Cato’s take on the Wisconsin Situation.

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The Critical Moment

Forget Egypt, Bahrain and Libya.  Of the memorable events in recent headlines, the showdown in Wisconsin may well be the single most important.  Precisely because the Democratic members of the Wisconsin senate fled the state while Democratic operatives and grass-roots radicals have flooded it, the undertaking by Gov. Scott Walker and the Republican legislators has come to showcase the central questions facing Americans today: what kind of nation have we become, what threats do we collectively face, and is there any way of avoiding a decline of both individual liberty and economic prosperity?

This is not to diminish the importance of similar efforts by other prominent reform governors, including Gov. John Kasich of Ohio, Gov. Mitch Daniels of Indiana and Gov. Chris Christie of New Jersey.  To the contrary, their efforts are equally as important.  Indeed, if you had to single out any one governor who largely deserves the fame (or notoriety) that he has gotten, you’d have to pick Gov. Christie.  He has led the way, and he did so at a time when the balance of political power suggested he was swimming upstream … with weights on.  But fate has made Wisconsin ground zero for this critical moment.

And make no mistake: it is a critical moment.  As many of Gov. Walker’s detractors have pointed out in the last week, while Wisconsin faces a significant budget deficit, it is nowhere near as serious and crippling as those facing other states – New York and California spring to mind.  Indeed, with very few exceptions, the several States are facing incredible, crushing burdens of debt – with even worse prospects on the horizon.  In fact, it is difficult to overemphasize just how potentially catastrophic those prospects are.  If you think that’s sheer rhetoric, then try to wrap your head around the trillions upon trillions of unfunded mandates and entitlements facing our federal and state governments.

This perfect storm is the result of many things, some short-term but most long-term.  For the last 80 years, the federal government has marched relentlessly towards an expansive, European-like entitlement state – and it has variously wooed, cajoled, manipulated and forced the States to march with it, dumping an increasing portion of the cost of these entitlements on the States as they went.  But even independent of the pressures placed by the federal government, many States have acted with growing recklessness during this same period, usually for perceived political gain.  The sanctioning of public unions in the 1950s through 1970s and beyond is among the most egregious of such acts, coupled with abject capitulation to union demands for grossly overinflated wages, health benefits and pension plans.  It should surprise no one that those primarily responsible for this are Democrats, who generally stand to gain the most from expanding union rolls and lavishing benefits on unionized workers.  But, as Gov. Christie recently pointed out, there was no shortage of Republican legislators and governors who went along with this effort … and at times even led the way.

Why would they do this?  There are several reasons.  First, many politicians perceived that by sanctioning public unions and giving large benefits packages to their workers, the politicians would assure themselves of a solid support base.  And while this is generally truer of Democrats, it is a calculation that many Republicans on an individual basis also made.  Second, during the prosperous postwar years following World War II, there was an assumption among many political figures of both sides of the aisle that American economic might and expansion was inevitable – a perpetual motion machine.  Therefore, even if public unionism would place a huge burden on the federal and state governments, it was an acceptable burden because the presumptively perpetual growth of the American economy would result in steady and increasing tax revenue, which would pay the bill.  In retrospect, such an assumption seems absurd, but it was an assumption that a great many held.  Third, even as experience increasingly suggested that the perpetual-motion machine did not exist and that serious problems lay on the horizon, many politicians made the self-serving choice to ignore long-term problems and continue to feed the beast.  After all, when the reckoning came, they would likely be in retirement themselves, and blame would fall on those political figures unlucky enough to be in office when credit dried up and the bills came due.  Ironically, some of the most profligate and irresponsible of these older political figures are held in high regard in some quarters and not a few of them (perhaps not coincidentally) have their names chiseled on federal, state or local public buildings.  But their truest monument is the debt they have left behind, without any pretension, much less plan, to do anything about it.

The clash in Wisconsin has arisen primarily because Gov. Walker and the Republican legislators of that state have made the fateful decision to reverse these three trends.  De-unionizing public workers diminishes the pressure on – and political rewards for – politicians to insulate public workers from the rest of the economy.  President Obama was right when he recently remarked that “public employees, they are our neighbors, they are our friends.”  Public workers are a vital part of the community, and there is no reason to demonize them as individuals.  But there is also no justification for insulating a portion of the community from that community’s shared sacrifices – to borrow the President’s rhetoric, that is not the behavior of neighbors or friends.  And, setting aside all the rhetoric, the actual sacrifices that Wisconsin public employees are being asked to make – requiring them to bear half the cost of their retirement and 12.5% of their health care premiums – are by no means draconian or outside the experience of the rest of American workers.  Only in recent days – notably, when faced with the loss of collective bargaining – did public union representatives indicate any willingness to make sacrifices.

