I came across an excellent long post at Bookworm this morning. I have been very aware of the growing presence of illegal aliens in California for the past 40 years. Not far from my home you can see some of it as Hispanic men gather at street corners looking for day labor.
Two such corners are at Jeronimo and Los Alisos in Mission Viejo. Another is a half mile away at a U-Haul yard where people rent trucks and trailers. Every morning you will see 50 to 60 men standing on the corner and running over to any car that seems to be slowing down or stopping.
Anyway, here are a few reflections on what is happening.
The communists’ big moment came in 1995 when no one was looking. That was the year that the Democratic Socialists of America, a communist group, put one of their own — John Sweeney — in as head of the AFL-CIO. Overnight, the AFL-CIO, an organization that was once ferociously anti-communist and that opposed amnesty because it would hurt working Americans, turned into a pro-communist, pro-amnesty group.
More than that, through the AFL-CIO, communists suddenly owned Congress. After all, unions (headed by the SEIU, which outspends the next two donor organizations which are also Leftist) are the largest contributors to Democrat politicians.
Ok, Ok I know that communists are an old story. Still, what we see in this country is Socialism gaining adherents among the young and poorly educated and among the rich who consider themselves immune to its ill effects.
The situation in Madison Wisconsin has been so well covered by Ann Althouse on her blog, that I have not felt it necessary to mention it. Yesterday, the situation began to change. This is what union rule would look like:
The state Senators had passed the limited budget bill that included only the collective bargaining provisions. The Democrats had blocked the fiscal portions of the bill by fleeing the state two weeks ago. Walker has had this option since they left but he and Majority Leader FitzGerald, were negotiating with the Democrats in hopes the standoff could be ended. The negotiations (not reported by the MSM, of course) broke down when it became apparent that the Democrats are nationalizing this controversy. Walker then encouraged the Senate Republicans to go ahead with Plan B. They did and the law was signed by Walker yesterday.
My prediction: 10 years from now public higher education, at least in many states, will have ceased to exist. 20 years from now state governments will realize that they still own the buildings and property on their former state university campuses and start charging us rent to use them. 25 years from now citizens will complain that they can’t afford to send their children to college–any college. But by then the peasant class will be so firmly established that it won’t really matter.
Welcome to the 19th century.
Meanwhile, the Republican criminals in Wisconsin forced through their attack on workers’ rights, leading to an uproar in Madison. (Thanks to Steve Nadler for the link.) At some point these acts of brazen viciousness are going to lead to a renewed philosophical interest in the question of when acts of political violence are morally justified, an issue that has, oddly, not been widely addressed in political philosophy since Locke. (Ted Honderich’s somewhat controversial work on Palestinian terrorism is a recent exception.)
Here is a respected academic advocating political violence on the pattern of the Palestinians. The Cloward-Piven Strategy lives again ! Naturally, the two authors were sociologists.
Why has this rather routine process in a midwest state gotten such national attention? There are at least two reasons. One is that Obama has to win Wisconsin next year to be re-elected. Wisconsin has been a blue state for many years and was the origin of Progressivism with the La Follette family. It is even the origin of the public employee unions, as the AFSCME began there. However, the Republican swept state offices in the 2010 election. Why ?
The wave of red crashed ashore in Wisconsin as well, as Republicans took over the governor’s mansion, a Senate seat, two U.S. House seats and the state legislature.
Political newcomer Ron Johnson defeated incumbent Democratic Sen. Russ Feingold by a comfortable 5-point margin, and Milwaukee County Executive Scott Walker took the governor’s office by a similar margin over Milwaukee Mayor Tom Barrett.
Republican Kurt Schuller defeated incumbent state Treasurer Dawn Marie Sass, and Republican Attorney General J.B. Van Hollen was re-elected.
Secretary of State Doug LaFollette was the only Democrat left standing among statewide officeholders. Democrats lost control of both houses of the state legislature, making Wisconsin the only state in the nation where Democrats lost a governor’s office, a Senate seat and a complete legislature, according to the Milwaukee Journal Sentinel.
State taxpayers were concerned about the fiscal situation. Walker had been left a huge deficit by his Democrat predecessor. Some of this was denied by the hard left which said that there was no deficit. This has been disproved.
