The OccupyWallStreet & Related Protests

Is it just me, or does OccupyWallStreet look and sound like something out of a Tom Wolfe novel? Very much like Bonfire of the Vanities. The politicians and unions all lining up behind the scenes to attempt to maneuver for advantage. Major liberal media celebrities and unions are joining in. Even a few apparently risk-oriented House Democrats, like John Lewis and Frisco Nan.


But interviews with the  ordinary crowd members reveal no actual knowledge of what the movement's/event's objectives and demands actually are.


Never the less, some Democratic Congressmen, and even Wonderboy himself speak of common cause with the anarchic crowd.


What disturbs me is that the movement's public calls to echo Egypt's grassroots democracy overlooks the fact that the US has a standing Republic form of government with freely-elected representatives and president.


This entire event seems to be little more than an attempt by the far left to try to take government out of the existing Constitutional institutions and put it into the street, because they don't like the fact that voters rebuked the Democrats last November by cutting their Senate majority and returning the House to GOP control.


It's as if, having had all three key elements of legislation- House, Senate and White House- for two years, they aren't satisfied with the results. So they simply intend to overthrow the Constitutionally-mandated process of federal government by sitting in on Wall Street and elsewhere in major US cities.

To better understand how skewed and out of touch with reality the movement's supporters are, here's an editorial from the weekend Wall Street Journal by SEIU's president, Mary Kay Henry, entitled Why Labor Backs 'Occupy Wall Street.' I've helpfully highlighted Henry's contentions which are seriously at odds with the truth, in red.

"The images of row upon row of stoic airline pilots, fed-up students and thousands of Americans marching through downtown Manhattan have captivated the nation.


Seemingly overnight, the organic, scrappy protests in the financial center of the world have blossomed into a national movement from Chicago to Los Angeles, calling attention to the gross inequality in our society and the unwillingness of our politicians to correct this imbalance.


The Occupy Wall Street actions are a potent example of what is happening across our country as the anger and frustration of ordinary Americans builds. While the media and pundits obsess over what the Occupy Wall Street protester's want, the protesters have already succeeded in shaking our conscience as a nation and forcing a national conversation about everything that is wrong with our economy.


The hard truth is that things are pretty lousy for most Americans right now. And while students, seniors and workers didn't cause our economic collapse, we're the ones paying the price.


It's been three years since Wall Street CEOs crashed our economy. When Wall Street was on its knees, the American taxpayers came to their rescue with trillions of dollars in bailouts and promise from the big banks that they'd invest in our recovery.


Instead, the banks used our hard-earned tax dollars to enrich themselves. They robbed millions of Americans of their jobs and their livelihoods. They refuse to invest in the small businesses that drive America's job creation and growth. And they continue to kick us while we're down by foreclosing on millions of families.


Today, the richest 5% of the population holds 72% of the wealth in our country. We have 25 million Americans looking for full-time work. And those Americans lucky enough to have a job have seen their hours slashed and their benefits cut. I recently met a worker in Chicago who told me he's been forced to feed his family by foraging for food in the dumpsters behind the grocery store by his house. Not because he's out of work but because his hours had been cut back and there simply wasn't enough money to keep a roof over his family's head, pay the electric bill, and put food on the table every night.


We have an entire generation of young people who were promised good jobs if they worked hard, played by the rules and attended college. They kept their end of the bargain and when they graduated they were left with no job prospects and a record amount of debt.


Americans watched in horror this spring as Republican politicians held our country hostage during the debt-ceiling debate to win harmful cuts to our communities and more tax breaks for millionaires. And this week House Speaker John Boehner and Majority Leader Eric Cantor again turned their backs on the American people by refusing to even bring the American Jobs Act up for a vote.


The anger of the American people has been brewing for quite some time, and now that it's boiled over there's no bottling it up. The importance of Occupy Wall Street can't be measured by any set of demands. What's more important to understand are the values that unite the protesters and their authentic understanding of what has gone wrong in our economy.


We can begin to right the wrongs of our economy and respond to the growing demands of the American people by putting our country back to work and by holding Wall Street and big corporations accountable for the damage they've inflicted on us all.


When Nobel Prize-winning economist Joseph Stiglitz was asked what one demand on Washington the Occupy Wall Street protesters should make right now, he didn't hesitate a moment before saying: create jobs.


We can't begin to fix what is wrong with our economy without creating good jobs. We have work that needs doing in this country and millions of Americans looking for full-time work. It's time to put the two together to make America a stronger nation. And it's time to use the money being made on Wall Street and in corporate boardrooms across the country to put Americans back to work.


Congress can begin by passing the American Jobs Act and immediately put Americans to work rebuilding our outdated and dangerous roads and bridges and ensuring our kids have first-class schools. We can invest in our communities to keep teachers in our classrooms, police on the beat, health-care workers at our hospitals and clinics, and ensure that we have enough firefighters to protect our communities.


The 2.1 million nurses, janitors, school-bus drivers and other members of the Service Employees International Union stand arm in arm with the peaceful Occupy Wall Street protesters. While unions cannot claim credit for Occupy Wall Street, SEIU members are joining the protesters in the streets because we are united in the belief that our country needs a change.


Nobody can predict what's next for the Occupy Wall Street movement. And no one institution or person should try to exert their pressure on this inspiring collective of people.


The importance of the Occupy Wall Street protests lies in the simple fact that all it takes is a small group of courageous people to light a spark and forever change the arc of history. The auto workers in Flint, Mich., lit that spark in the 1930s through their sit-down strikes and forever changed American industry. The civil-rights activists lit that spark when their sit-ins forced us to confront the racial inequality that poisoned our nation.


We saw that spark in Tahrir Square and across the Middle East this Arab Spring as a few brave people inspired millions of fed-up citizens to challenge their governments and demand better lives. It's what I've witnessed for the past 30 years as a union organizer watching working people stick their necks out and stand publicly for a union to win a chance at a better life for themselves and their families.


And it's what countless Americans see in this growing Occupy Wall Street movement. They see the opportunity to restore the very American notion that each of our citizens deserves a shot at reaching his or her own dreams, of finding a good job, and leaving the next generation better off.


The people are finally speaking. Now it's up to our leaders and CEOs to listen and respond."


I won't refute those highlighted passages point by point. Suffice to say:

-"Wall Street CEOs" did not "crash" our economy. For that, thank Barney Frank, Kent Conrad, and Chris Dodd for pushing Fannie and Freddie to guarantee low-doc, no-doc, low-quality mortgage loans.

-To my knowledge, banks were told to take TARP money, and no managements signed papers agreeing, in exchange, to loan money to questionable businesses at near-zero rates.

-Borrowers of money for mortgages who don't continue to pay those loans knew they'd be in default. They are adults, not children. Nobody 'robbed' them then stole their homes.

