On Wisconsin

by Dennis Sanders on February 19, 2011

I look at what’s going on in Wisconsin with mixed feelings.  The conservative, small government side thinks that its high time that public employees learn to make some sacrifices as states face financial problems.

But I’m also the son of two retired autoworkers who are also members of the United Auto Workers.  The UAW was as much a part of the background of my growing up years as was General Motors.  Unlike many Republicans, I do see the value of unions, especially private unions like the UAW.  For all their faults (and there are many), they did do a lot to improve the lot of working class folk in America.

But the labor movement isn’t perfect and shouldn’t be viewed that way, either.  Unions work for the interests of the workers- that in and of itself isn’t a problem.  But what happens when those interests get in the way of a more efficient way of running things, be it at a factory or in state government?

Contrary to what some bloggers are saying, this is not about mean Republicans going after innocent unions- or at least it isn’t totally about that.  Conservatives are partially correct that this is about budget issues, but they have made public sector unions the scapegoat, when they are but a symptom of a much larger problem.

What we are seeing is the first fight in what might be a long battle over a new social contract.  Walter Russell Mead describes it perfectly:

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.  And ironically, while Democrats are not, to put it mildly, happy with Governor Walker’s anti-public union bill, in the medium term the Democratic Party (and others who want to see government taking on more responsibilities) will be one of the biggest beneficiaries of the bill.

It is too soon to tell whether Governor Walker will get his bill through the Wisconsin legislature; as long as the beer and the waitresses hold out at the Tilted Kilt, the 14 embattled Democratic state senators can delay final passage of the bill — and they may even force the Republicans to negotiate over its provisions.  But with a similar bill moving towards passage in Ohio, and governors and legislators around the country looking for ways to cut state deficits, the foundations of the blue social model are shaking.

As Mead describes, we are seeing the limit of the American social welfare state- at least the 20th century version of it.  Back in the days when there was “big government, big labor and big business” it was easy to pay public sector workers lavishly.  But in these days of uncertainty and tight budgets, the social contract that supported these public workers is ending and the days of lush benefits are ending.

So what takes its place?  What’s the new social contract?  I don’t think we totally know yet.  We are still fumbling towards some idea.  Mead doesn’t say it, but he does worry about what he thinks the Tea Party would do:

The second strategy would be retrenchment.  This would mean reducing real wages throughout the economy: competing with the Chinese and other countries on the basis of low wages.  This would involve dismantling minimum wage laws, a full scale assault on private labor unions, and an aggressive deregulation of as much of the economy as possible.  The hope would be that in the long run enough investment would come into the country that we would get full employment and wages would gradually rise.  This is what many good-hearted Democrats think the Tea Party wants; in my view it is the wrong course for America.  We can never forget that America is about doing better: in the midst of the greatest explosion of technical knowledge and information since the dawn of time, our job is to help the world grow rich, not to tighten our belts.

And Megan McArdle warns that capping teacher pay, which is being proposed in Wisconsin, will have bad consequences:

On the one hand, freezing your salary bumps at CPI doesn’t seem like a great way to attract and retain the best workers; it seems like Wisconsin school districts will be at a competitive disadvantage with other industries and states.  On the other hand, those things are already collectively bargained, and bumping the wages of an entire class of people in order to attract a few more workers does not seem to be a very efficient way to go–indeed, it’s the basis of all those monopsony models of labor market failure.

Do Republicans have a compelling social vision?  Do they know how to run a smaller state without it being a “race to the bottom” as Mead says?

I think there are conservative thinkers out there that do have some idea of a new social contract.  That said, the conservative response to what is going on in the Badger State is more about politics than it is about a new way forward.  I have to think Governor Walker might have gotten farther at least trying to chat with public sector unions and spelling out the problem, before trying to wage war on them.

There is no question that the Democrats have to learn a new way to govern in this new reality.  Bill Clinton was 15 years too early when he said that the “era of big government is over.”  They way of governing that was part of the Democratic platform and the American fabric since the 1930s – that of large bureacracies- is fast ending.  Democrats have find new ways to govern to fit the era of smaller government.

But that means that Republicans also have to find a new way to govern.  George W. Bush was on the right track when he called for “compassionate conservatism.”  The current budget battles might be what they Tea Party wanted and indeed what America wanted, but Americans also want a government that gives a damn about their lives.  The way the GOP is acting might turn away some of the same folks that voted for them in November.

In a few days, the Battle of Madison will settle down.  But the battle for America’s future is just beginning.

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The Tale of Two Coffee Cups - Big Tent Revue
February 20, 2011 at 11:01 pm

{ 3 comments… read them below or add one }

Shay Riley February 20, 2011 at 12:34 pm

Dennis,

I guess we’ll continue to disagree about the role of government. The best way that government can “give a damn about my life” is to stay out of it as much as possible.

I’d also challenge your view that “compassion” can only (or primarily) be shown through government policies. Individuals have an onus to be compassionate about their own futures, and that of their relatives, and their communities without expecting other taxpayers to foot the bill for something that they’re unwilling to come out of their own pockets to do for themselves, their families, and their communities.

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Sheila Wiehl February 20, 2011 at 5:34 pm

I guess I am confused. Where was the compassion in the early 2000′s when people were making money, hand over fist? Those people would shake their heads and chuckle at the low salaries of teachers, and in the next breath say, “Well, you chose that profession.” They certainly weren’t willing to give up any of their money for the good of their communities. Now, when the bubble bursts, these are the same people to come running and screaming that teachers are overpaid. Where was their compassion when they were doing well?

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DonC February 20, 2011 at 1:39 pm

The Tale of Two Coffee Cups

40 years ago I went out and bought a coffee cup. The guy who produced that coffee cup in Ohio made a fair wage. The woman at the distribution center made a fair wage. The trucker who hauled it made a fair wage. The owner of the local hardware store made a fair profit. His clerk made a fair wage. That coffee cup, relative to inflation was fairly expensive, but back then, my life wasn’t oriented around consume, consume, consume … so I was happy with my coffee cup.

Yesterday, I went out and bought another coffee cup. I went to Walmart, because their prices are always the lowest … always. The woman at the highly mechanized cup factory in China was paid $1.50 per hour. Walmart has its own truckers and distribution network, with workers paid a substandard wage … to stay competitive. The helpful folks at my local Walmart also received a very modest wage … because there aren’t any other jobs in town that pay much better. They survive because their spouse is forced to work … also for a modest wage. They generally shop at Walmart because they can’t afford much more. The folks that do seem to be doing fairly well are the upper managers and stock holders at Walmart. They have enjoyed corporate and individual tax rates that haven’t been lower in the past 60 years. They also enjoy a nice array of loopholes to keep their net taxes rates surprisingly low. On top of all of this, those stockholders really like it if Walmart can continually decrease expenses, improve margins and show hefty profit gains, regardless of what the economy is doing. That’s called ‘being competitive’.

Let me ask you all … first, where do you think necessary tax revenues should come from in this 21st century economy? And secondly, which coffee cup do you really want to drink out of??

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