To the extent that there is an imbalance — Walker claims there is a $137 million deficit — it is not because of a drop in revenues or increases in the cost of state employee contracts, benefits or pensions. It is because Walker and his allies pushed through $140 million in new spending for special-interest groups in January.
Actually, the alleged “new spending consists of promised tax breaks for employers who bring new jobs to the state. No new jobs, no tax breaks. Democrats have trouble with these matters. It requires math. The same left claims that the Social Security Trust Fund actually contains funds.
The rebuttal:
In other words, Walker’s decisions did impact the budget — but not necessarily the budget for this current fiscal year, which is facing $137 million shortfall.
“The vast majority of the cost of those bills … will be in the next budget, the 2011-213 budget, which has not even been debated yet,” says Brett Healy, president of the MacIver Institute.
Instead, this current year’s deficit is mainly due to other factors: the nearly $60 million Wisconsin owes Minnesota, and deficits in various state departments, including the corrections department, the medical assistance program, and the public defenders’ office.
“This stuff [the Walker legislation] will add to the deficit of the upcoming budget, but it has no immediate impact,” says Healy. “Gov. Walker is trying to be responsible and actually do something to try to stop the bleeding. And for anyone to say that somehow he made the current situation worse is just plain wrong.”
Ezra Klein, a 26 year old UCLA graduate with no financial experience seems to be the source of this accusation. Mr Klein would do well to study the matter more, even carefully reading the letter he quotes, before making accusations.
Under the new law, government workers will vote annually on whether they wish to be represented by a union, and the state will not be compelled to extract union dues from employees’ paychecks on behalf of the unions. Health-care and pension benefits for government workers will be set by the people’s elected representatives outside of the union-dominated collective-bargaining process, and wage increases will be indexed to inflation. Government workers still will enjoy salary-and-benefit packages that in most cases exceed what those workers could hope to command in the private sector, along with such hard-to-price benefits as enhanced job security.
That is the real source of the rage on the left: Mandatory union representation, empowered by mandatory collective bargaining and mandatory dues deductions enforced by the state, creates an enormous flow of cash for Democratic political candidates and their pet causes. From 1989 to the present, five of the ten biggest donors to American political campaigns have been labor unions, including public-sector unions such as the National Education Association and the American Federation of State, County, and Municipal Employees. The overwhelming majority of those donations go to Democrats. The union bosses and their Democratic patrons know that giving workers more of a choice about union representation will diminish that power and reduce that cash flow. That is what this is about, for all of the cheap talk about “civil rights” — as though federal employees in Washington were being treated like second-class citizens because their unions do not enjoy the same princely powers until now wielded by Wisconsin’s
The provisions on union membership and mandatory dues collection are stilettos aimed at the heart of union political power. In Indiana, governor Mitch Daniels decertified public employee unions by executive order when he took office two years ago.
On his first day Daniels reversed an executive order signed by a Democratic predecessor granting collective bargaining rights to state employees. Union membership plummeted overnight. “I think they were happy to have the extra thousand dollars that would have gone to dues,” Kitchell said. Decertifying the public-employees’ union has spared Indiana pressures that have crippled other state governments. Unhindered by union demands, the governor instituted a “pay for performance” scheme, rewarding state employees who met explicit goals with raises ranging from 4 percent to 10 percent. The salaries of underperforming employees stayed flat. No one was fired, but every time a job went vacant a supervisor had to justify hiring a replacement. The number of state employees has fallen from 35,000 to under 30,000, back where it was in 1982.
Here, I think, is the heart of the Democrat/union fury at Scott Walker. Unions, especially public employee unions, are heavy hitters in politics and support Democrats almost exclusively. The push for “card check” by the Obama administration during the last Congress was an example of payback for union support. Private industry unions have found themselves unable to win elections in attempts to organize workers at non-union plants. Therefore, they have tried to get “card check” passed while the Democrats held Congress. Card check is a term for non-secret ballot elections. The voter has to make his vote public and therefore subject to the sort of pressure seen above in the video.
incoming legislators would do well to heed the public’s desire for big government and big labor to step back and allow the free enterprise system and job creators to get our economy moving again.