-The best, though, is this howler:

"We have an entire generation of young people who were promised good jobs if they worked hard, played by the rules and attended college. They kept their end of the bargain and when they graduated they were left with no job prospects and a record amount of debt."

I can't recall, when I was in college, anyone promising me a "good job" if I worked hard, graduated, whatever. This is a union boss' view of the ideal America- not reality in a free-, or even mixed-market economy.

-Then Henry simply states that it's time to be socialist and forcibly take public company capital for employment, against the shareholders' wills, in the economy as government sees fit.

Of course, that last bit is sort of what Wonderboy & Co. have done with Stimulus I and II (the latter a/k/a The Jobs Act), only instead of taking corporate money directly from those firms, they just borrowed it from China and spent it, expecting to get it through higher taxes on corporations and the wealthy.

-Henry also confuses the early-mid years of American unionism with some sort of utopia, when it was, in reality, an unsustainable money grab in some then-key industrial sectors. One way they 'changed American industry forever' is drove some of it into bankruptcy, taking the union pensions with them, while driving others offshore.

Good job, Mary Kay!

- How about this passage, dripping with entitlement-speak:

"that each of our citizens deserves a shot at reaching his or her own dreams, of finding a good job, and leaving the next generation better off."

What is to prevent anyone from that shot now? Go talk to Herman Cain. Sometimes you have to make your job, rather than sit still while others hand it to you.

Perhaps if some of Mary Kay's precious union workers hadn't spent so much of their high, unionized wages on vacation homes and pickup trucks, while living lifestyles that caused them to require so much expensive medical care later in life, they'd be in better financial shape to weather the current environment. Perhaps not taken on housing debt they couldn't afford.

This is America, folks. Nobody promises you the good life. You have to earn it.

Come to think of it, maybe I have the wrong Tome Wolfe novel. Maybe the appropriate one to cite is much, much older than Bonfire.

Anyone remember Radical Chic and Maumauing the Flack Catchers?

Wonderboy's Rose Garden Speech This Morning

If you happened to catch Wonderboy's Rose Garden appearance this morning to formally send his jobs bill to Congress, you saw vintage campaigning. As well as the man's continuing tin ear/eye when it comes to what concerns the bulk of the nation's voters.

I, of course, turned the volume off. But I saw and heard enough to understand that this morning's carefully-staged event was classic Wonderboy.

He again urged, in contravention of the separation of powers, that Congress simply rubber stamp his bill, with no debate nor changes.

But the visuals were the clue as to how the First Rookie continues to view his mission. Behind him were arrayed, in uniform, all manner of public sector union employees- teachers, firemen, police, etc. The message being, you in the states don't have the right to decide whether to keep or dismiss public union employees. Or to choose to borrow to continue to fund them.

No, the federal government will unilaterally borrow the money for you, then give it to you, provided you continue to employ these public sector union personnel.

Meanwhile, the other spending in his jobs bill is essentially for other union members- those in the construction trades. And at high, Davis-Bacon Act rates, mind you. So you, the taxpayer, will pay the highest amount of money possible to construction workers, thus getting the smallest amount of value for the road, bridges, sewer systems, etc., built with your borrowed dollars.

Wonderboy clearly doesn't care what most voters think of his explicit bias toward union members. Or that he's demanding a second...or third...fourth....how many now?....round of stimulus spending to transfer your tax dollars to favored public and private sector union members.

Interesting how totally insensitive he is to the lesson of last November and the basic complaints of Tea Party members and their kindred voters- that the federal government usurps too much power and money.

Judging by his bill, and his little visual display in the Rose Garden this morning, the First Rookie clearly doesn't care what the bulk of America's voters think of his prejudices.

Regarding Union Dues and Beck

In response to this recent post regarding Boeing vs. the NLRB, one of my readers, Luke, wrote two comments:


"I'm not sure if you were being sarcastic: "I wasn't aware that Boeing's engineers were unionized." The implication being that they aren't...you should know that yes, most of Boeing's engineers are unionized, and I'm one of them. Not by choice of course."


"Well officially I am a "Beck Objector," so I am officially a member but I pay a reduced union fee (supposedly the percentage that they spend on political action). Make sure your teacher friend knows of that right!"


Funny you should mention the Beck excecption. I did mention it to my friend who, on first hearing, was surprised. However, as I repeated what you wrote, he cut me off dismissively and related the following.

If a teacher approaches his union representative to request a Beck-based reduction in dues deducted from his check, he is warned that, although it is his right to do so, if he does, and he is sued by the school, district or any parents, the union will let him hang alone and not lift a finger to protect him.

Nice, huh?

Being a teacher in a public school, it's no stretch to see him being the target of some lawsuit. Who knows, perhaps other unionized teachers could facilitate some parent or the school bringing suit, just to make an example of any teacher foolish enough to try to stiff the union on its legal extortion...... errr.....dues?

Pure union intimidation and coercion. So much for Beck and the niceties that Congress thinks it has legislated on behalf of union employees who it wrongly believes are beyond the reach of union thuggery.

Nikki Haley's WSJ Editorial

I thoroughly enjoyed South Carolina Governor Nikki Haley's recent editorial in the Wall Street Journal concerning the NLRB's vote to prohibit Boeing from operating its second 787 Dreamliner production line near Charleston.

Since South Carolina is a right-to-work state, Haley's perspective was refreshing. She was blunt in assaulting unions for curbing her state's citizens' rights and interfering in the direct relationship between employer and employee. Further, she blasted Wonderboy for allowing the NLRB's vote, arguing correctly that it sends an intimidating signal to every private enterprise in America.

With America's tepid economic recovery from the failed Keynesian policies of this administration, Haley's charges ring true and hopeful herald a robust, effective GOP attack which will remove the current occupants from the White House come early 2013.

Karl Rove On The Midwest Governors & Collective Bargaining Repeals

I actually received a comment from a Hoosier on yesterday's post. It's refreshing to know that my sentiments are shared by those enduring such behavior by their state legislators.

On this general topic, Karl Rove wrote an insightful piece in his weekly Wall Street Journal column. He noted that, thanks to Scott Walker's being the first Midwest governor to move decisively to pass public union-limiting legislation, Wisconsin drew all of the attention.

Thus, Ohio's John Kasich was able to propose and have passed much more sweeping legislation with comparatively little publicity. Rove, with his ability to focus on operational details, essentially contends that the public unions, on a national basis, can't support two full-fledged opposition campaigns at once. Thus, while Walker of Wisconsin bore the brunt of the public attention, Kasich of Ohio was able to get Ohio's legislature to enact its public union-limiting laws almost unnoticed.

