Twilight of the Public Sector Union

Politico has an interesting piece today on the growing movement among Democrats to curtail public union clout. Like today’s WSJ editorial it focuses on Republican governor Bruce Rauner’s efforts to follow Scott Walker down the public pension reform path. What’s interesting is how many Democrats in state legislatures are waking up to the sustainability problem with the public union model.

In November Democrat Gina Raimondo won the Rhode Island governor’s race after a bruising primary where she defeated two union-backed candidates who were hell-bent on keeping the union reformer out of power. Raimondo is Rhode Island’s first female governor; just as importantly though, she is clear-eyed about the problem with public sector unions and unabashed about taking them on and demanding key reforms. Like every brave blue state Democrat trying to convince her left flank that reality is the obstacle standing athwart their collectivist dreams, Raimondo faces an uphill battle and is probably going to lose in the end. Such is life when facing off against the naked self-interests of a rabid and entrenched opposition.

Chicago Mayor Rahm Emanuel is nobody’s idea of a conservative, but he is fully aligned with Rauner in opposing the nasty Chicago Teachers Union, which needs corrupt legislators to rubber-stamp their collective bargaining scheme in the same way that humans need oxygen. Emanuel and Rauner are old colleagues, so the union left will say this is just more cronyism to fatten their own coffers by attacking unions. But any honest appraisal of Illinois politics will show that public unions exist first and last to expand the state bureaucracy, demanding always more money for pensions and benefits and higher taxes to pay for them. As a result, Illinois has the worst pension crisis of all the states and is considered a wasteland for business and economic growth. Neighboring Indiana and Iowa have so thoroughly outperformed Illinois this century that some Democrats in Springfield acknowledge the need for reform.

San Jose Mayor Chuck Reed offered an admirable sentiment after “clash[ing] with public employee unions” in California when he said that “there’s a difference between being liberal and progressive and being a union Democrat.” Is there really, though?

The hard truth that confronts the left is that they are not a viable political coalition without the millions of dues-paying public union members contributing millions to keep Democrats in office. At the federal, state and local levels, union leadership as well as the rank and file line up behind Democrats at astonishing rates. Take a gander at candidate contributions by federal bureaucrats (especially the lawyers) in the last presidential election. And what happens if the miracle occurs and Democrats abandon their corrupt union practices and admit that they are more responsible than anyone for the epidemic of blue state pension and budget fiascoes?  Do they go full retard and devote their entire political project to identity politics and the cultural fetishes of cloistered academics? I mean, I welcome it should it transpire, given that a politics that doubles and triples down on postmodern relativism and political correctness is a political movement not long for this world.

The only practical solution for the 21st century left is a complete re-think and overhaul of their approach to the economy. I am not confident or optimistic this will happen, committed as the left is to a religious conviction that they are constantly beset by a rigged system and the culprit is capitalism. Going back to the San Jose Mayor’s comment, I’m genuinely curious to learn what a liberal or progressive not in thrall to the romantic ideal of the trade union looks like. The left’s overriding ethos is that power and wealth are unfairly concentrated at the top, where “owners” exploit “workers” with their unearned capital accumulation. Marx was adamant that capital could only be accumulated through theft, and that impulse is alive and well with today’s left. The romance of the unions is all about leveling the field, sticking it to the fat cats via labor “solidarity,” strikes and bargaining power. It’s a zero sum philosophy with a cynical message: the wealth has been unfairly allocated to the rich few, thus the only recourse is to organize and plot to take back your rightful share. This line of thinking, beyond being juvenile and simple, betrays a fundamental lack of understanding of how market economies work. It obsesses over equitable distribution and is uncomfortable with the fact that life’s natural order is not fair. And it treats as obscene high profits and earnings, imagining that prosperity is best when it is shared; the point of politics then is to guard against unfairness wherever possible. That they fail to see how a system of perceived unfairness does in reality serve to foster the most broadly shared prosperity (see: America, The Unites States of) imaginable is a frustration we will likely have to endure forever.

Unless of course the left is forced into reconsidering its economic perspective by blue state voters sick of living in stagnant economies where insane percentages of state budgets are allocated just to public employees and their lavish benefits. 25% of Illinois’ budget is swallowed up union costs. TWENTY FIVE PERCENT! And yet the Chicago progressive mob is adamant that taxes must increase along with spending, a tune that never changes regardless of the fiscal climate. This is the kind of blind, tone-deaf, oblivious political thuggery that is going to doom the left eventually. The question is do they see the writing on the wall and are willing to make adjustments to their chief economic plank, or are they going down with the ship? By all accounts, union leadership is going to fight to the death to coax every last possible dime out of taxpayers before they shuffle off into the void, but there are more encouraging signs among rank and file members as well as savvy Democrats in the states. The problem is at the federal level, where public unions are less strapped by finite state budgets and reap the rewards of an out-of-control government spending apparatus. But even the big federal players like Afscme and AFT can see that reformer governors in blue states where unions typically enjoy broad approval are finding receptive audiences among state Democrats who realize the union model is unsustainable.

I contend that California will be a red state before Texas ever turns blue. Their pension crisis is not as horrible as Illinois’ but it ain’t pretty either. Chuck Reed and other California Dems (including Jerry Brown) may intuit the problem correctly, but it remains to be seen whether they have either the will or the ability to take on CALPERS and the rest of the bloated public sector. Far be it for me to offer advice to progressives on how to avoid squandering their entire movement, but if they want to be viable post-Obama they absolutely must ditch their wretched attachment to public sector unions and the cesspool of half-baked Marxism from which it draws inspiration. The only way that is ever going to happen is if they leave the politics of envy behind. Rising tides do indeed lift all boats, but if you’re consumed with rancor and envy and are convinced that America and capitalism are evil schemes constructed by greedy monocle-wearers, then it is going to be impossible to recalibrate your perspective on economics. Let’s let Schumpeter weigh in on the subject because no one has ever been able to explain this stuff quite like the Austrian master (emphasis mine):

In part [Capitalism] appeals to, and in part it creates, a schema of motives that is unsurpassed in simplicity and force. The promises of wealth and the threats of destitution that it holds out, it redeems with ruthless promptitude. Wherever the bourgeois way of life asserts itself sufficiently to dim the beacons of other social worlds, these promises are strong enough to attract the large majority of supernormal brains and to identify success with business success. They are not proffered at random; yet there is a sufficiently enticing admixture of chance: the game is not like roulette, it is more like poker. They are addressed to ability, energy and supernormal capacity for work; but if there were a way of measuring either that ability in general or the personal achievement that goes into any particular success, the premiums actually paid out would probably not be found proportional to either. Spectacular prizes much greater than would have been necessary to call forth the particular effort are thrown to a small minority of winners, thus propelling much more efficaciously than a more equal and more “just” distribution would, the activity of that large majority of businessmen who receive in return very modest compensation or nothing or less than nothing, and yet do their utmost because they have the big prizes before their eyes and overrate their chances of doing equally well. Similarly, the threats are addressed to incompetence. But though the incompetent men and the obsolete methods are in fact eliminated, sometimes very promptly, sometimes with a lag, failure also threatens or actually overtakes many an able man, thus whipping up everyone, again much more efficaciously than a more equal and more “just” system of penalties would. Finally, both business success and business failure are ideally precise. Neither can be talked away.”

-Joseph Schumpeter, Capitalism, Socialism and Democracy

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