One of the signature issues of the election was the misnamed “Employee Free Choice Act” and its “card check” provision that would have effectively eliminated private ballot voting for employees deciding whether to join a union. Poll after poll warned that voters—including union households—would reject any attempt to circumvent the secret ballot, and they made good on their word. More than 40 candidates who had voted for, cosponsored, or endorsed EFCA were asked not to return—including at least 31 who co-sponsored the bill in the 111th Congress.
It is important to note this was an American issue, rather than a partisan issue. In the Senate, eight candidates who supported card check lost while West Virginia Gov. Joe Manchin, who came out against the bill, won. And voters in four states, Arizona, Utah, South Dakota, and South Carolina, passed measures to head off any potential efforts to kill secret ballots in their states.
This is an issue related to that in Wisconsin. Unions need money and dues are the “mothers milk of politics” to quote Jesse Unruh, late political power in California. Why do they need money, aside for political power? You will not read this in the NY Times or LA Times but unions are in deep financial trouble.
‘We spent a fortune to elect Barack Obama,” declared Andy Stern last month, and the president of the Service Employees International Union wasn’t exaggerating. The SEIU and AFL-CIO have been spending so much on politics that they’re going deeply into debt.
That news comes courtesy of federal disclosure forms that unions file each year with the Department of Labor. The Bush Administration toughened the enforcement of those disclosure rules, but under pressure from unions the Obama Labor shop is slashing funding for such enforcement. Without such disclosure, workers wouldn’t be able to see how their union chiefs are managing their mandatory dues money.
Alarm is coming even from inside the AFL-CIO — specifically, from Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, who sits on the AFL-CIO’s finance committee. Bloomberg News reports that he is circulating a report claiming the AFL-CIO engaged in “creative accounting” to conceal financial difficulties heading into last year’s Presidential election. As recently as 2000, the union consortium of 8.5 million members had a $45 million surplus. By June of last year it had $90.6 million in liabilities, or $2.3 million more than its $88.3 million in assets. “If we are not careful, insolvency may be right around the corner,” Mr. Buffenbarger warned.
Here may be the answer to the furious and violent reaction to Scott Walker. The dues provisions and annual election provision may cut union income by up to 90%, especially in a tight economy when that $1000 in dues money could come in very handy. After Mitch Daniels ended mandatory dues collection in Indiana, union dues income from public employees fell 95%. The recent furor and walkout by Democrats in Indiana concerns that new legislation would affect private unions and their dues. Daniels has suggested that the legislature delay this issue for now. The proposals would make Indiana a “right-to-work” state.
By the end of 2008, the SEIU also owed Bank of America nearly $88 million, including its headquarters loan and another $10 million for unspecified purposes. This is the same BofA that the union has spent the past months attacking as the face of Wall Street excess. The SEIU has protested outside of Bank of America offices and demanded the resignation of CEO Ken Lewis. We assume no one forced the SEIU to invest in real estate or borrow from a bank to finance it.
An SEIU spokeswoman says the union works on a four-year cycle, in which it goes “all out for the presidential election” and then rebuilds its finances. She adds the union has paid back more than $10 million of the $25 million it borrowed last year. But it’s nonetheless true that the SEIU’s liabilities have continued to climb each year from 2003 to 2008.
The dues and annual election provisions, if copied by other states in serious fiscal peril, could cut the union movement off at the knees. That is where the fury originates.
UPDATE: There is a state that is working. It is called Texas, and the Economist has a report.
The French king, Louis XV, is said to have predicted that “the deluge” would follow his reign. His great grandfather, Louis XIV, the “Sun King” had reigned for 72 years, from the age of five. he left France glorious but financially ruined. One wit of the time said if the courtiers could be convinced to put paper on their walls and gold in their pockets, the kingdom would be far better off. They did not and profligacy continued. Finally, it all ended with the hapless grandson of Louis XV when he ( Louis XVI) and his young wife, Marie Antoinette went to the guillotine.
Something like this is happening in California as the public employee unions are determined to prevent any attempt to rationalize the state’s finances. Now, they will try to block insolvent cities from filing bankruptcy.