Rove alluded to something else that, being Illinois-born, I can confirm, and have in prior posts. Whereas Illinois, Iowa, Indiana and Ohio can fluctuate between parties and conservative/liberal leanings, the upper Midwest states of Minnesota and Wisconsin are different. They've always had a much more prominent, distinct quasi-socialist left which reacts differently than the normal Democratic parties of the lower Midwest states. Thus, it's not all that surprising that Wisconsin's teachers' union acted out so brazenly during their walk-off.

Even now, as my reader commented, Indiana is in the spotlight for right-to-work legislation, having already limited public union collective bargaining by governor Mitch Daniels' executive order several years ago.

You might even consider that union leaders, too, chose Wisconsin as the relatively softer target, since they didn't switch their focus to Ohio when Kasich began his efforts to limit public unions.

Public Sector Union Bosses & Pensions: Who's To Blame?

I've long contended that much of the mess experienced by both private and public sector union members in America with respect to deferred, defined-benefit pensions are largely the result of poor union leadership.
For example, in this post from late 2005, the second one on my business blog, I wrote,


"Two major US airlines filed for bankruptcy protection this week- Northwest and Delta. In the former case, their machinists union is already on strike.



What I find ironic is that, while so much of this week’s, and many prior years’ focus, is on union leaders squaring off against company managements, nobody has bothered to ask how it is that the unions got themselves in this mess in the first place?


Why did unions ever begin taking future pension contributions from the companies for which their members worked, instead of cash compensation?


Why is this relevant today? For two reasons. First, it’s the private sector version of the social security mess. What makes sense and works here should inform our solutions for social security. Second, it should inform labor’s current choices and negotiations, so as not to make the same mistakes twice. Especially now, in the airline and automobile manufacturing sectors.



Where is the expose on the union leaders who foolishly negotiated, on behalf of their members, to accept unsecured IOUs from companies on terms that the companies’ banks would never have lent them the money?"

I have a friend who is a public sector teacher. He and I have been discussing this topic frequently over the past year- since Chris Christie was elected governor of New Jersey.


Last week, we had another conversation sparked by the events in Madison, Wisconsin. He had been talking with a retired local police chief, apparently who is without his full pension, who groused that the mayors and other locally-elected politicians who promised defined-benefit pensions which are now underfunded should be tried and imprisoned for their criminal fraud.

I replied with my now years-old belief that his own union leaders should join those local officials in the hoosegow. I asked why his union leaders allowed the state and towns to offer deferred, defined-benefit pensions? He didn't know.

When I asked, he admitted he doesn't know how much his union boss in Trenton makes.


He initially argued that the teachers' union boss didn't know the promised pensions were not being fully-funded, but I pointed out that he'd told me he knew that Christie Whitman borrowed from the fund over a decade ago. Surely, his union chief knew that, as well. And that the state of New Jersey hasn't been fully-funding its pension obligations for years.

Why, I asked, did he continue to vote for his union chief?

He then suddenly gushed that he'd always wanted to be a teacher. That in order to teach, he had to begin in the public system. That meant joining a closed union shop, i.e., joining the teachers' union local. And voting for whomever was put on the ballot to head it. He didn't feel he ever had a choice. And wasn't happy about it.

I replied that, by remaining a public system teacher, he's pretty much made his choices. He offered explanations as to why he didn't apply to teach at one of the well-regarded, well-paying large private schools in the area. But each time, I countered his arguments. Essentially, he was so used to a guaranteed unionized job in the public school system that the specter of venturing out into the private education sector posed too much uncertainty.

He said you had to 'know someone' to get hired at one of the best local private schools. But that's not true. He's chosen special education.

Too bad, during his 25-year career, when he completed several other Masters' degrees, he hadn't observed what I saw as far back as 1979, i.e., science and math teachers vacating their jobs to join technology firms.

For at least the last 15 years, which was sufficient time for my friend to earn a BA in Mathematics or a BS in some science field, there have been constant openings in good local private schools. One which my daughters have attended has had a perennial opening for either a middle or upper school math teacher for the last six consecutive years. It became so bad a decade ago that the school was hiring young teachers right out of college to teach upper school science. That's how it became embroiled in a scandal when the 25-year old male science teacher was apprehended having sex with underage students.

Most recently, the same school hired a retired local public school math teacher.

My friend wouldn't have had to know anyone, had he simply chosen to pursue a career teaching math or science locally in a private school.

The current pension problems in the public sector in New Jersey are certainly at least half the fault of the union bosses who agreed to those terms.

When my friend complains that he had no choice, and couldn't get a job in a private school, without making sacrifices or taking risks, I say,

"Welcome to the real world. The business world that the rest of us taxpayers face all the time."

Wonderboy & The NEA

If you haven't seen this recently-aired commercial yet featuring Wonderboy and his NEA pals, it's well worth a view.

This pretty much eliminates any question that the First Rookie is anything but a post-partisan political hack. And that the NEA is run by bosses who don't care about teaching kids, or even the hard-working, dedicated teachers who pay them. They only care about raw political and financial power.

How Words Matter In the Wisconsin Public Sector Union Standoff

It's funny how often we let terms be used in ways that color debate without realizing it.

The most famous one, of course, is when liberals call those with pro-life sentiments "anti-abortion." By using the 'anti' prefix, liberal media outlets give a negative slant to those wanting to protect the unborn simply by the choice of the term they use to label them.

Similarly, without really thinking about it, most media outlets refer to public sector unions in Wisconsin, and their allies, as protesting for their collective bargaining "rights." When you call it a "right," images of the Bill of Rights loom.

It becomes sacrilegious to strip someone of a "right."

But in last Monday's edition of the Wall Street Journal, Harvard economics professor Robert Barro wrote an editorial entitled Unions vs. the Right to Work. It was a very clever and inspired reminder of that other labor "right"- the "right to work," meaning that in such a state, an employee many not be forced to join a union or pay dues-like fees. There are no "closed shops" in right to work states.

Barro writes one line that really says it all-

"Collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty."

And, he adds,

"In fact, labor unions were subject to U.S. antitrust laws in the Sherman Antitrust Act of 1890, which was first applied in 1894 to the American Railway Union. However, organized labor managed to obtain exemption from federal antitrust laws in subsequent legislation, notably the Clayton Antitrust Act of 1914 and the National Labor Relations Act of 1935.



Remarkably, labor unions are not only immune from antitrust laws but can also negotiate a "union shop," which requires nonunion employees to join the union or pay nearly equivalent dues. Somehow, despite many attempts, organized labor has lacked the political power to repeal the key portion of the 1947 Taft Hartley Act that allowed states to pass right-to-work laws, which now prohibit the union shop in 22 states. From the standpoint of civil liberties, the individual right to work—without being forced to join a union or pay dues—has a much better claim than collective bargaining. (Not to mention that "right to work" has a much more pleasant, liberal sound than "collective bargaining.") The push for right-to-work laws, which haven't been enacted anywhere but Oklahoma over the last 20 years, seems about to take off."


