state. Not me.
I do not accept the precept that collecting taxes is bad for an economy. That is the system Jefferson and Madison set up. Its only bad for an economy controlled by corporations with large monopolies on vast segments of that economy and no allegiance to America. If big dollar capitalists want to move to Costa Rica – fine – good riddance. Our country wasn’t made great because of a huge influx of foreign capital or of the loss of Tory capital during the Revolution. America became great because it was interested in freedom and responsibility. We have a responsibility to uphold public obligations and debt. We don’t have to enter into any more of those obligations but ignoring ones we already have will create anarchy.
To everyone, it does not matter who is right, who is owed, who can pay or who can’t. WE are broke. Almost all of the states, the people here, the country, etc. There is no way to pay your pension Steve. Sure in the short term we can tax more, but the taxees are broke too. Even if you take all the money from those rich guys at the top, bankers, hedge fun mangers, etc, you could not pay off the trillions we owe. I have no job, and no matter what the contract says, I cannot pay the credit card, since there is no money. Once we all understand where we are, we can move forward. That 60% of bussiness who do not pay taxes, 50% of them are not going to be there in two more years, what more can you take from them, the other half, can’t pay off the debt that was wracked up. Sorry
I’m sure people are tired of seeing my posts. I never post this many on any topic. I apologize. This will be my last on this thread. It is a question.
If Wisconsin public employees entered into a contract that they would receive x amount of dollars per month from a pension after y numbers of years of service, isn’t asking those employees who are already vested (fulfilled their contractual obligations) to pay into their pension the same as asking them to pay their own salary?
Good night. I look forward to thoughtful, unemotional responses in the morning.
@ steve smith
A public pension is not your property. Sorry, but courts at both the federal and state level have consistently ruled that this is not the case.
As far as your veiled threats to resort to gun violence if your public pension is reduced, your attitude evidences the demented public sector mentality that we in the private sector so deeply despise. But go ahead, shoot away – with the skill and equipment of today’s law enforcement, it will just wind up that we will have one less public pension to pay.
Many of the comments are essentially arguing over whose ox is gored, while the real question is whether there will be there an ox at all. The current bureaucratic state is the natural result of trying to force the world as it exists toward a utopian goal. Its almost as if we have attempted to suspend the laws of economics by legislative decree. This has led to stifling of private business in favor of re-directing society toward state sanctioned investments. Things are out of balance. If we persist, the accumulation of debts (and the imbalances they represent) will eventually lead to social unrest on a large scale.
[Expletive deleted] all this silly [unpleasant substance — ed] about the poor union slobs having to pay more for their own health premiums and pensions. WE ALL DO IT! SO [expletive deleted — ed] YOU!
What a bunch hogwash. The great American job machine went down the drain when we went from an economy that produced things to an economy dominated by speculation. High finance has distorted the American economy. It has ruined housing, the job market and now a decent retirement. For 3 decades we have listened to the people like the author who want a more business friendly economy of less unions, less generous worker benefits and lower taxes. All it has produced is an impoverished middle class and increasing inequality.
I voted Dem A’s a young man. I supported the compassionate causes of civil rights, and equality of opportunity. I believe in these things today but do not vote Dem any longer.
The Dems are too beholden to their voting base which in most cases means these union bosses and the unfortunate workers who have bought their hollow promises. They can no longer govern and see the future and what is needed. They can no longer do the right thing for the state or county as a whole. They are owned by their voters.
The writer gets it. The old model is dead. The world has moved on. The “progressives” are the entrenched. Bankrupt of new ideas and reduced to playing games and tricks to frustrate the will of the electorate.
This is at best a short term game and will only serve to drive more true progressives like myself to the other side.
Finally, the president promised Change. Really! Wish he had the stones to walk the talk he so eloquently delivers. Disappointing for so many who voted for a leader that would usher in the change we need!
Some good points here, but Mr. Mead should rethink his opposition to a more common sense trade policy. The sky won’t fall if we engage in some rational, limited protectionism, and we’d be foolish not to do so, in response to the mercantilism of China and other trading partners.
What Mead and other pundits forget is that the axiomatic acceptance of unrestrained free trade (on our part, that is) is an artifact of the post-World War II era, and it was a policy we engaged in for geopolitical reasons (to bind allies to us) and not for economic reasons. From America’s founding to the middle of the last century, we were protectionist (the main objectors were Southern plantation owners, who didn’t have to worry about wage arbitrage since they employed slave labor).