And that is precisely why the reduction or outright elimination of collective bargaining rights for public workers lies at the heart of the present debate – and both sides know it.  For the Democrats and the unions, the goal is very simple: obstruct any real structural change, make only temporary concessions to garner sympathy by the viewing audience, wait for the political moment to pass and then go back to business as usual.  If this is what ultimately transpires in Wisconsin, it will be a grievous blow to any hope for fiscal sanity, irrespective of any token ‘concessions’ made by union bosses.  With the weapon of collective bargaining still at hand, any loss today can be regained tomorrow when the cameras have gone away.  After all, no politician blows a trumpet when he or she hands over irresponsible sums of taxpayer dollars to a preferred interest; it is done as quietly as possible.

Gov. Walker and the Republicans in Wisconsin therefore must hold fast.  In fleeing the state, the Democrats have taken the low road – a road, it should be emphasized, that is prohibited by the Wisconsin constitution.  And the pressure by homegrown and bussed-in union workers, professional Democratic activists, college students and labor radicals is designed to bring the state to its knees – demonstrating precisely why public workers should never have been permitted to unionize in the first place.

Importantly, it must be borne in mind that public unionism is fundamentally irrational.  And this author does not just mean irrational in the sense of exploding the States’ fiscs, as has been suggested above.  It is irrational in that it literally makes no sense under labor theory itself.  The rise of labor unionism in the United States began in the late 19^th century in conjunction with the growth of large-scale capitalist enterprise: the emergence of increasingly nationwide, integrated businesses possessed of vast sums of money and capable of exploiting economies of scope and scale.  Labor theory held that the rise of such large, privately-held economic might had to be offset by the emergence of collectivized labor – leading to the rise of some of the most prominent labor unions, such as the American Federation of Labor (AFL), the Congress of Industrial Organizations (CIO), along with many industry-centered unions, including the United Auto Workers (UAW) and United Mine Workers (UMW).  One does not have to agree with or support the rise of these unions, but their development at least makes a certain degree of historical and economic sense when taken in context.

The same is emphatically not true of public unions.  When representatives of the UAW sit down with their counterparts at the Ford Motor Co., both sides represent their own views and needs: crudely speaking, the views of labor are juxtaposed against the views of capital.  But this dialectic does not exist in the realm of public unions.  While there might be labor, there is no capital.  Instead, there are the taxpayers, whose interests at the bargaining table are supposed to be protected by political figures.  Yet, a large percentage of the political figures supposedly ‘bargaining’ with public labor unions are themselves the recipients of political action money given by these same unions.  Thus, instead of having representatives of the UAW jousting with Ford, where each seeks to obtain concessions while looking to their own fundamental health, you have a situation where representatives of the Wisconsin teachers union sit down with politicians, many of whom 1) have received political donations directly from the union, 2) make decisions irrespective of the good of Wisconsin as a whole, and 3) have, up to now, largely escaped any consequence because the debt crisis would happen on someone else’s watch.  Unionism only makes sense – even within labor theory itself – in the context of opposing privately-held capital.  Where labor faces off against taxpayers, particularly after seducing the supposed guardians of the taxpayers’ interest, what you have is an irrational and fundamentally corrupt system … with assured irrational and fundamentally corrupt outcomes.  Even Franklin D. Roosevelt, the champion and godfather of 20^th century unionism, famously observed that “[t]he process of collective bargaining, as usually understood, cannot be transplanted into the public service.”

So, the question in Wisconsin is whether such a system can be exposed for what it is and whether it can be changed through democratic, republican and constitutional processes.  Make no mistake: there is an awful lot at stake in this political moment.  This author will hazard to guess that, despite the present convulsions in the Middle East, very little fundamental change will occur there.  Ten years from now, we will still be remarking on corrupt and unresponsive Middle Eastern governments and the accompanying threat of Islamic radicalism and terrorism – yes, including in Egypt, Bahrain and Libya.  The question is whether we will also still be wringing our hands here at home regarding the need to address our debt crisis and roll back public unionism.  The answer had better be no, because we may well not have ten more years to fiddle while Rome burns.

— Cato

The author, Cato, is an historian and attorney who writes a monthly column for Theforgottenman.org.  In the proud tradition of revolutionary-era American pamphleteers, the author has adopted the pseudonym “Cato” in honor of Marcus Porcius Cato Uticensis, more commonly known as Cato the Younger, and most commonly known simply as Cato.  Cato was a statesman and orator of the late Roman Republic (95 – 46 BC) who was devoted to good government, tradition and integrity and was a sworn enemy of corruption and dictatorship.  The present author hopes to emulate his example.