19 Feb 2011

The Battle of Madison

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40,000 angry protestors flocked to the Wisconsin capital yesterday

Walter Russell Mead explains the nature of the struggle currently underway in Wisconsin, and predicts that however this particular battle goes, a necessary revolution is underway, a war has begun which the left is certain to lose.

[I]t’s just possible that the disturbances in Madison, Wisconsin mark what will ultimately prove to be a bigger turning point in world history.

In the heart of Blue State America, we are seeing a challenge to some of the fundamental assumptions behind the progressive state, and we could conceivably be watching both the birth pangs of a new social model and the first big step in America’s transformation into a true 21st century economy. …
The problem is that the way we do government in this country has to change — and it will have to change in ways that put the interests of those who don’t have government jobs ahead of those who do. The number of people employed by government is going to have to shrink; much more work will have to be done by many fewer hands — and many tasks historically done in government bureaucracies by life-tenured employees will be done by private sector workers employed by outside contractors. Nor can government workers enjoy pension plans and health benefits better than those widely available in the private sector; the days of defined benefit pensions for government workers are drawing rapidly to a close.

The Battle of Madison is part of a national struggle over the future of American society. The public sector unions and their allies believe in what I’ve called liberalism 4.0, the twentieth century’s dominant set of progressive ideas. It was the ideology of a society made up of big unions, big corporations and big government. The Big Three car companies, Big Three networks and the Big One phone company (back when AT&T had a legal monopoly on providing telephone service) were held in check by government regulation and union power rather than by free competition.

Technological change, global competition, and the rise of a more dynamic economy have wrecked the old social model, but old institutions, old habits of mind and old interest groups don’t disappear overnight. In many ways, public sector unions and government employees are the last great citadel of the Blue Social Model and what we see in Madison (as well as Ohio and Tennessee) is a way of life fighting for survival in the last ditch. We should not be surprised that the battle is fierce, the tactics ruthless, the polarization intense: this is not just a struggle between interest groups, it is a conflict over basic ideas about how the world does or should work.

Regardless of what happens in Madison this week, it is a hopeless battle. 4.0 liberalism and the Blue Social Model aren’t immoral and they helped many Americans enjoy roughly two generations of unprecedented prosperity — but they are unworkable in the contemporary world. States that don’t make the kind of changes that Wisconsin seeks will face the problems that loyally blue Illinois does now: staggering pension bills that undermine the state’s credit and cripple its ability to attract and hold business. An article in the New York Times, that bastion of blue thinking, mocks Illinois’ latest plan to pay its current pension bill with a $3.7 billion bond issue. Note reporters Mary Williams Walsh and Michael Cooper, Illinois “is essentially paying a single year’s bill by adding to its already heavy debt load. That short-term thinking is not unlike Americans taking out home equity loans to pay for cars and vacations before the housing bust.”

However much money the public sector unions fling into the maw of Democratic party politics, the old system is going down.

Hat tip to Bird Dog.

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Kimball Corson

The Democrats will and should loose this war. First, as a party, they suffer from all the disabilities I have identified elsewhere. Secondly, the consensus of economic analysis on the impact of unions is that they have raised wages across the board by about 25% on average, with the threat of unionization causing the increase in non-unionized areas. They have reduced the number of jobs available and increased unemployment. They have also reduced U.S. output by trillions of dollars over time, caused the U.S economy to become less competitive with other world economies and reduced the employed to population ratio significantly. While some have profited from unions, their overall impact has been strongly negative. Union gains come at the expense of non-union workers, consumers and businesses. Third, that said, I do not see that the Koch libertarian model is workable in America either or that the extreme right offers us a viable way. In part, I take this view because I am innately distrustful of aggregations of economic or political power. Also, American culture should never devolve into a corporate culture of any variety.



SDD

I’ve wondered if any of the teachers parading around in Madison are economics teachers. No matter how many union members you assemble, they cannot repeal the basic laws of economics. No matter how many congressmen you assemble to vote for that repeal, it won’t happen.
There are times when the law of gravity is also terribly inconvenient, but pilots have learned that cursing it is not a terribly practical solution.



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