THE WEALTHY HAVE STOLEN America’s Wealth, And Now You Wage Guys Can Take It And Like It, hey?
Lovely – from a recent NPR story, but similar statistics are all over the web:
“To get a sense of how the very wealthy have prospered over the past generation, consider this: The share of total income going to the top-earning 1 percent of Americans went from 8 percent in 1980 to 16 percent in 2004.”*
Mr. Mead makes a Complicated Case whose Complexities Obscure a fundamental omission of Fact which turns the whole Assay into Nonsense: by any measure, over the last three decades the Greedy Wealthy of America have Transformed your Stock Markets into (often Government Backed) Casinos so Rife with Corrupt Advantages that the Small Investor is Routinely Defrauded; deliberately Raided your Pension Funds by selling you Mortgage Funds they Knew to be Losers; and with Billions of Dollars in Lobbying and Political Contributions, wholly Bought Your Legislators and Poltical System; and now Mr. Mead, in the era of Gulf Oil Well Blowouts and the Most Grevious Chicanery Amongst The Banks, Insurers, and every other Commercial Entity (Enron to AIG, who can remember them all) tells us we need do with Fewer Regulators, Cops and Teachers; as the American Population by Every Measure of Health and Prosperity Ranks Lowest amongst the Industrialized Nations.
Reenact Glass Steagal; Outlaw Fraudulent, Complicated Scams such as CDOs; Tax the Obscenely Wealthy out of Existence – before they Destroy America – as George Carlin said, this is a Class War, and they are winning: think about it, on Wall Street last year some Twenty Four Men were paid more than One Billion Each – for a Single Year’s Labor, taxed at half the rate a Working Man Pays!
This is life on The Wrong Side Of The Mirror; and Mr. Mead is Whistling Operatic Complexities in the Dark; the Protests in Madison are only the Beginning; and the Rich will, finally, have their Days of Reckoning.
Personally, I can’t wait.
The Detective In The Mirror
Nicely written but essentially an empty argument that a political problem can be solved by a set of technical fixes. They can help but they are not going to be enough. The argument about the difference between the public and private sector unions sounds good in theory, but the simple fact that public sector workers actually receive lower compensation than their equivalents in the private sector demonstrates once again that theories that sound good do not necessarily have any factual basis.
We have the need for those who “think outside the box” (as Mr. Mead so often does) and one of the greatest at doing this was Buckminster Fuller who said: “You may very appropriately want to ask me how we are going to resolve the ever-acceleratingly dangerous impasse of world-opposed politicians and ideological dogmas. I answer, it will be resolved by the computer.”(FB, Twitter & WikiLeaks are beginning this trend!)
He also said: “While no politician or political system can ever afford to yield understandably and enthusiastically to their adversaries and opposers, all politicians can and will yield enthusiastically to the computers safe flight-controlling capabilities in bringing all of humanity in for a happy landing.”
And finally: “Take the initiative. Go to work, and above all co-operate and don’t hold back on one another or try to gain at the expense of another. Any success in such lopsidedness will be increasingly short-lived. These are the synergetic rules that evolution is employing and trying to make clear to us.”
And so the tools we need to bring in a better age are here before us or currently under development. The Gordian Knot to be unraveled is the way people conceive of themselves and their relationship to the universe!
To put the situation of Wisconsin government employees into perspective, here’s a partial listing of the benefits federal employees of the Department of State (specifically, Foreign Service Officers, of whom I am one) working overseas are getting/have received:
•In 2009, an 8% pay raise, despite the recession.
•In 2010, another 8% pay raise, despite the still rotten economy.
•Up to 26 days paid regular vacation each year.
•An additional 12 days vacation each year, but these days must be spent within the U.S.
•All eleven federal holidays off.
•13 sick days a year.
•All the foreign holidays of the country in which FSO is stationed in not covered by American holidays off (but only up to a maximum of nine).
•Potential retirement at age 50 with a pension of around $45,000 per year for life.
•Kids often going to some of the best private schools available with their tuition fully paid for by the U.S. government (this can amount to more than $20,000 per kid per year).
•Plus excellent health care benefits at very low personal cost.
