Thursday, February 24, 2011

"Wisconsin - Tyranny by the Minority"

February 23, 2011

Thought of the Day
“Wisconsin – Tyranny by the Minority”
February 24, 2011

Erich Segal, in his novel, Love Story, had one character say, “Love means never having to say you are sorry.” Whatever the merits of that sentiment (and I disagree with it), Democracy does mean having to accept the outcome of elections. It means that we have to live with results that we may not like; because the people have expressed their will. If we don’t, why hold elections? In our democracy we are fortunate because if our party loses we know there will be another election that will provide an opportunity to attempt change.

The results of the election in Wisconsin were pretty clear, no matter whether one is a Democrat or a Republican. Governor Scott Walker won 52% of the vote versus 46% for the Democrat, Tom Barnett. Prior to November 2, Democrats controlled the State Assembly 50 seats to 45. After Election Day, the Republicans’ majority became 60 to 38. In the State Senate, Democrats lost four seats and Republicans picked up four; so that an 18-15 Democratic majority became a 19-14 Republican majority – in total, a sweeping victory. To borrow a line from President Obama, Republicans won; it is their responsibility to govern based on the platform on which they ran.

No matter one’s politics, it is preposterous to believe that a democracy can function when the losers decide to vacate the premises, as fourteen Wisconsin Senate Democrats did a week ago. Making a game of their life on the run, Senator Chris Larson, sounding sophomoric at a serious moment, was quoted in today’s New York Times: “It all feels very spylike. It’s almost like a reality TV show.” It is, however, understandable for the protestors in one state to enlist supporters from out of state to buttress their position. In politics, it is also considered fair to misconstrue the opposition, as both sides can play that game, but for an elected Wisconsin legislator to hide out in Illinois to avoid showing up for a vote makes a mockery of democracy.

Debt and union rights were the principal issues in the November elections. So it should have come as no surprise that Governor Walker decided to directly address those concerns, rather than kicking the bucket down the road, as has been the recent trend. Regarding unions, the new governor asked for a vote on some specific issues – limiting collective bargaining to just wages, in other words taking work rules and benefits off the table; requiring state workers to contribute half the cost of their pension contributions, and increasing from 6% to 12%, the amount of their healthcare premiums they would be required to pay. (Exempted from these provisions would be police and firemen.) Currently, workers in Wisconsin must pay union dues or lose their jobs and the state helps subsidize the collection by using its payroll system to collect those forced dues. Under Governor Walker’s proposal, the membership requirement would end, as would state collection of union dues.

Unions, as is well known, have declined as a percent of the workforce from 20.1% in 1983 to 11.9% in 2010, as private businesses have been forced to deal with the realities of competition, or fail. Only 6.9% of private workers are union members today, while 42.3% of state and local workers are unionized. As such, public workers represent the last power base for union leaders. The stalemate in Wisconsin centers around the issues of collective bargaining, membership requirements and the collection mechanism, as Republican’s success on those issues would serve to impair union power, thereby depriving Democrats of their largest source of cash. This fight strikes at the heart of their fund raising and of union power. It is understandable that emotions are elevated. Nevertheless, that does not legitimize, in my opinion, the evasion of duty by officials elected to watch over the welfare of the state they represent.

Like many states, Wisconsin is basically broke. Its current budget is $137 million in deficit. Its pension and healthcare assets assume a 7.8% annual return, leaving the state, according to Pew Research, with an unfunded pension plan of $252 million and $1.7 billion in unfunded healthcare benefits. For years governments have avoided the ultimate consequence of under-delivering what they have over-promised. It is possible that if markets and the economy continue to perform well the problem may again be postponed, but any postponement would only be temporary; for the deficits are growing inexorably. The legislation that created this untenable situation must be addressed. Wisconsin is a test case, in this time of ‘fessing’ up to debt obligations; it will demonstrate whether state officials will stand up for the voters or surrender to the tyranny of the minority. Nevertheless, I am not especially sanguine. History suggests that, in politics, brakes are usually applied too late to avoid a crash. I hope I am wrong.

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