Mendoza’s bill would not only empower the commission to regulate bankruptcy filings but allow it to impose conditions on the filings they do allow, which is the nut of the issue. Local governments that file for bankruptcy may be able to abrogate their labor contracts, but if AB 155 becomes law, the debt commission could – or at least the unions hope they would – block abrogation.
You’d think IOUs would be enough to convince them of the seriousness of the problems. Louis XVI wavered and almost was persuaded of the necessity for financial reform but his arrogant nobles were convinced they could overcome the rabble.
The Service Employees International Union has been in the forefront of driving California to bankruptcy with its sweetheart union contracts and pensions. It was instrumental in defeating Arnold Scwartzenegger’s ballot initiatives after his election, in which he tried to gain control of some state spending. The teachers’ union mortgaged their headquarters in San Francisco to get money for TV ads in that battle. They won and Arnold has given up his attempts to slow the spending tsunami. The result is that California is bankrupt but, in a sort of sweet irony, the unions seem to have bankrupted themselves in the struggle to keep California spending too much. They also spent many millions to elect Barack Obama, an investment that will pay off better than their California spending.
But all that spending eroded much of the SEIU’s finances. The article notes that the union took out $25 million in loans last year and saw its net assets fall in half from the previous year. It also points out that the SEIU fired some of its Washington, D.C-based staff.
The SEIU is running TV ads even today trying to stop state budget cuts. The ads are sponsored by something called Commonsense4CA.org. I went to the web site and, sure enough, the SEIU seems to be spending their last dollars in a futile effort to prevent cuts that may be enforced by a bankruptcy judge although there seems to be no chapter of the code for states.
Their last hope appears to be the Obama Administration, which will divert the public purse to bail out unions. Ask the UAW and the Chrysler bond holders.
If I were a union member, as I once was many years ago, I would be unhappy at all this spending.
Michael Barone is a bit provocative today when he writes that Democrats are abnormal. That should fill up his comment box. Jonathan Chait raises some of the same issues in TNR this week. Chait writes:
The last Democrat who held the White House, Bill Clinton, saw the core of his domestic agenda come to ruin, his political support collapse, and his failure spawn a massive Republican resurgence that made progressive reform impossible for a decade to come. The Democrat who last held the White House before that, Jimmy Carter, saw the exact same thing happen to him.
Barone sees a fundamental difference:
the Republican Party is the party of people who are considered, by themselves and by others, as normal Americans—Northern white Protestants in the 19th century, married white Christians more recently—while the Democratic Party is the party of the out groups who are in some sense seen, by themselves and by others, as not normal—white Southerners and Catholic immigrants in the 19th century, blacks and white seculars more recently.
I disagree with both of them. The parties have evolved the past 40 years and do not resemble the parties of the 1930s and 40s. I have read quite a bit about Wendell Willkie and his nomination as the GOP presidential candidate in 1940. My review of one biography of him is here. Willkie was a modern figure who was very reluctantly nominated by a deeply isolationist Republican Party in 1940. He came within 600,000 votes of defeating Roosevelt and probably only the war kept Roosevelt in office. In 1944, he was denied the nomination and Dewey, an immature and unseasoned politician, was defeated handily by the dying Roosevelt. The Republican Party of today is nothing like the party of 1940, or even of 1948.
Eisenhower made an enormous change in the party and the Civil Rights struggle split the Democrats, ending their domination of the presidency for the next 50 years. Carter was elected because of the Watergate scandal and lasted only one term. Clinton benefited from the third party candidacy of Ross Perot and never did get a majority in spite of being re-elected. Obama has now been elected because of the financial collapse and the weak candidacy of John McCain.
The Democrats have become the party of a cluster of self interested entities whose concern is less in governing than in accomplishing the goals of the interest group. The Teachers unions are determined to keep vouchers suppressed and to keep the money coming in education funding. Their interest in results with students is minimal. The great industrial unions are a thing of the past or, as in the case of the auto industry, an albatross around the neck of dying industries. The steel industries restructured themselves in bankruptcy but the auto companies have been diverted by the lure of government money. It will be a poor bargain, losing billions of taxpayer funds and probably failing completely in the hands of politicians.