Overall, it’s a great benefit package negotiated by my union which I enjoy immensely, though it does amaze me that the taxpayers are willing to foot the bill for all of this. But, people keep electing politicians who are willing to go along with it, so that’s what it is, and I’m staying on this gravy train!
Everyone understands things must change. It’s the way it’s being done that is upsetting people. Gov. Walker approached this like a tyrant, a dictator. He proposed the bill on Friday afternoon and wanted it made law on Monday. Ridiculous! Anyone knows if you are going to get people to understand and jump on board any program or major change, you have to talk to them like they matter, work together. He has caused his own problems by the simple way he approached it. He made people feel like they did not matter, and he tore at the foundation of many of their lives. He buried so many things in this bill to get it through. He should have at least treated the WI people with the respect they deserve and taken the time to discuss all of this. This is what the democratic senators are mad about. I will go rally today in Madison. Not because I don’t think WI needs to make changes, because we do. But because this is not a dictatorship and the people need to let government know we do have choices and we do have some say in how our lives are to be determined. We control their jobs as much as they control ours. Just to see the amount of people in this state, no matter what party, what religion, friend or foe, all stick together through this in these numbers is amazing. It’s history making. And honestly in this day and age, I am proud that the people of WI are standing up for something – not just being passive and sitting on the fence with no opinions and letting governement make all of their choices for them. We stand united.
Thank you Professor Mead for fostering a much needed discssion. Whatever the merits of the case, I don’t believe the middle class will support the move to a new social model until those at the top asked to similarly sacrifice. Bailed out bankers are as much recipients of government largess as are those receiving middle class entitlements. When the wealthy won’t even accept a 3% increased tax, I don’t expect that the middle class will be much interested in sacrifice.
@ Dave Minnich
Reasonable minds can differ over whether a public pension is property, or alternatively a contractual obligation. That is fair. However, no one can dispute that it is owed and that there are assets from which it can be paid.
As far as whether violence is always the attribute of a demented mind, I would disagree. Violence can be justified. I’m sure I have to cite you no example. There is no virtue in pacifism. I will not be subjected to thieves who would rather spend their wealth on a second home in Destin, FL or Costa Rica rather than pay taxes for the government services they only so recently decided they no longer need.
As for some resort to law enforcement to protect the tax cheaters and government lackeys of the corporations, since you haven’t been following my argument, I am law enforcement. The Egyptian army decided not to fire on protesters despite Mubarek’s order to do so. Neither will our army, police, prosecutors or judges. Its our pensions that are being stolen.
The Wisconsin governor is smart. He is exempting law enforcement. That won’t always be the case. When the day comes for the theft of law enforcement and military pensions, you won’t see schoolmarms performing sit-ins, you’ll have something altogether different. I hope it doesn’t come to that. There is a price to be paid and we can all pay it equally through our taxes or not so equally through a wholesale repudiation of our civic duties.
I disagree with you about there being any chance the Democrats will cease allying themselves with public employee unions in your or my lifetime.
I have considerable electoral political background and knowledge, both personally and because my father was a long-time California Democratic Party operative. You can read about his “last hurrah” here:
Search for the word “Panetta”, and yes, that is the Leon Panetta who is now CIA Director. He was then President Clinton’s Chief of Staff.
The Democratic Party will ride this one all the way down.
“Many people sincerely believe — and some disingenuously claim — that the cuts to government payrolls in states like Wisconsin are part of a greedy corporate agenda to reduce the population to serfdom while stuffing the pockets of fat cats on Wall Street and in shady foreign tax havens.”
“I have no doubt that many fat cats are stuffing their pockets as fast as they possibly can. But I don’t think that is what the Battle of Madison is really about.”
Man, I wish I’d had professors like Walter Russell Mead. I could have ignored any and all obvious evidence, and just said “I don’t think” the clear conclusion it pointed to was true. Life is SO much easier when you can just “think” things.
Good comment, Kurt Ulysses Larson; “This is life on The Wrong Side Of The Mirror; and Mr. Mead is Whistling Operatic Complexities in the Dark; the Protests in Madison are only the Beginning; and the Rich will, finally, have their Days of Reckoning.”