Thus, lest you fall victim to the clever uses of the phrase 'collective bargaining rights,' think about that other 'right'- to work. Barro goes on to set the current standoff in context, then offer some empirical evidence that right to work laws are generally better for state economies,

"The current pushback against labor-union power stems from the collision between overly generous benefits for public employees— notably for pensions and health care—and the fiscal crises of state and local governments. Teachers and other public-employee unions went too far in convincing weak or complicit state and local governments to agree to obligations, particularly defined-benefit pension plans, that created excessive burdens on taxpayers.There is evidence that right-to-work laws—or, more broadly, the pro-business policies offered by right-to-work states—matter for economic growth. In research published in 2000, economist Thomas Holmes of the University of Minnesota compared counties close to the border between states with and without right-to-work laws (thereby holding constant an array of factors related to geography and climate). He found that the cumulative growth of employment in manufacturing (the traditional area of union strength prior to the rise of public-employee unions) in the right-to-work states was 26 percentage points greater than that in the non-right-to-work states."

That's evidence you won't hear from Richard Trumka or the left-leaning media covering the Wisconsin story. But it goes beyond that. It's a matter, as I've written before regarding Reagan's one major failing, of cementing longlasting conservative changes. To this end, Barro observes,


"In recognition of this fiscal reality, even the unions and their Democratic allies in Wisconsin have agreed to Gov. Scott Walker's proposed cutbacks of benefits, as long as he drops the restrictions on collective bargaining. The problem is that this "compromise" leaves intact the structure of strong public-employee unions that helped to create the unsustainable fiscal situation; after all, the next governor may have less fiscal discipline. A long-run solution requires a change in structure, for example, by restricting collective bargaining for public employees and, to go further, by introducing a right-to-work law.




In general, the most likely arenas are states in which the governor and both houses of the state legislature are Republican (often because of the 2010 elections), and in which substantial rights for collective bargaining by public employees currently exist. This group includes Indiana, which has recently been as active as Wisconsin on labor issues; ironically, Indiana enacted a right-to-work law in 1957 but repealed it in 1965. Otherwise, my tentative list includes Michigan, Pennsylvania, Maine, Florida, Tennessee, Nebraska (with a nominally nonpartisan legislature), Kansas, Idaho, North Dakota and South Dakota.



The national fiscal crisis and recession that began in 2008 had many ill effects, including the ongoing crises of pension and health-care obligations in many states. But at least one positive consequence is that the required return to fiscal discipline has caused reexamination of the growth in economic and political power of public-employee unions. Hopefully, embattled politicians like Gov. Walker in Wisconsin will maintain their resolve and achieve a more sensible long-term structure for the taxpayers in their states."


The past few weeks have seen many impassioned fixtures of the left- Howard Dean and Wonderboy, for example, lamenting Scott Walker's objective as if certain inalienable 'rights' are being removed from Wisconsin's teachers. But Kim Strassel's widely-hailed editorial two weeks ago in the Wall Street Journal noted that Jimmy Carter signed legislation forbidding federal unions to bargain collectively over any major aspects of their contracts.

Not only will Wonderboy be further embarrassed by this, the more he weighs in on Wisconsin, but it also completely undercuts this false argument used by so many liberals that Walker is doing something positively un-American.

Why Public Sector Unions Are Different Than Private Sector Unions- Part 2

Last Friday I wrote this post, which I intended to be fairly comprehensive. But, more recently, I wrote this post on my companion business blog, and realized, as I composed it, that I omitted an important dimension of the public-private sector union differences in that first post.


It became apparent when I wrote this in the more recent post,


"With the rise of hostile takeovers and raiders taking their targets private, or into Chapter 11, many more businessmen learned about the PBGC. The Pension Benefit Guaranty Corporation is the federal agency which is charged with administering the failed, under-funded pensions of bankrupt firms.



The truth is, the private sector has seen, for some thirty years, a series of sectors experience bankruptcies which dumped underfunded pension plans onto the PBGC. At the same time, many other companies switched to defined-contribution plans, terminating their defined-benefit plans and putting the resulting lump sum into the former.


In short, private industry has learned, over the past three decades, that the defined-benefit pensions are, for the most part, illusory and unworkable.


What's happening now is that public sector employees are discovering the same truth. The major difference, however, is that because state and local governments foolishly agreed to these plans, the public sector unions have, as a counterparty, an entity that cannot, as easily as a private sector company, declare bankruptcy and subsequently renegotiate the pension obligations."


From a political perspective, that last paragraph is a gross understatement.

In past decades, when steel, railroad, airline and other heavily-unionized firms finally buckled under the weight of pension and labor costs, they filed for bankruptcy. Pension plans went to the PBGC funded as was.

Simply put, contracts between parties became settled, in breach, in bankruptcy courts. If unions and their members foolishly pushed too hard on a company and helped it become uncompetitive and, ultimately, unprofitable, then they bore the consequences in the form of unmet financial obligations.

Companies are born, and die. Relying on a private enterprise for long term financial obligations is, at its root, risky business.

But making your employment, pension and health care contract with a town, city, county or state is a different matter. Having it written into a state's constitution? You're in clover.

That's why public sector union rights such as collective bargaining are so pernicious and dangerous. When a private company goes bankrupt, it's not news.

But we bridle at towns and states filing for bankruptcy. Cloaking financial promises in the authority of local or state government means that your counterparty risk is much lower than if your employer is a private entity.

I don't know if AFSCME, NEA and SEIU leaders fully understood this thirty years ago, but by the time steelworkers were losing their pension and healthcare benefits, I'm pretty sure they did. Then it was full speed ahead.

Because when they combined the now-commonly understood virtuous- for union leaders- cycle of having state and local government deduct union dues from paychecks and pay them directly to union bosses, who then funded election campaigns of union- and government-spending-friendly candidates, who then created more government (union) jobs with this special counterparty status, it was organized labor heaven.

Notice that nobody is removing the right of a union to collectively bargain on wages. What the Midwestern Republican governors and legislatures want to remove is collective bargaining on work rules and the non-wage and benefit terms which add so much to the cost of public sector administration. For example, Ohio Governor John Kasich noted that a town had to terminate 27 lower-ranked policemen in order to fire a sargeant.

So, take a step back and look at how public sector unions are different in this regard. They don't negotiate with a counterparty which, when overburdened with the onerous costs of the public sector unions' demands, can and will easily just vanish, leaving the union employees out of pocket. No, they are dealing with governmental entities which either can't, or can only with great difficulty declare bankruptcy.

It's a very special situation in which the union and its employees bear very little risk for pushing their demands to the extreme, without a logical counterweight to stop them.