The growth of unions is limited to public employees and here is where the other great power of the Democrats is lodged. These unions have used political power to obtain salaries that exceed the same levels of compensation in private industry. Secondly, they have obtained promises of lavish pension and health benefits that previously only existed in the dying industrial unions. There are no layoffs and, even in bankrupt California, the numbers of employees grow steadily. Unfortunately for the public employees, just as in housing prices, trees do not grow to the sky. Everything comes to an end when the laws of gravity are exceeded. The first harbinger was the city of Vallejo, which declared bankruptcy last year. The cause ?
The city of 117,000 is facing ballooning labor costs and declining housing-related tax revenue that have left it with a $16 million deficit forecast for the year starting in July. In bankruptcy, creditors will be kept at bay while officials devise a plan to balance the books. City services would still operate.
The Democrats have also attracted a prosperous segment of the population which may not agree wth all the economic nostrums of the Democrats but are attracted by issues like global warming, gay rights abortion and other social causes that transcend economics and are fashionable right now. The global warming thing has taken on some of the characteristics of a cult. Children are taught recycling even though it has been shown to be ineffective in conserving resources. Wealthy people buy Priuses and “green” coffee and organic vegetables as a social class statement. The economic policies of Obama may shake the faith of some of these people who are more libertarian than true blue Democrats.
What about the Republicans ? Tradition has it that the GOP is the party of big business. Is that true ? Most of the political contributions from Wall Street were going to Democrats. Now, in fairness I should say that business men tend to support whoever is in office. Incumbents get the larger share of contributions as businesses buy protection from Congress. In the 2008 election Wall Street backed Obama with millions.
Illinois Sen. Obama, who captured the Democratic presidential nomination on Tuesday after a lengthy primary battle against New York Sen. Hillary Clinton, has received $7.9 million (4.1 million pounds) in contributions from the securities and investment industries, according to the Center for Responsive Politics.
His opponent, Republican Sen. John McCain of Arizona, banked a little under $4.2 million, putting him behind fellow Republicans Rudolph Giuliani and Mitt Romney, who have long since dropped out of the race.
And that was just the primaries.
Who are Republicans ? Barone has some theories.
that the Republican Party is the party of people who are considered, by themselves and by others, as normal Americans—Northern white Protestants in the 19th century, married white Christians more recently.
There is more to it than this. Cuban exiles and Vietnamese exiles have been loyal GOP supporters since they attributed the loss of their homelands to Democrats’ policies. Small business owners are probably the most firm Republican supporters just as lawyers tend to support Democrats. They are acting in the best interests of their occupation, as big businessmen once did 50 years ago. Many of those small business owners are minorities and that may mitigate the effects of racial politics, which favors Democrats even though blacks obtained their Civil Rights through Republicans. Hispanics tend to have families, although illegitimate birth rates are rising.
The Christian conservatives have been credited with far more power than I believe they have in the party. Republicans, since the 1960s when cultural radicalism was adopted by the Democrats, have attracted those who are mostly concerned with children and families, and that includes the Christian conservatives. Many of them are not particularly conservative economically, although many have small businesses. The central theme seems to be a conservative outlook on economics and family life. That includes self reliance and independence. Abortion is a major issue with these voters.
Democrats have trended to communitarian beliefs in which individualism, including such topics as gun ownership and the military, is to be suppressed in favor of group rights. It comes down in the end to individualism versus group rights.
communitarianism emphasizes the need to balance individual rights and interests with that of the community as a whole
This includes “spreading the wealth” around and punishing individual achievement with high taxes, even taxes that total more than 100% when state and city taxes are included.
In the first ruling of its kind, a bankruptcy judge held the city of Vallejo, Calif. has the authority to void its existing union contracts in its effort to reorganize, holding public workers do not enjoy the same protections Congress gave union workers at private companies.