I wouldn’t recommend taxing the rich out of existence however. Better to tax their consumption progressively and use the proceeds to compensate the working man. First step, outlaw overseas tax havens and shell corporations. Second step, require (in conjunction with our allies) the registration of all bank and brokerage accounts. Third step, vastly expand the earned income tax credit, the object being to restore the real standard of living of ordinary Americans to where it would have been but for our elite-sponsored trade and immigration policies.
There is a third issue, labor saving technology. For that a 30 hour week would be a godsend to two-earner families.
Economics is too important to leave to the economists — at least this generation of economists!
Walt writes, “suffice it to say for now that it is harder to imagine a surer road to misery, poverty and global wars on an unprecedented scale than for the US to take this dangerous path [i.e., protectionism]. It is probably the most destructive as well as the most evil and unjust thing that we could do. The results would be devastating on a scale that could eclipse the horrors of World War Two”
This may be true. All the more reason to invoke the principle of compensation at the heart of trade theory, which Paul Samuelson & Sons misled Pres. Clinton on the likely consequence of Nafta and Gatt.
Their brand or irresponsible, dishonest, callous cosmopolitanism has set the world on a tragic course. The road to hell is paved with good intentions.
So far Obama doesn’t have a clue, alas. Paul Krugman is starting to come around but has a guilty conscience — as well he might.
The motto of the new global economy, addressed to American working people: “Let’s you and him share!”
In spite of being the admin for a blog named “The Robber Baron Economy” I am somewhat divided on this matter. I see this entire issue as the culmination of three separate issues:
1. On this first issue – I can only speak from my reference point as a New Yorker…but the public unions in New York simply got to cocky and way too pushy. They used their political muscle and wielded without mercy on the people of New York whose private sector was hip deep in pink slips and salary cuts. They were bold as brass demanding their steps and refusing to make any concessions. To say that the salaried middle class employee was infuriated by this behavior is an understatement. In NY they are over-compensated compared to the private sector AND have a benefits package that makes anyone private salaried employees drool. Many don’t even pay state taxes – they are exempt. Had they shown some compassion for those who had to foot the bill for all this – they wouldn’t be facing the fury of the voters who stupidly went “tea party” on them to get the insane taxes under control.
2. For a society to function properly – it must have the means to effectively and fairly tax its highest income earners and those with high net worth. Part of the problem in New York is that on both the state and federal level – the rich are simply not paying their fair share. Anytime anyone tries to redress this system – they manage to slither out of doing so.
For our society to remain whole, progressivity must be re-established so that money actually circulates. Right now its being hoarded by the top 2%- leaving the bottom 98% scrambling for the scraps. If we are treated like animals – we will act like animals.
3. This brings me to my final point. I don’t care that the union working screaming on CNN suddenly has to cough up $260 a month for health care. I have to cough up over $500 a month just for one person. What I do mind is that her union and all unions could lose the right to collective bargaining. That is the last nail in the coffin of the ability of working people to redress grievances and have any shot of it being dealt with. It is a slippery slope from there.
Just so you know, I was a graduate student working in a laboratory when Bush said we were students and shouldn’t be allowed to unionize because “working in the lab or teaching were no our primary functions.” The resulting abuse of the system by the institutions and individual investigators were a major reason I left my field after getting a doctorate. I saw nothing in my future but an endless indenture of slave wages and terrible working conditions. If that is allowed to percolate through the entire economy – we will be back to the sweat shops of the 19th century in very short order…indeed we are already on our way. You think we have disruption now – if that is allowed to take hold, you will have violence.
The author does not address how employees will ever have a say in how they are treated in the future…and THAT is where he veers way off the track. You better have something to replace collective bargaining with if you are bent on entering a brave new world without it.
Nice comment Tom Holsinger:
“IMO the means of destroying the “culture of bureaucratic legalism” must include the termination of federal income tax deductions for state & local taxes, as those operate as federal tax subsidies of public employee unions.”
I haven’t even heard that point made before. God save the blogging world!
With the people who broke us getting only richer and the middle class disappearing into the gulf between the Haves and Have-nots, unions and organizing are one of the few tools left to level the playing field. This country isn’t really broke. It’s just that the people who have the money to pay our bills are not being asked to chip in their share. That’s why the uninionists in Wisconsin are so angry and why the entrenched unfairness makes the struggle in Wisconsin a lot more like Egypt that Professor Mead seems to think.