That's why we need to eliminate collective bargaining powers- they aren't rights in the first place- for all public sector union employees.

Why Collective Bargaining Matters

Most of us think of collective bargaining by public sector unions as mostly affecting staffing. The term "featherbedding" comes to mind. And remarks like those of newly-elected Ohio Governor John Kasich last week on Fox News, to the effect that attempts to fire a police sargeant required getting rid of 27 lower-level officers first.

However, in his recent Wall Street Journal editorial, Oh, To Be a Teacher in Wisconsin (How can fringe benefits cost nearly as much as a worker's salary? Answer: collective bargaining.), Robert Costrell, professor of education reform and economics at the University of Arkansas, explained other unimagined consequences.

Here is his editorial in its entirety:


The showdown in Wisconsin over fringe benefits for public employees boils down to one number: 74.2. That's how many cents the public pays Milwaukee public-school teachers and other employees for retirement and health benefits for every dollar they receive in salary. The corresponding rate for employees of private firms is 24.3 cents.


Gov. Scott Walker's proposal would bring public-employee benefits closer in line with those of workers in the private sector. And to prevent benefits from reaching sky-high levels in the future, he wants to restrict collective-bargaining rights.


The average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools. When I showed these figures to a friend, she asked me a simple question: "How can fringe benefits be nearly as much as salary?" The answers can be found by unpacking the numbers in the district's budget for this fiscal year:


•Social Security and Medicare. The employer cost is 7.65% of wages, the same as in the private sector.


Public employee protests spread across the Midwest.


•State Pension. Teachers belong to the Wisconsin state pension plan. That plan requires a 6.8% employer contribution and 6.2% from the employee. However, according to the collective-bargaining agreement in place since 1996, the district pays the employees' share as well, for a total of 13%.


•Teachers' Supplemental Pension. In addition to the state pension, Milwaukee public-school teachers receive an additional pension under a 1982 collective-bargaining agreement. The district contributes an additional 4.2% of teacher salaries to cover this second pension. Teachers contribute nothing.


•Classified Pension. Most other school employees belong to the city's pension system instead of the state plan. The city plan is less expensive but here, too, according to the collective-bargaining agreement, the district pays the employees' 5.5% share.


Overall, for teachers and other employees, the district's contributions for pensions and Social Security total 22.6 cents for each dollar of salary. The corresponding figure for private industry is 13.4 cents. The divergence is greater yet for health insurance:


•Health care for current employees. Under the current collective- bargaining agreements, the school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. These plans are extremely expensive.


This is partly because of Wisconsin's unique arrangement under which the teachers union is the sponsor of the group health-insurance plans. Not surprisingly, benefits are generous. The district's contributions for health insurance of active employees total 38.8% of wages. For private-sector workers nationwide, the average is 10.7%.


•Health insurance for retirees. This benefit is rarely offered any more in private companies, and it can be quite costly. This is especially the case for teachers in many states, because the eligibility rules of their pension plans often induce them to retire in their 50s, and Medicare does not kick in until age 65. Milwaukee's plan covers the entire premium in effect at retirement, and retirees cover only the growth in premiums after they retire.


As is commonly the case, the school district's retiree health plan has not been prefunded. It has been pay-as-you-go. This has been a disaster waiting to happen, as retirees grow in number and live longer, and active employment shrinks in districts such as Milwaukee.


For fiscal year 2011, retiree enrollment in the district health plan is 36.4% of the total. In addition to the costs of these retirees' benefits, Milwaukee is, to its credit, belatedly starting to prefund the benefits of future school retirees. In all, retiree health-insurance contributions are estimated at 12.1% of salaries (of which 1.5% is prefunded).


Overall, the school district's contributions to health insurance for employees and retirees total about 50.9 cents on top of every dollar paid in wages. Together with pension and Social Security contributions, plus a few small items, one can see how the total cost of fringe benefits reaches 74.2%.


What these numbers ultimately prove is the excessive power of collective bargaining. The teachers' main pension plan is set by the state legislature, but under the pressure of local bargaining, the employees' contribution is often pushed onto the taxpayers. In addition, collective bargaining led the Milwaukee public school district to add a supplemental pension plan—again with no employee contribution. Finally, the employees' contribution (or lack thereof) to the cost of health insurance is also collectively bargained.


As the costs of pensions and insurance escalate, the governor's proposal to restrict collective bargaining to salaries—not benefits—seems entirely reasonable.


After I read this, I asked myself why the Milwaukee school district would have agreed to such lush benefits, such as the taxpayers generously paying the teachers' share of so much of their contributions for deferred pensions. Why would the representatives of the taxpayers agree to pay so much more than the average private sector cost for pensions?

In a free labor market, when compensation rose to these levels in just one sector, more labor supply would come in to enjoy that swollen compensation level, competing it back down to the market average.

That's not happening in Milwaukee, is it? The logical reason would be constricted supply, i.e., the district can't turn to non-union teachers.

So all the Milwaukee taxpayers have to pay much more than normally-competitive compensation just because a union is the only source of supply for teachers.

Why is that a good thing?

It's clearly not.

Public vs. Private Sector Compensation

Since the teachers in Wisconsin illegally walked off of their jobs to spend more than a week protesting the state legislature's consideration of governor Scott Walker's bill to repeal their collective bargaining rights, more news stories and editorials have been appearing detailing how much better compensated public sector workers are, on average, than those in the private sector.

For example, Karl Rove wrote in a Wall Street Journal editorial last week,

"The growth of public- employee unions has paid off handsomely for some. The BLS reports the average annual wage for a state-government employee is now $48,742, but $45,155 for a worker in the private sector. What's more, the Bureau says the cost of benefits for state and local government workers has risen 50% more than those for private-sector employees since 2001."

In another Journal editorial in that same edition, Andrew Biggs and Jason Richwine refuted "a study released last October by the Center on Wage and Employment Dynamics at the University of California, Berkeley, which concluded that Golden State public employees "are neither overpaid nor overcompensated."

In their piece, they identified and corrected numerous errors in the Berkeley study,

"But our research shows that the study underestimates what public workers receive from pensions and retiree health programs. It also doesn't account for the value of job security in government employment. Once these are noted, the balance tilts clearly in favor of public workers.



The first error in the Berkeley study concerns defined-benefit pension plans. The study erroneously conflated what governments pay into defined-benefit plans with what workers will eventually receive in retirement. So if governments contribute 10% of employee pay to defined-benefit pensions while private employers contribute 10% to 401(k)-type pensions, these studies conclude that pension compensation is equal.


But here's the problem: State and local pensions effectively guarantee employees an 8% return on both their contributions and those made by their employer. By contrast, a private-sector employee with a 401(k) can achieve a guaranteed return of only around 4% by investing in U.S. Treasury securities. Most economists believe governments are foolish to base their funding decisions on the assumption of high investment returns, but the benefits for public employees are guaranteed in any case.


