Commentary Magazine


Topic: pension reform

The Wrong People Are Doing the Right Thing

Mark Steyn, writing in COMMENTARY last November, pulled out a great quote:

In 1975, Milton Friedman said this: “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.”

Perhaps that climate is upon us. Who, in political terms, is more “wrong” than the progressive whistlers inhabiting the fiscal graveyard known as California? Yet, on Tuesday, Chuck Reed, the Democratic mayor of liberal San Jose won nearly 70 percent support for a ballet initiative that will deal huge cuts to the bloated pensions of city workers. Currently, retirement costs eat up more than 20 percent of San Jose’s general fund. None other than a Democratic mayor, backed by a clear majority, intends to slam on the brakes. Tea Party not needed.

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Mark Steyn, writing in COMMENTARY last November, pulled out a great quote:

In 1975, Milton Friedman said this: “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.”

Perhaps that climate is upon us. Who, in political terms, is more “wrong” than the progressive whistlers inhabiting the fiscal graveyard known as California? Yet, on Tuesday, Chuck Reed, the Democratic mayor of liberal San Jose won nearly 70 percent support for a ballet initiative that will deal huge cuts to the bloated pensions of city workers. Currently, retirement costs eat up more than 20 percent of San Jose’s general fund. None other than a Democratic mayor, backed by a clear majority, intends to slam on the brakes. Tea Party not needed.

On national security, we see similarly encouraging signs. Democratic Senators Dianne Feinstein and John Kerry were among others who called for an investigation into recent Obama administration leaks about American cyberwarfare action against Iran. “Whoever is doing that is not acting in the interest of the United States of America,” said Kerry, using the kind of black-and-white tough talk he used to accuse the Bush administration of using to divisive effect.

And of course a slew of Democrats, from Feinstein to Deval Patrick to Bill Clinton, called foul on Barack Obama’s anti-private-equity reelection strategy.

The beautiful thing about living in a democracy with protected speech is that politicians aren’t solely in charge of framing the terms of debate—citizens set the political climate. In what has already passed of the Obama years, the temperature has been raised enough to make liberals sweat. Today a trickle. Tomorrow who knows? As Friedman saw it, that’s ultimately a greater conservative victory than what may transpire in November.

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A Tide in the Affairs of Men

As Jonathan noted, last night wasn’t just a big night for Scott Walker and a bad one for Wisconsin unions. It was also a very big night for the people of two of the nation’s largest cities (in true-blue California, yet)–San Diego and San Jose, where propositions on pension reform for public employees passed by overwhelming votes.

So let’s review:

Spring of 2009: The Tea Party emerges as a major political force.

Summer of 2009: Tea Party members confront members of Congress in town hall meetings, demanding fiscal reform, as the senators and congressmen stare back at them in the best deer-in-the-headlights fashion.

November 2009: Bob McDonnell wins the Virginia governorship 59-41 percent on a fiscal reform platform. Chris Christie wins the New Jersey governorship 48.5-44.9 percent (5.8 percent went to a third candidate) on a fiscal reform platform, running against a self-funded incumbent.

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As Jonathan noted, last night wasn’t just a big night for Scott Walker and a bad one for Wisconsin unions. It was also a very big night for the people of two of the nation’s largest cities (in true-blue California, yet)–San Diego and San Jose, where propositions on pension reform for public employees passed by overwhelming votes.

So let’s review:

Spring of 2009: The Tea Party emerges as a major political force.

Summer of 2009: Tea Party members confront members of Congress in town hall meetings, demanding fiscal reform, as the senators and congressmen stare back at them in the best deer-in-the-headlights fashion.

November 2009: Bob McDonnell wins the Virginia governorship 59-41 percent on a fiscal reform platform. Chris Christie wins the New Jersey governorship 48.5-44.9 percent (5.8 percent went to a third candidate) on a fiscal reform platform, running against a self-funded incumbent.

January 2010: Scott Brown defeats Martha Coakley in deep-blue Massachusetts to win Ted Kennedy’s Senate seat.

November 2010: Republicans sweep to victory across the country, taking the House with their largest majority since 1928 and gaining seven seats in the Senate. Governorships and state legislative houses turn Republican across the country.