Another brilliant article Professor Mead, but I wish you would study up on economics. The minimum wage hurts low productivity workers, and raises the wages of some at the expense of disemploying others. Private labor unions raise the wages of a small minority of workers by reducing labor supply in some firms and industries, thus increasing wages, while forcing an increase the labor supply to other firms and industries, driving wages down. As for regulation, while often rationalized by good intentions, they frequently increase costs far more than benefits. If these misallocations of resources, reducing output, creating massive useless bureaucracies, and hampering competitiveness are eliminated, there would be a large social benefit. If this be called “retrenchment”, let’s have more.
Finally, a PE with some [Spanish word for certain male glands deleted — ed]!
@Steve Smith – QUIT being a public employee. Immediately.
Let me give you reality, you will have heard it from me, so no excuses.
We only buy as much justice as we can afford. We could put the entire GDP into trying a single traffic ticket, but we don’t.
The point is we only buy as much government as we can afford.
Now in that light, let me give you some heads up: we don’t care if public employees are [vulgar synonym for ‘poor performers’ deleted –ed]. we don’t want to pay them more than we make on avg. – EVEN IF they have more “education” (which we paid for).
Just get out. Sound off here, but then man, listen to me – GET OUT, because we have a far lower opinion of government work than you do, and you are a fool, if you waste your life arguing.
As of this minute, you have been told, there will be no excuse if you show up at work tomorrow.
Expect less, and now that you do, decide what to do with your life.
as long as we support a system that rewards the off shoring of jobs at the expense of our communities and tax base, you will continue to march to the bottom of the new world order. Do you like it? If so, just up and move to Mexico. That’s what we’re going to look like sooner rather than later.
I would rather have the statistics of Germany than China. While Wall Street is having its love fest with cheap imports, our boat is looking pretty bad.
Time to remove lobbyists and the corporations they represent out of US politics.
To all readers of this blog, and to Walter Mead especially, I recommend “World Trade and Payment’ by Caves and Jones. It is the classic teaching text on trade, the prose is clear, the math minimum. I read it when I was already an old man, so I know it can be done. Absent the knowledge contained in that book you can never really appreciate the fix our country is in.
A great article, however, you seem oblivious to the relationship between Unions and Organized Crime. Citizens might get “An Offer They Can’t Refuse”!
Unions have the same control over POLICE! There is influence peddling going on that few are aware of. Likely few criminal lawyers, in Massachusetts, would be willing to admit what they know is going on in the Courts. Criminals are given a Get-Out-Of-Jail card routinely and citizen’s better take the guilty plea-bargain or be maliciously found guilty so the Courts can keep their conviction rate up! “Not Guilty’s” are for Friends!
Court employees, up to ClerK if I’m not mistaken, are Union Workers and Unions are tied at the hip to most Judges! Don’t you think Union Bosses call on these “Friends” for favors?
May be we are about to find out that there is nothing any of us can do. That the party is over! What if States try similar cuts but include law-enforcement, etc. Unions can selectively have them walk off the job. May be the police would work overtime, though, but in support of the protestors. Hopefully the armed services would side with the people, as it appears is happening in Egypt.
They keep Jails full, to ensure plenty of Union jobs. Some people, for years, who should be in a treatment program, on a bracelet or a number of other reasonable solutions. They destroy lives with years in prison for DUI laws or a small amount of pot. Things which their “Friends” don’t have to worry about. Unless they kill someone, or such, and it’s all over the papers. But they’ll still get a “sweetheart” deal. It’s Organized Crime and Unions are the basis of it. Police Officers are always found “not guilty” of DUIs, in Massachusetts, even if involving accidents and personal injury and the officer is back driving a cruiser and putting people in prison for lessor crimes! As the President said, “punish our Enemies and reward our Friends”! It looks like it’ll take a knock-down drag-out fight to get this crowd out of government.
Thanks for a brilliantly stated and objective analysis of the situation in Wisconsin. I suspect the Democrats have sprung themselves a trap there. We’ll see over the next few weeks. In the end, we will either regain some balance of power for taxpayers, or this will mark an inevitable decline into a euro style social democracy with wildcat strikes every week like France, and the inability to get out of our own way. I winder if those on the right recognize the importance of this battle, the left certainly does.