Municipal bankruptcy is so rare that no judge had yet ruled on whether Congressional reforms in the 1990s that required companies to provide worker protections before attempting to dissolve union contracts also applied to public workers’ union contracts
U.S. Bankruptcy Judge Michael McManus held March 13 that when Congress enacted 11 U.S.C. sec. 1113 to limit companies from outright rejection of union contracts it limited it to Chapter 11 bankruptcies. By failing to extend the limits to Chapter 9, which covers municipal bankruptcy, McManus said cities have broader latitude to break existing union pacts, In re City of Vallejo, 08-26813-A-9 (E. Dist. Calif.)
All I can say is “Holy Shit!”
The public employee unions will be racing to have Congress change the law but it may be too late.
UPDATE: More from Mickey Kausabout the bailout situation. This may not fly as the public is wise to it. At least 64% of them are.
There was considerable discussion about Obama appointing a “car czar” to solve the problems of the Big Three auto makers. That has now been cancelled. Why ? This might explain it.
President Barack Obama announced Monday that he will appoint, not a “car czar,” but a “Presidential Task Force for Autos” to “fix” the Detroit Three. The task force will headed by Treasury Secretary Tim Geithner, but it is the first name appointed by Geithner — “Senior Advisor” Ron Bloom — is of real interest for a number of reasons.
Ron Bloom is the UAW’s man in the administration. The only chance to solve the Big Three’s problems is bankruptcy. Not only are their union contracts too expensive, the work rules and other adversarial factors in the relationship will prevent the auto makers from restructuring and becoming competitive once again.
Bloom (and Keilin) made their reputation battling steel companies which, burdened by excessive union costs, suffered through a very similar experience to the Detroit Three thirty years ago. In fact, as the New York Times’s David Streitfeld points out in this superb article, five U.S. steel companies received over $300 million in bailout loans from the Carter Administration in the 1970s.
They still ended up in bankruptcy but, in the meantime, the unions had extracted millions in additional money from the taxpayer. Mickey Kaus knows what the problem is but Obama isn’t interested. This will be another boondoggle and will cost millions, if not billions.
Today, the city of Vallejo, California filed for bankruptcy due to excessive city employee costs and pension obligations. The public employee unions have had a merry time, bidding up salaries and pensions by supporting enabling politicians. Now, the real estate crunch may be the straw that broke the proverbial camel’s back. This will not be the last municipal bankruptcy. A few elected officials have recognized the danger and tried to do something about it, but they are few, far too few.
Nancy Pelosi has blocked the Columbia Free Trade Agreement from coming to a vote in Congress. This kills it for the year in spite of the fact that it was signed several years ago, then renogotiated to satisfy Democrat complaints. Here is a Washington Post interview with the president of Columbia. Maybe Nancy Pelosi should read it.
Eveyone knows this is an election year kabuki dance that Democrats must perform to satisfy dinosaur trade unions that, having killed off the US auto industry, is now after the rest of our export based economy. Hillary Clinton’s campaign manager, Mark Penn is the latest victim. This is insanity but Democrat politics has its own internal rhythm that does not require logic.
There is an unending debate about just why the Great Depression occurred. We have had financial panics ever since the colonies declared independence. Severe ones occurred in 1893 and 1907. There was a severe recession after World War I.
One school of thought believes that the Glass-Steagall Act, that set up the Federal Reserve Bank, was responsible because the Fed panicked and contracted the money supply just when the need for capital was greatest. Amity Schlaes, in her book The Forgotten Man, believes it was the ill-advised actions of Hoover and Roosevelt that tipped us over the edge. Everyone, however, agrees that the Smoot-Hawley Tariff, which Hoover signed in 1930, was a big part of the problem.
One thousand twenty-eight economists in the United States, organized by Paul Douglas, Irving Fisher, James TFG Wood, Frank Graham, Ernest Patterson, Henry Seager, Frank Taussig, and Clair Wilcox, and representing the “Who’s Who” of the profession, signed a petition asking President Hoover to veto the legislation (New York Times, 5 May 1930)
Now, we have the other political party demanding a similar economic measure that will have similar effects on world trade. Fortunately, John McCain is speaking out against protectionism but a President Obama, in spite of his advisers, may do a Hoover and worsen the coming recession precipitously.
Santayana famously said, “Those who do not remember history, are condemned to repeat it.”
