Wednesday, June 6, 2012

“Wisconsin Recall”

Sydney M. Williams

Thought of the Day
“Wisconsin Recall”
June 6, 2012

While Washington remains dysfunctional, an increasing number of state governments are addressing the root causes of the debt and deficit crises, the growing influence and costs of public sector unions, and the benefits proffered state employees, the costs of which exceed the ability of the people to pay. They are acting just in time. Unfunded liabilities for unionized state employee health and pension plans are estimated to be between $2 trillion and $3 trillion. The estimated discounted value for a typical unionized state employee’s retirement benefits is about $4 million, according to Wayne Allyn Root, Chairman of the Libertarian National Congressional Committee – an amount far in excess than is available to the average worker.

The 2010 midterm elections represented a backlash against government spending that had got out of hand; it was a victory that placed the general interests of taxpayers above special interest. This provides credence, at least to me, that we will in time address our problems. When all the votes were counted in November of that year, seventeen new Republican governors took office against seven Democrats. Of those Republicans, six scored victories in traditionally Democratic states – Florida, Maine, Michigan, Oklahoma, Pennsylvania and Wisconsin. Of the new Democratic governors, only one, John Hickenlooper in Colorado, took a seat in a state whose registration favors Republicans. Wisconsin’s vote yesterday solidified the reform movement. Governor Walker, becoming the nation’s only governor to survive a recall election, won by nine percentage points – a margin larger than his victory in 2010.

(Separately, two of California’s largest cities, San Diego and San Jose, passed pension reform packages yesterday.)

Even earlier, governors in Indiana, New Jersey, Virginia and Louisiana had begun the tough process of bringing fiscal order to overly indebted states. On the other hand, following the same old path, California and Illinois look to be at greater risk than ever – opting for a dosage of the ‘hair of the dog” that had done them in. The promising of benefits that society can ill afford is neither fair to those to whom we promise help, nor to the taxpayers who must pay. Alexis de Tocqueville, upon visiting America 175 years ago observed, “A democracy can only exist until the voters discover they can vote themselves largesse from the public treasury.” Over 100 years ago, George Bernard Shaw wrote, “A government that robs Peter to pay Paul can always depend on the support of Paul.”

Yesterday’s recall election in Wisconsin was a referendum on what is one of the greatest threats to democracies – the ascendancy of cronyism and special interests over the general interests of the people. It is a warning that dates back to Alexis de Tocqueville. In Wisconsin, it has manifested itself in the growing power of public sector unions and the devastating damage they have inflicted on taxpayers. In the main, union leaders were upset with Governor Walker for two decisions: One, he rescinded the right to collectively bargain for pension and healthcare benefits for state union employees, except police and firemen. Because unions spend enormous amounts electing candidates favorable to their cause, union leaders effectively sit on both sides of the bargaining table. The result has been very attractive, but unaffordable, health and retirement packages for union workers. Politicians are supposed to represent taxpayers – all taxpayers – but some politicians owe their office to the person with whom they are bargaining. The second decision was Mr. Walker’s ending of the state’s practice of automatically deducting union dues. Interestingly, but not surprisingly, when dues became voluntary union membership fell from 62,818 in March 2011 to 28,745 in February 2012, costing union leaders about $17 million – dollars that can no longer be spent buying elections, but instead will be saved or spent by the workers.

David Brooks wrote on Tuesday that he is “not a fan of the way Scott Walker went about reducing debt.” But he acknowledged that Governor Walker “did turn a $3.6 billion deficit into a $150 million surplus” with, he adds, “the help of a tax collection surge.” He neglected to point out that that is what happens when the proper fiscal policies are implemented. It is why supply-side fiscal policies do work.

Once again pollsters were surprised. Wisconsin’s election was expected to be close. It wasn’t. Many on the left will tend to trivialize Wisconsin’s election results, claiming it was due to inordinate amounts of out-of-state money. It is true that a lot of money was spent, much of which came from other states, but the turnout was one of the greatest ever in Wisconsin, or anywhere. In Madison, one of the nation’s most liberal cities, voter turnout exceeded 70%.

Special interests and crony capitalism have dominated our politics for a long time. It is a disease that infects both the right and the left. It is good to see that the nation’s voters, when presented with issues such as those faced by the electorate in Wisconsin, decide in favor of common sense. We can only hope that Washington will learn from the lesson that has rung out from the Badger State.


Elections have become increasingly expensive, which seems odd given an economy that continues to struggle. Participants from both sides of the aisle bewail the discrepancies in income and wealth between rich and poor, yet continue to provide an inexhaustible flow of money flows to what Thomas Sowell has called the greatest con artists of all time – politicians. It has been estimated that $63.5 million was spent on the Wisconsin recall election. Closer to home, on Monday evening I got caught in Manhattan’s traffic snarl as the President came to the big Apple for his 38th, 39th and 40th fundraisers in New York since becoming President – 26 more gatherings than did President Clinton in 1996. In the three meetings he raised an estimated $3.6 million. As I was sitting in traffic, I wondered why should I, as a New York City taxpayer, help pay for his fund-raising trips to New York? Should not the city assess his campaign for the cost of extra police and security, for the lost revenues at shops, taxis and restaurants inconvenienced by his appearance? My guess is that this trip cost taxpayers more than he raised.

What is true of Mr. Obama is also true for Mr. Romney. Should not cities that have to hire extra police or pay overtime and whose local businesses are disrupted be compensated by the campaigns? There is no question that when the President travels on matters of State, we taxpayers should pick up the tab, but campaigns are a different matter. If nothing else, such rules would likely greatly reduce the amount of money in politics.



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