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Friday, May 11, 2012

Miscellany: 5/11/12

Quote of the Day 

If Congress can do whatever in their discretion can be done by money, 
and will promote the General Welfare, 
the Government is no longer a limited one, 
possessing enumerated powers, 
but an indefinite one, subject to particular exceptions.
James Madison

Blog Quote of the Day

Reason's Matt Welch's reflection on Democrats'/mainstream media's attack on "Tea Party extremism" Mourdock's resounding victory over incumbent Dick Lugar:
From where I sit, power still corrupts, and competition (especially of the political sort) is always a good thing. What I'd like to see more from Democrats is less condemnation of the tactic and more emulation. Who will be the first sitting Democratic senator tossed out in a primary election for supporting the drug war, Patriot Act, Guantanamo Bay, warrantless wiretapping and every new military intervention under the sun? And when that day of competition comes, will it, too, be dismissed as ideological extremism?"
Mourdock, a second-term state treasurer who won his reelection by 20 points in 2010, is hardly an extremist; Marco Rubio and Scott Brown are other veteran politicians whom garnered Tea Party support. Let us not forget the question of term limits is not a new one: it was one of the topics discussed in the original 1994 Contract with America and SCOTUS in 1995 overruled state-imposed limits for federal lawmakers. Dick Lugar has spent 36 years in the Senate (just like Joe Biden): it's enough.

Yes, power corrupts, but the interests of the people are subordinated to personal ambition and indulgent self-entitlement. Does it make any sense whatsoever, for instance, that Robert Byrd, Ted Kennedy, or Strom Thurmond served as long as they did? The final months of the former two in office were sad as they were in no condition to vote their states' interest.

My personal position on federal term limits (in an amendment to the Constitution)? From my standpoint a generation of federal legislative or judicial service is enough; I would like to see a more competitive political marketplace of candidates and ideas. I would like to see Presidents limited to a single term, senators would not be allowed to run consecutive terms, and Congressmen would be ineligible every third term; I would limit the term for any federal judge to 20 years.

Finally, I would have used some different examples (for Democratic challengers) than Welch's focus on the Bill of Rights and principles of nonintervention.  For example, what about monopolistic public education vs. a true education marketplace? What about union-backed mercantilist policies creating deadweight loss to consumers (e.g., rising costs because of manipulated scarcity of consumer goods through protectionist bans, tariffs, quotas, etc)? What about loose monetary policy stoking food and energy prices? Democratic challengers need to go beyond fidelity to progressive ideological talking points.

Shikha Dalmia / Reason, 
"Scott Walker Is No More Anti-Union Than FDR":
Thumbs UP!

A brief anecdote. as someone who had worked and graduated with his MIS PhD in Texas, my assistant professor salary at the University of Wisconsin at Milwaukee wasn't impressive (I knew professors at other colleges making significantly more), but after spending 3 years as a resident graduate teaching fellow making a few hundred dollars a month, I was in position to spend and save for the first time in years. I also found myself paying taxes--particularly state income taxes. That's only fair, I suppose, because I was a state employee. But after spending my adult life in Texas, with no state income tax, I went to a state that charged a higher rate than most. I was making small talk at some university social with a businesswoman or alumnus and expressed some surprise about how high state income taxes were. She actually looked shocked at my observation. She then went on to explain all the wonderful things the state did with the modest payment of my state income tax (the park system which I never used, etc.) I smiled and nodded, but I am a fiscal hawk and she hadn't sold me. Texas has some magnificent state parks as I knew from personal experience from camping as a Boy Scout.

Seeing the unions beat up on Scott Walker reminds me a bit of the late Jackie Kennedy's response to those Protestants objecting to JFK's Catholicism: "[JFK] was not a very good Catholic." Most of us with libertarian leanings are not anti-union (we believe in voluntary associations, including workers), but when we speak of government services, we are not talking about a free market in which labor shares economic risks. From a big picture perspective when government enters into a crony relationship with Big Labor, unions enjoy a type of protectionism, which artificially raises the costs of labor. For example, many public union contracts restrict the use of part-time workers or outside contractors at market prices (e.g., USPS); the public executive has the option of hiring a full-time employee that he doesn't need or use union contract mechanisms (e.g., very expensive overtime). In other cases, e.g., public teacher unions, we find restrictions against merit-based compensation or layoffs (or reducing the compensation or layoffs of more senior, costly teachers); other examples include union-negotiated protections of public employees accused of wrongdoing, including paid suspensions (while the government must pay the full burden of replacement workers). What government  (i.e., Democratic lawmakers or executives) gets in exchange is union promotion of tax-and-spend policies.

