Wisconsin Union Busting: Convoluted Economics?

In my years of exposure to the writings of economists it has become clear to me that there rarely is a convergence of opinion as to the nature of a fiscal crisis or of a viable solution. There is generally some degree of accuracy to all conclusions, with future hindsight being the only indicator of veracity. I'm sure that our current economic and budgetary conundrum is no different.

                                                  1912 Textile Strike, Lawrence, Mass.



It is from this perspective that I am both perplexed and disturbed by the current events in Madison, Wisconsin where it would seem the political powers are intent on "union busting" as becoming the solution to the state's budgetary woes. Several other states are considering similar bills in their statehouses. I have not heard one economist, whether liberal or conservative, state that excessive power of organized labor was in any way to blame for our economic meltdown. Nor have I heard any one of them make claims that overpaid state and public sector workers were responsible for our demise. On the contrary, despite their many differences, most respected economists agree that the single most overriding cause of the Great Recession was the excessive power of capital, specifically finance capital and it's use of trading in ficticious mortgage instruments and derivatives that created a housing bubble. There is an unusual level of agreement, even among academia, that this was the case.

While the financiers have gotten off scott free, and with taxpayer funds racked up record profits and bonuses, real wages here in the U.S. as well as across the free world have been in steady decline since the 1970's. Interestingly, the power of organized labor has been in decline over this same period. Concession after concession on wages, benefits and retirement plans have been made to both management of private sector companies and public sector entities. In some cases unions have given up decades worth of gains. Governors and mayors, particularly in right to work states, make gleeful announcements of companies bringing a few hundred new jobs to their area that pay ten dollars per hour and only mediocre benefits. Most of the time these companies were enticed by tax incentives and sometimes given low cost or even free leases on publicly owned property. Many of the "fortunate" hirees end up drawing food stamps or some other form of assistance just to survive.

As is the case with any disaster, blame for the global economic crisis needs a scapegoat. From the very outset of the catastrophe financial moguls, their lobbyists, pundits, and bought politicians have been orchestrating a calculated program of misinformation and demagogy. Their targets have alternately been poor people who received sub-prime mortgages, illegal immigrants, Medicaire and Medicaid recipients, persons on disability, environmentalists, non-Christians, the school lunch program, the Department of Education, Planned Parenthood, American Civil Liberties Union, socialists, and spoiled people who refuse to work for minimum wage. As with most victims of scapegoating, many of these targets have no means of defense.

Organized public labor unions in Wisconsin can now be added to the rediculous reasons for state governments going broke. Never mind that of the 137 million dollar shortfall in Wisconsin's budget, 117 million dollars is due to a tax cut for the wealthy pushed through recently by Gov. Scott Walker. Ignore the fact that in the short time he has been in office he eliminated the Department of Commerce and replaced it with a public/private corporation funded with 80 million dollars of taxpayer money with little or no oversight. The public unions have agreed to ALL of the wage and benefit concessions demanded of them. But that is not enough. The governor is intent on busting the union as well, setting a horrid precedent for other states and municipalities to follow suit.

As sad and disconcerting this all is, the real tragedy is that the singular cause of our peril will not be addressed. The problem will be left to languish, awaiting it's inevitable return. The finance juggernaut, free from meaningful regulation and with the backing of America's largest lobby, will continue to rack up enormous profit while getting those who are of the least means to shoulder the burden. No one can say what the next crisis will be. It could be a commodities bubble,a sovereign debt crisis, or a failure of the dollar as the world's reserve currency. But it will come. Perhaps they are searching already for the next scapegoat.