Over a career, the difference between a 4% and 8% return is significant. Using data from California's major pension funds, we calculate that the higher implicit return on public pensions increases the compensation of California's government workers by around 4%.


The Berkeley study's second error is the omission of retiree health benefits. Private workers retire later and relatively few receive retiree health coverage. For those who do, eligibility has been tightened and premiums increased. But almost 90% of state and local governments offer retiree health benefits to employees. They generally retire in their 50s, at which point the government often pays most of their costs, including Medicare premiums and deductibles.


State actuarial reports show the annual cost of California retiree health benefits could top 8% of total compensation. Thus an accurate accounting of pension and retiree health benefits shows that public employees in California are paid about 15% more than individuals working for large private firms (accounting for age, education, etc.).


Another major benefit of public employment is job security. The Bureau of Labor Statistics reports that, on average, a private worker has about a 20% chance of being fired or laid off in a given year. In state and local government, the discharge rate is only about 6%—and several studies have found that public employees are more risk-averse than other workers, meaning they place particular value on job security. We estimate that government job security is equivalent to about a 15% increase in compensation.


Overall, our research suggests that government workers in California are compensated up to 30% more generously than are similar employees in large private firms. And the California experience is similar to that of other large states with powerful public unions. Elected officials are right to reassess public worker compensation as they try to close their budget deficits."


I've highlighted the crucial passages summing up the extra earnings of the California public sector workers in blue. The total is eye-popping, isn't it? An extra 30% compensation, and job security, too.
 
 
 
I believe if more of Wisconsin's, and the nation's voters understood these financial comparisons between public and private sector workers' total compensations, no state would continue to allow collective bargaining for the former. And compensations for those public sector workers would begin to be linked to private sector averages.

Why Public Sector Unions Are Different Than Private Sector Unions

As Wisconsin and Ohio's GOP-controlled state legislatures respond to their governors' calls to pass bills which will remove collective bargaining rights from various public sector unions, Wonderboy and others on the far left, as well as union leaders and their members claim that it's union busting. That it's unfair.

I think it's disingenuous for governors Walker and Kasich to deny that they are targeting public sector unions. They aren't technically trying to break the unions, but they are certainly aiming to weaken the unions grips on the public purse.

Public sector unions are different than private sector ones. Perhaps more by degree than by nature, but that's in effect what many states are now about to discern.

Private sector unions negotiate with profit-making companies. When the companies strike unwise deals with their unions, then, in time, the companies' fortunes suffer and, shortly thereafter, so do the union members. One only has to consider the fate of railroads, airlines, steel and automakers in the US to see how union excess, combined with management stupidity, results in pain and suffering for the workers and shareholders.

In the private sector, Schumpeterian dynamics and Ricardian trade economics eventually shift economic activity, business and jobs to lower-wage, comparatively higher-productivity regions or countries.

Thus, in the private sector, global and regional competitive forces serve to curb union excesses for compensation and work rules which disadvantage the companies with which they bargain.

This natural competitive force is absent in the state and local government sector. Add to this the transient, largely semi-professional or amateur nature of most elected officials in state and local governments, and you have a recipe for public sector unions representing firemen, police, teachers and other civil service workers to demand- and receive- excessive compensation, benefits, work rules and other rights without a clear countervailing force.

In fact, the only countervailing forces are taxes and the amount and interest rates on state and local government borrowing. The former becomes a political football at each election, while the latter is poorly understood by the average voter. It takes a lot of effort for the average voter to connect the dots between his rising taxes and the lush, above-private-sector average compensation and benefits granted to unionized public sector workers.

You also don't have much choice in the matter of dodging this liability, short of moving to another locale or state. Which, when taxes rise too much, actually happens.

There's another difference, as well.

Suppose your neighbor works for Coca-Cola. Maybe he drives a delivery truck, or is a regional manager.

Do you worry about his job and well-being when you order a Pepsi or some other non-Coke beverage? Probably not.

If Coca-Cola has to cut wages or benefits, do you feel individually responsible? Again, probably not.

But suppose your neighbor works in the county or town clerk's office. Or is a policeman, teacher or fireman. Suddenly, there's an unsettling personal connection between your taxes, your personal share of the local or state government's spending and deficits, and your neighbor's standard of living.

If you vote for a candidate who promises to rein in spending, cut teacher pay, or maybe even retract their right to bargain collectively, you may feel that you are now personally responsible for the children of your neighbor, a public sector worker, being less well-off.

Frankly, it's not fair. It's not fair to the average voter/taxpayer that they are made to feel responsible for funding the lifestyle of a neighbor or friend who lives off the public trough.

That's one reason why I favor making every public sector job that can be, be outsourced to private sector companies via contract. It removes the human face from public sector jobs.

We all make career choices. If I work at Coca-Cola, does that mean I should take it as a personal insult that any of my neighbors or friends don't buy several cases of Coke products each week? They aren't responsible for my career choices- I am.

So why should I feel responsible when a fireman, policeman, town administrator or teacher is the object of expense reductions by state or local government? Why should I feel some personal guilt about my child's ability to read because someone I know chose to enter the teaching profession and is now experiencing lower compensation or work rule changes due to an inability of the local government to fund the existing union agreements?

Public sector unions are also different for the very reason LaGuardia and FDR originally declined to allow them, i.e., they provide critical services for government which cannot be safely interdicted. Thus, allowing them to possibly strike and suspend key government functions such as police and fire protection, schooling, or garbage collection, is unwise and unfair. If these functions were contracted out to private sector firms, then this wouldn't be a risk.

Simply put, why should some small group of our neighbors be allowed special privileges regarding their ability to legally extort us, through state and local governments, just because they happen to work for us in those governments? Isn't that totally backwards?

Yes, it is. Where they work shouldn't have any impact on how they make us feel about their wages, benefits or work rules.

In fact, because government workers serve all citizens, that's precisely why as many of them as possible should be private company employees- so we don't come to view their personal financial fortunes as our responsibilities as taxpayers and citizens.

Why Do State & Local Government Directly Employ So Many Workers?

Amidst all the trouble being caused by teachers and other state and local workers in New Jersey, Wisconsin, and Ohio, I've been wondering just why local and state governments directly employ so many workers?

Let's start with a small, local example- your town's parks and recreation department. I understand hiring a director for the function- sort of. Ideally, a committee of town council members could oversee the function, or one manager could handle several functions. So let's assume that this function, along with a few others, is managed by a managerial-level town employee who is not unionized.