Following the comments to this post made me kind of cringe. How quickly we turn on each other when times are hard and budget cuts are imminent. But for those who have been active in the posts surrounding Mr. Smith and cuts on government employees–I came across a few lines that might give you exposure to a new perspective. It’s from Richard Nixon’s Farewell Address, where he stood in front of all those who had made it possible for his Administration to govern the U.S. and said:
“…Mistakes, yes. But for personal gain, never. You did what you believed in. Sometimes right, sometimes wrong. And I only wish that I were a wealthy man — at the present time I have got to find a way to pay my taxes –[laughter] — and if I were, I would like to recompense you for the sacrifices that all have made to serve in Government.
But you are getting something in Government — and I want you to tell this to your children, and I hope the nation’s children will hear it, too — something in Government service that is far more important than money. It is a cause bigger than yourself. It is the cause of making this the greatest nation in the world, the leader of the world, because without our leadership the world will know nothing but war, possible starvation, or worse, in the years ahead. With our leadership it will know peace, it will know plenty.”
August 9th, 1974
You are getting something from Serving in Government, more than money.
for your continuing education…http://www.nakedcapitalism.com/2011/02/wisconsin-union-battle-a-convenient-distraction-from-the-real-culprit-in-state-budge-woes.html
Your notion that public employees don’t need/shouldn’t have collective bargaining rights because they are also voters is absurd. By your logic, employees who are also stockholders in the company they work for shouldn’t want, need, or be permitted to have collective bargaining rights. The employee-employer relationship and the voter-elected official relationship are two different things.
Also keep in mind that this governor deliberately brought about the budget shortfall, to serve as justification for his attack on unions.
@Mike Cagle: Actually, I don’t think union representatives should sit on the boards of the companies whose workers they represent.
It’s hard to believe that public sector workers are the cause of Wisconsin’s budget problem, or that reducing their number by 10 or 20 percent would solve it. Some numbers, pls? (And the same for the nation.)
The most significant thing said here is that public sectors workers shouldn’t have an economic leg up on private sector workers, which has increasingly become the case over the past several decades.
Gov Walker made clear his reasons for opposing collective bargaining. Wisconsin has a 1905 law that protects civil service workers that remains one of the most progressive in the country, making collective bargaining in essence redundant and unnecessary. Walker also said that the average length of a collective bargaining session is 15 months and that was under a D government. He estimates that would grow to 18 months under R leadership, meaning these changes he seeks would be forestalled for up to two years. Collective bargaining is a stall technique to drag out negotiations and at the expense of unaffordable compromise. In other words, the modest pay-ins that public workers would make to their benefit plans would be dragged out indefinitely.
Walker brown-bagged his lunches as Milwaukee’s county executive and forfeited hundreds of thousands of dollars of his salary to help make ends meet as the first ever Republican exec in Democrat-owned Milwaukee where he served three terms. Compare that to the union thugs in Madison who in the middle of the protests were already angling for full pay while not on the job teaching school children.
It is time to reconsider the nature of unions, which in this case have almost no resemblance to the blue collar unions of the past. Unions, by arrogantly fighting any effort to reform them, will continue to diminish as they have for decades, but now more quickly than ever.
Obama has increased the size of federal government by 200,000 public sector workers. Yet they account for zero revenue while sucking up giant stacks of Benjamins through wages and benefits. It’s a ponzi scheme to reelect Democrats through union dues over which workers have no control–combined union monies to Ds over the past 20 years has been ten times that of Big Scary Oil, while Big Oil distributes campaign funds, like most corporations, to both parties to hedge its bets–and it should be illegal.
Wisconsin is a unique place. When my grandmother’s family came here from Germany, through the St. Lawrence Seaway and Milwaukee, they were part of a progressive diaspora that had fled mid-19th German unification problems, and their progressiveness fueled the development of the UW. My grandmother’s father, though old and infirm, felt the need to be seen on Victory Night after WWI, came down with pneumonia in the cold and damp and died as a result, but as a German he felt the need to show his support for America. Quite different attitude from today’s immigrants.