June 2012: Walker wins the recall election with a margin larger than his original win in November 2010. San Jose and San Diego voters rein in public pensions.

That sure looks like a trend to me. I’d advise the Romney campaign to follow Cole Porter’s advice and “Brush up Your Shakespeare,” specifically, Julius Caesar, IV:3:214-218.

And while they’re at it, I would also recommend a brilliant essay by James Pierson in The New Criterion, “The Fourth Revolution,” which explains the deeper tides of American history leading up to the present moment. It is illuminating to say the least.

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More Bad News for Unions From California

As if the epic defeat of their effort to recall Wisconsin Governor Scott Walker wasn’t enough, the union movement got even more bad news from California last night when voters in San Diego and San Jose gave huge majorities to referenda that called for cutbacks to retirement benefits for municipal workers. If only a year or two ago states and cities throughout the country appeared helpless to stop the march toward insolvency caused by the enormous expenditures required to pay for the generous benefits and pensions given public employees, it now appears the tide has turned in favor of the taxpayers.

Where once there was no greater political power in most states than the unions representing state workers, these once mighty groups look like paper tigers. The voters have rightly determined that the burden of the contracts is too great for the taxpayers to bear in a time of a shrinking economy when private sector workers cannot hope to do as well. Politicians who feared to cross the unions or to stand up to them in negotiations — because doing so meant running the risk of strikes and slowdowns that could bring states and municipalities to their knees — are suddenly discovering the courage to not only say no to further demands on the public exchequer but to request and get givebacks that make fiscal sense. After Scott Walker’s big win in Wisconsin and the 66 and 70 percent majorities won in California, this could be just the start of a broad movement that will end the stranglehold unions once had on state budgets.

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As if the epic defeat of their effort to recall Wisconsin Governor Scott Walker wasn’t enough, the union movement got even more bad news from California last night when voters in San Diego and San Jose gave huge majorities to referenda that called for cutbacks to retirement benefits for municipal workers. If only a year or two ago states and cities throughout the country appeared helpless to stop the march toward insolvency caused by the enormous expenditures required to pay for the generous benefits and pensions given public employees, it now appears the tide has turned in favor of the taxpayers.

Where once there was no greater political power in most states than the unions representing state workers, these once mighty groups look like paper tigers. The voters have rightly determined that the burden of the contracts is too great for the taxpayers to bear in a time of a shrinking economy when private sector workers cannot hope to do as well. Politicians who feared to cross the unions or to stand up to them in negotiations — because doing so meant running the risk of strikes and slowdowns that could bring states and municipalities to their knees — are suddenly discovering the courage to not only say no to further demands on the public exchequer but to request and get givebacks that make fiscal sense. After Scott Walker’s big win in Wisconsin and the 66 and 70 percent majorities won in California, this could be just the start of a broad movement that will end the stranglehold unions once had on state budgets.

To those who cry foul over the pension reform measures in California or Walker’s clipping of the unions’ wings in Wisconsin, we need to point out that treating public employees as a privileged class is what we might find in dictatorships, not a democracy. The ascendancy of the unions was the product not only of political muscle but the vast expansion of government during the last century. The bigger government got, the greater its appetite for revenue and the more leverage state worker unions had. Having used that power to extract exorbitant contract concessions from the people supposedly representing the taxpayers, the unions were determined to hold onto their grip on the nation’s purse strings.

But like any Ponzi scheme, this was a concept that had to go bust sooner or later. The costs of these contracts and pensions continued to grow with only the seemingly unlimited power of the government to confiscate more of the taxpayers’ income to pay for it. The Tea Party revolt that swept the nation in 2010 was an expression of the public’s disgust at the way states and cities were locked into spending patterns that could not be sustained. Rather than merely stopping the spigot of public funds flowing into union coffers, Scott Walker sought to put in place measures that would ensure unions could never again put a figurative gun to his state’s head in order to get a bigger share of the budget. In California, mayors have acted similarly by passing measures that will reverse the giveaways conducted by their predecessors.

Scott Walker’s defeat of a union movement determined to punish him for undermining their hold on Wisconsin’s finances as well as the result from California ensures that others will follow in those footsteps. The era of unions holding up states and cities is over. A new age of fiscal sanity may not be far off.

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