Why would any town want to hire and be responsible for managing and paying the people in a function like this? It's essentially doing landscaping and outdoor maintenance work for the town's properties. So why not just contract with as many local such firms as necessary to perform the work? Bidding such work out to existing firms should get the town something approaching the marginal cost for such work, without incurring headaches involved with actually managing and paying the workers involved. No strikes, no compensation negotiations. And the town would have the advantage of routinely rebidding contracts, not to mention having recourse for work not performed, or poorly performed.

The same could be said with more local functions, such as school staffs, waste treatment plants, etc. If one didn't already have the precedent of existing school staffs, unions and such, why would a town or district bother with hiring anyone below a superintendent of schools? As a town official, I'd much rather outsource teaching to either individually-hired teachers, or a company which supplied whole school teaching and administrative staffs. Prices for the contract could be set relative to student performances, while the town remained free of long term liabilities for benefits paid to the staffs. That would be the concern of the providing company.

About  the only state or local function you might not want outsourced would be the police function, due to their use of force to compel citizens' compliance. Firefighting isn't really all that special, once prices reflect the risks of the work. As with schools, the actual buildings would be built and owned by the town.

By avoiding direct employment of many workers, local and state governments would accomplish several things. First, they'd always be able to solicit the best, most productive solutions from competing bidders for their work. Second, without dedicated employees, redesign of processes, departments, etc., would be much easier, because the government wouldn't directly employ the affected workers.

Third, workers doing government jobs, via contracts, would have the same risks everyone else does regarding employment, yet enjoy private sector labor markets and prices.

Aside from giving state and local government employees special benefits by being employed directly by government, what is the real value of this arrangement? It's fine to have higher-level managers of functions employed by the government, but, lower than that, it would make sense to have citizens' tax dollars used to spend on the best among competing solutions, rather than provide cozy long term employment for those fortunate enough to secure such a job.

What's gone on in New Jersey for over a year and, more recently, in Wisconsin and Ohio makes me think about this topic a lot.

The Left's Illegal Actions In Wisconsin

I last wrote about the standoff between Republican legislators and Governor Scott Walker, and the teachers' union in Wisconsin, in this post a few days ago. Since then, some additional information has surfaced which suggests how the debacle may be resolved.


First, something that the liberal media treats as normal, is the fact that thousands of Wisconsin teachers simply walked off of their jobs to go to Madison to protest. It's behavior which would get an ordinary employee terminated.


Second, doctors from, I believe, the University of Wisconsin, or some other state-affiliated organization, were out among the picketing teachers dispensing fraudulent sick notes. At least one Fox News reporter posed as a teacher and acquired a bogus excuse. This is fraud, apparently by state-paid doctors, to abet an illegal strike by teachers.


Don't you just love municipal unions and their employees? How they abide by no-strike aspects of legislation allowing their existence? This is precisely why LaGuardia and FDR refused to allow public sector workers to unionize and bargain collectively.


Third, the Democratic state senators who fled to Illinois are guilty of two things. They would seem to be derelict in their legislative duties, and subject to some penalty. By some press accounts, there are Wisconsin citizens calling for these senators to be recalled immediately.


However, these state senators are guilty of something actually far worse. It was the subject of a heated debate between Steve Hayes, Charles Krauthammer and Juan Williams on Brett Baier's Fox News program on Monday evening. The debate got so out of hand that it ate up time for another topic Baier had planned to discuss.


What was debated is how these state senators, being in the minority and unable to legally stop an all-Republican-controlled lower house, upper house and governorship from repealing collective bargaining rights for teachers, simply fled the state to prevent a quorum in the state senate. Hayes and Krauthammer noted that, during Congress' efforts to pass Wonderboy's health care bill, the president told Paul Ryan, at a private meeting, that he, Wonderboy, had won the presidential election, so his way was the only way forward.


Having set the national tone as governing at will when in complete, total majority throughout the necessary legislative houses and executive branch, this would be fitting for Wisconsin. This is what Krauthammer and Hayes contended.


Williams, ever the left-leaning apologist, denied this, defending the fugitive Wisconsin state senators as practicing democracy. He heatedly denied that they were violating the political process. He referred to it as 'playing politics,' and Hayes retorted with something like,


'That's not playing politics, Juan. That's taking the ball and going home.'


It's not a small point. In Wisconsin, as in the rest of the US, November's elections settled the public debate. The losers, in this case, the Democrats in Wisconsin, must abide by the will of the elected majority. Just like Congress' Republicans had to endure the tortured process by which the health care bill was passed.


Despite the signs and cries of the picketing Wisconsin teachers and their allies, Scott Walker is not behaving like Hitler, nor engaging in unrepresentative, undemocratic behavior. To follow Wonderboy's lead, the GOP in that state won control of both legislative houses and the governor's office, so they may now repeal the teachers' union's collective bargaining rights.


Isn't that the inspiring lesson of Wonderboy's remark to Paul Ryan- ironically, from Wisconsin- shortly after his inauguration? That since he'd won the November election, and Democrats controlled Congress, it was his way, or the highway? No Republicans need offer any amendments to anything?


What Democrat state senators and teachers are doing in Wisconsin is certainly not the democratic process. It's two groups of liberals behaving illegally because they lost power in a proper election, and now are seeing special benefits stripped by lawmakers representing the rest of the state's citizenry.


It seems to me that public sector collective bargaining is in no way a God-given right. What the legislature granted earlier, in the last century, it can take away. Almost half of US states do not allow this right for public employees.


Further, the left has created what is, for itself and those unions, a virtuous cycle. The public sector unions use union dues, deducted and paid to them by the state, to fund liberal candidates who then vote for better compensation and benefits for the union employees.


In Wisconsin, as governor Scott Walker has explained, this has led to below average payments by teachers for their pensions and health care benefits. Do you think this would have occurred if those workers weren't allowed to bargain collectively?


Probably not.


In short, the union and its employees, in concert with Democratic state officials over decades, finally looted too much money from the rest of the state's citizens. Those citizens gave Walker the governorship, and his party control of both legislative houses last November.


That was the will of the people, expressed at the ballot box. What teachers and Democratic state senators are doing now is whining and throwing a tantrum, now that they've been told things will change.


As I write this on Tuesday afternoon, Ohio and Indiana are now grappling with similar issues. It's a great time for the left and its public sector unions to be acting out in such a public and undemocratic manner.


If Wonderboy were smart, instead of accusing Scott Walker of union busting, he'd be calling on his party's members to buck up, take their medicine, and encourage teachers to behave legally and responsibly. Instead, his silence will come back to haunt the First Rookie in the 2012 election.

The Larger View of Wisconsin's Teacher's Protests

This post written last week concerned the Wisconsin's teachers' protests. Afterwards, on Friday evening, I saw Frank Luntz give a report on one of the Fox News evening programs explaining that this was about the dumbest thing a municipal union could be doing right now.