My mother, a farm girl from the Driftless are, was from a Cornish background and they came here to mine lead. She was a distant relative of Frank Lloyd Wright’s and lived near Taliesin, so worked her way through college at the UW as a gofer for Wright’s sister, known only to my family aristocratically as Mrs. Porter. Mom was a member of the Farm Union Labor Party and grew up on a nearby farm. Later Mom and Dad got Wright to design the home I grew up in in Lancaster. My dad quarried all the limestone over a three year period by himself while starting a law office and dug the footings and went out every day before work to read blueprints and draw lines for the stonemasons. As a result, the home cost $15,000 and Wrights deal was 10% of the final costs, all things included. It cost them $1,500 for a home that she still lives in 60 years later.
My Dad was conservative and also from poverty. Wisconsin has a fascinating history of political and personal oddities. The Republican Party got its start at a meeting in Ripon in 1854. Lincoln and Jefferson Davis both served in the army during the disgraceful Black Hawk wars here. The progressive party began in Wisconsin under Fighting Bob LaFollette, for whom my mother’s aunt, Mary Sims, was his girl Friday. She later married Robert Moses, the architect of modern New York City, and ironically a key player in the St. Lawrence Seaway. Mary’s sister, Emily Sims, was a pioneering social worker in Manhattan and worked on children and women’s labor issues.
On the other hand, Joe McCarthy grew up in Appleton, also the home town of Harry Houdini and Fred McCarthy, not to mention Willem Defoe. An off-branch of Mormonism, led by the charismatic James Jesse Strang left Navuu, IL. on Joseph’s Smith orders, just prior to Smith’s murder, to pioneer a branch in Wisconsin, eventually moving to an island in Lake Michigan where he had tens of thousands of followers and practiced polgamy and the belief that he was a sort of corporeal king of his flock. Problems with neighbor islanders eventually led to his murder.
Ed Gein, the “psycho” in Psycho, Hitchcock’s movie, is legendarily a rural Wisconsinite, and Charles Manson’s son grew up in Eau Claire where his mother, a librarian, moved back to after the Manson clan was broken up.
And, although Wisconsin wasn’t settled by Anglos and Germans until much later, Father Nicolet landed in Green Bay in 1634, just a dozen years after Puritans landed on Plymouth Rock. The very early French presence on our waterways included the “governor’s mansion,” Villa Louis in present day Prairie du Chien, near where I grew up, in the Driftless area, on the Mississippi. In the 17th century, Villa Louis enjoyed cork rubber tracks for foot races and luxurious yachts for extended vacations on the river when neighboring French “governors” would come to visit. It was an aristocratic Versailles in the Midwest.
I disagree with the commentor here who says the government cannot renege on a contract. The government is not a perfect entity but is perfectly capable of making terrible mistakes, which then should be recognized and corrected. This was a mistake and it shouldn’t stand. The inability to correct a mistake is also a form of a broken contract, that made by the government to ALL the people, not just a select few.
Kudos Mr. Meade! You have indeed chosen your next rhetorical move carefully. There is just one tiny problem. You have not really addressed how we are to avoid the consequences of the fiscal calamity that presently engulfs us. If you can refute the doomsayers then please do so; then I can stop worrying about my son’s future! If you can’t, a forthright admission would also be appreciated.
The radical restructuring you recommend is sound. But how is it to be enacted in a climate that features a ruling class and media still largely in denial or cynically playing the rubes for fools? Have you noticed how the MSM is playing the events in WI? Of course you have.
The smart money would have to bet we will see a major fiscal catastrophe before a consensus will form around the reforms you suggest. How amenable will the public then be to persuasion by the expert class that got us into this mess in the first place?
8.Tom Kinney says: a lot
I’m still waiting for you to tie in Leif Ericson, Thor and Ted Nugent into this account. Please let us know when you will enthrall us with your next dispatch.
Regardless of the merits of the Governor’s proposal, from a perspective of strategy, I find the Democrat response most interesting.
When the Democrats in Congress rammed through all sorts of legislation in the 111th Congress, the GOP in the House stood there and took it, powerless to do anything else. They had to depend on the GOP in the Senate sticking together with their only real weapon, the filibuster. This is conventional strategy.
In the case of Wisconsin, the Democrat senators departing left the GOP temporarily impotent and unable to move the bill forward.
A rule of strategy is to not play by the opponent’s rules.
By leaving the state, the Democrats bought themselves some time and space to marshal their own forces in opposition. Whether it works or not is another transaction. The point is, without coming up with a non-conventional strategy, they wouldn’t have had a chance.