Let's recall the historical context. In 1935 Congress passed the Wagner Act (which established the nefarious National Labor Relations Board), whereby government intruded on the economic liberty of the employer and prospective employee to make a contract, forcing businesses to deal with unions under certain qualifying conditions (A business has to deal with the law of supply and demand in dealing with the costs of any resource, including labor.) Government was notoriously excluded from the get-go for reasons FDR specified in a 1937 letter to the National Federation of  Federal employees:
Meticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the government. All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations ... The very nature and purposes of Government make it impossible for ... officials ... to bind the employer ... The employer is the whole people, who speak by means of laws enacted by their representatives ...
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of government employees. Upon employees in the federal service rests the obligation to serve the whole people ... This obligation is paramount ... A strike of public employees manifests nothing less than an intent ... to prevent or obstruct ... Government ... Such action, looking toward the paralysis of Government ... is unthinkable and intolerable.
In 1958 NYC Mayor Robert F. Wagner, Jr. (yes, the son of Sen.Wagner (D-NY), whom sponsored the original act) opened the door to civil servant unionization in an executive order,  thinly-veiled pandering for union political support. In 1959, Wisconsin quickly jumped on the bandwagon, having the dubious honor of being the first state, a factor playing in last year's fireworks

Last year Scott Walker didn't address the larger issue of coercive unionism abuse; he has declined to follow Indiana Governor Mitch Daniels' lead in joining the 23 right-to-work states. (The Taft-Hartley Act, among other things, allowed states to prohibit union security clauses under their jurisdiction, i.e., requiring employers to fire employees not in the union, regardless of performance. What "right to work" means is that the decision of whether to join a union is up to the employee based on the intrinsic merits of union membership: he can't be fired for joining the union, and he can't be fired for refusing to join the union.) Scott Walker did do a measured application in terms of the public sector, allowing employees to decide whether to pay union dues, which of course outraged union leadership, afraid of losing their captive cash flow.

Scott Walker simply took non-wage collective bargaining matters (e.g., benefits and work rules) off the table--like forcing the public administrator to purchase employee health insurance not through a competitive bid process but as captive purchasers through high-cost union-affiliated companies. The controversial bill required modest employee contributions (5.8%) for pensions (largely unavailable in the private sector) and a hike in health insurance cost-sharing (to about 12.6%, almost half below the private sector cost share; the average family policy in Milwaukee cost about $26K). This health care savings to taxpayers from competitive bidding alone is projected to amount to almost $200M.

Another example of rumored unethical public employee game-playing at Wisconsin taxpayer expense (which the Wisconsin reform law attempted to address) was the manipulation of sick leave: for example, a healthy employee would call in sick for his regular time shift and then work the next shift for overtime pay.

Whereas last year's reform effort was a laudable first step--it certainly has moderated out-of-control state employee costs, Scott Walker in other aspects has hardly been a free-market trailblazer. State job growth has been sluggish compared to other states, he hasn't done nearly enough to make Wisconsin more business-friendly: Wisconsin is still a forced-unionism state and maintains a high tax-and-spend infrastructure. In fact, Walker recently "invested" $100M in distressed areas of Milwaukee (from a political standpoint this is puzzling because the move will win him few benefits in heavily-Democratic Milwaukee).

In fact, the federal government has had policies consistent or even worse from a union's perspective than what Scott Walker has led in Wisconsin. (Are we surprised by the fact that the unions are hypocrites in maintaining double standards between states and the federal government?)

Scott Walker needs to do more than he has to shrink the excessive government footprint hanging over the Wisconsin economy; does he deserve to win the recall rematch election next month with conventional progressive tax-and-spend Milwaukee mayor Tom Barrett? Of course. What's interesting is that despite one of the most explosive starts I've ever seen any governor go through in my lifetime, Walker has close to 50% approval (better than Obama nationally in many polls); Rasmussen earlier this week released a poll showing Walker up by 5 points. I would feel better seeing Walker over vs. at 50%. In the end, I think the taxpayers will acknowledge Walker's attempts to get costs under control, and the last thing they need is policy analysis paralysis and finger-pointing accountability at the Wisconsin state level.

Political Humor

"Yesterday President Obama came out in favor of gay marriage because his position has evolved. Then today he flew to George Clooney's house. So things are evolving a lot faster than we expected." - Conan O'Brien

[Obama got the idea from the Romney campaign. Romney had earlier explained to his GOP opponents that his conservative views had evolved over time. But none of his opponents believed in the theory of evolution...


Why did  Obama dither on gay marriage? Preservation of the species through same-sex coitus did not seem to reflect very intelligent design.]

"President Obama has come out in support of gay marriage. He said his position has been evolving for years. Miraculously, he saw the light just in time for tonight's big Hollywood fundraiser. What are the odds?" - Jay Leno

[Prior to the evening's festivities, Obama will sign copies of his new book, "I'm OK, Grooms Are Gay".]

Musical Interlude: My Favorite Groups

The Rolling Stones, "You Can't Always Get What You Want"