What may not have sunk in sufficiently to the rest of us is that parents across Wisconsin, but I believe especially in Milwaukee, have seen their public schools closed as the teachers simply walked off the job to go protest at the state capitol building in Madison. This is the essence of why local, state and the federal government didn't allow unionization of and collective bargaining for public sector workers for so long.

John Fund wrote in a Wall Street Journal editorial this weekend entitled What's at Stake in Wisconsin's Budget Battle, has noted,

"The Badger State became the first to pass a worker-compensation program in 1911, as well as the first to create unemployment compensation in 1932. The American Federation of State, County and Municipal Employees—the chief national union representing non-federal public employees—was founded in Madison in 1936. And in 1959, Wisconsin became the first state to grant public employees collective-bargaining rights, which influenced President John F. Kennedy's decision to grant federal employees the right to join unions three years later."

If you have lived in the Midwest, as I did growing up, you know that Wisconsin and Minnesota are the two very unusual states in the region. The latter has had a quasi-socialist party named the Democratic Farmer Labor Party since, I would guess, the dawn of the Progressive Era. Wisconsin continues to echo the LaFollette tradition of ultra-liberalism. So in that sense, these Wisconsin demonstrations by teachers doesn't surprise me.

However, I'm wondering if, by now, the rest of the populace hasn't grown sick and tired of being extorted by the municipal workers and their friends in the state's Democratic Party. To see why this may be so, here's another passage from Fund's piece,

"The real assault this week was led by Organizing for America, the successor to President's Obama's 2008 campaign organization. It helped fill buses of protesters who flooded the state capital of Madison and ran 15 phone banks urging people to call state legislators.



Mr. Walker's proposals are hardly revolutionary. Facing a $137 million budget deficit, he has decided to try to avoid laying off 5,500 state workers by proposing that they contribute 5.8% of their income towards their pensions and 12.6% towards health insurance. That's roughly the national average for public pension payments, and it is less than half the national average of what government workers contribute to health care. Mr. Walker also wants to limit the power of public-employee unions to negotiate contracts and work rules—something that 24 states already limit or ban.

Mr. Walker's argument—that public workers shouldn't be living high off the hog at the expense of taxpayers—is being made in other states facing budget crises. But the left observed the impact of the tea party last year and seems determined to unleash a more aggressive version of its own by teaming up with union allies. Organizing for America is already coordinating protests against proposed reforms in Ohio, Michigan and Missouri."


Thanks to research which became widely-circulated in the past two years, anyone with a brain who wants to know, knows that average public sector wages are now about 25% higher than those in the private sector, while they pay much less for better health and pension benefits.

This sort of outrageous compensation situation should, once and for all, turn voters against the notion that the public sector should be allowed to organize. Or that we should have so many functions even staffed by public sector workers, as opposed to simply bidding out contracts for the services to the private sector.

The sense of denial on the part of these public sector unions is incredible. For example, I see web ads by NJ's teachers unions accusing Christie's budget cuts of harming children. They conveniently forget or omit that the entire state is making sacrifices. It's not like any one part of the state's budget can be magically increased or left alone. Further, we're all paying for decades of political lies by both parties and ever-more generous settlements with the state's public sector unions. These promises will simply be unaffordable. People will move to escape higher taxes necessary to fulfill these extravagant contracts.

I suspect that many Wisconsinians are also much more upset than the liberal media will let us see over their Democratic state senators fleeing to Illinois to avoid doing their jobs to vote on, if against, Scott Walker's proposed bill.

How hard is it for state officials and, for that matter, local and federal ones, too, to make a best offer as follows: public sector employees of all sorts must make, as cash wages, pensions and health care benefits, no more than the average of private sector workers for each category, excluding these public workers? And that, furthermore, all benefits will be defined-contribution, not defined benefits, so that the annual state budget will pay all the compensation, with no out-year liabilities?

We have to get to a point where government employees are paid, totally, from current-year budgets, and no more than the average of similar workers in the private sector. No more subsidizing public sector workers with more generous compensation than the average taxpayer gets.

Between Wonderboy's cynical political calculations in his bloated budget for 2012, and teachers' unions in several states walking off the job and crying for special treatment and exemptions from financial pain amidst state budget deficits, I believe voters are finally getting the message: politicians of both parties in the federal and many state governments have lied and hidden real costs for far too long. Many politicians have looked on their jobs as permanent careers, and have used public sector union funding to help retain their jobs and recycle the money back to those employees in the form of overly-generous compensation agreements.

I suspect the tide is turning for good. Wisconsin's teachers seem to have roughly the same sense of the situation as do Wonderboy and the House Democrats. So it's timely they are demonstrating their tin ears on the subject of spending, taxes, entitlement spending and public sector unions just in time for the 2102 electoral cycle.

Municipal Unions Against State Budget Cuts & Reforms

It's been a big week for Republican governors who are trying to rein in budgets and raise public awareness concerning the special pension and benefit deals public sector unions have received. Here are two videos of Chris Christie speaking at the American Enterprise Institute.

Christie discussing being 'vaporized' for touching the third rail of Social Security, Medicare and Medicaid insolvency as currently designed and operated....

Then we have newly-elected Wisconsin Governor Scott Walker moving decisively to have the now Republican-controlled legislature enact a law to revoke collective bargaining for non-wage issues by public sector unions, except for police and firemen, and require said employees to pay more equitable contributions for pension and healthcare benefits.

The result has been teachers walking out and converging on Walker's home. Plus the Wisconsin senate Democrats decamping outside the state to frustrate the quorum required to pass the law. And, to complete the comedy, Wonderboy stating that Walker is engaging in police and fire 'union busting,' despite the fact that those two unions aren't involved.

Hilariously, liberals are accusing Walker and the legislature of being undemocratic, comparing the union's role to that of Egyptian protesters. They overlook the fact that Walker and the legislature are duly elected. That's the process that has credibility and standing. Not Democratic state senators running away in an attempt to avoid facing reality.

Do you think those legislators will be re-elected for that behavior?

Even the political reporter on CNBC, Red John Harwood, and, appearing on CNBC, NBC's liberal Meet The Press host, David Gregory, both admitted that it's fairly clear that these actions are necessary if states are to avoid bankruptcy. Harwood said it's simply a matter of whether or not the political will now exists among voters to enforce the cuts and required pain on public union members in order to end the excesses.

What strikes me as notable is the tin ear Wonderboy is showing on this issue. It's becoming more apparent with each new crisis that he is less of an accomplished politician, and more of a sort of political sprinter. Good over a short course, but fades in the long distances. He just doesn't seem to realize that governing, especially now, in a too-long profligate US, requires honesty and making tough, unpopular choices. Not simply demonizing a governor who is trying to balance a state budget in the face of coddled municipal union employees.