Monday, February 21, 2011

Krugman's New Fight Song: "On Wisconsin"

There are a number of college fight songs that have become memorable -- and copied -- throughout the country. There is "Cheer, Cheer, for Old Notre Dame," "Hail to the Victors" (University of Michigan), "Tiger Rag" (Clemson and LSU), and even from my old alma mater, Tennessee, the infamous "Rocky Top."

("Down the Field" was our fight song when I first came to UT in 1971, but "Rocky Top" continued to move into the picture, and now it dominates any UT football or basketball game. At least I can play it on my violin, although not easily in the key that the band uses.)

From what I can tell, Paul Krugman has decided to push "On Wisconsin" for his fight song today, and I cannot say I am surprised that he took on the cause of public employee unions. Once one takes on the viewpoint that all (or almost all) government spending is "good for the economy," then what is not to like about government unions?

At one level, this is something that was inevitable, and we have to separate the politics from the larger picture. First, Krugman is correct when he writes that this is not just about cutting spending. The Wisconsin state union leaders have agreed to engage (at least in principle) to engage in negotiation.

Second, ironically, Krugman is correct when he writes the following, but not in the way that he might think:
Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes.

So it’s not about the budget; it’s about the power.

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.
You see, Krugman is painting false picture here, a caricature that began during the Progressive Era and continues to the present time. According to Krugman, we have the Big, Bad Oligarchs on one side and then the poor, downtrodden workers on the other.

By unionizing, these poor workers are able to have a fair say in what is happening to them, so any attempt to weaken the power of unions really is nothing more than an attempt to bring back the Bad, Old Days. There is a problem with Krugman's analysis, however, a big problem.

First, we can see what has happened to those private industries in this country that have had powerful unions, from steel to autos. The only truly competitive industries in those areas today are non-union, such as the various Japanese auto firms that have built facilities in this country.

Now, Krugman would have you to believe that the workers at the various Nissan, Toyota, and BMW plants here are starving, working for mere pennies because they are not organized. Tell that to the employees who are doing just fine. Furthermore, they have jobs, as they have not forced their employers out of business, as has the UAW, which helped drive General Motors into bankruptcy, with American taxpayers being the ones now propping up this bankrupt monstrosity.

Second, we are dealing with another animal, that being government unions. There is a huge difference that Krugman fails to point out, and that is that public employee unions are allied with politicians (mostly Democrats), creating what essentially is a soviet in which the government employees provide enough clout to make sure that their chosen paymasters are elected.

The only problem for them is that the unions cannot extract good pay and benefits from themselves, so they have to go after the people who actually produce something in the real economy. What we have is an arrangement in which the unions elect the politicians who then strip others who are not part of the arrangement of their possessions to give to the unions.

This arrangement works as long as those being fleeced are able to do so and don't gain enough political power themselves to break up this soviet at the ballot box. However, this past year, despite record spending from labor unions to prop up the Democrats, they lost big in the elections and now are taking their big stand.

With the Obama administration taking an active role in organizing and supporting the protests, we can see where lines are being drawn. But there is even more, something more insidious that Krugman ignores but that I cannot and will not ignore.

The Obama administration has aggressively prosecuted and imprisoned doctors whom prosecutors claim write prescriptions that "have no medical purpose." However, at the rallies at the Wisconsin Capitol, doctors (yes, real-live M.D.s) have been handing out fake "sick" excuses to teachers in order to make their unauthorized absences be made to look as though they were away from work for a legitimate reason.

This, people, is fraud, and literally a federal crime. So, we have doctors on camera committing felonies -- and that is what they are are -- to be seen by federal authorities, and I will bet that nothing -- nothing -- will be done. In other words, Obama and his supporters (including Krugman, of course) will support felonious behavior for political reasons.

Krugman may claim that these are poor, downtrodden workers trying to stand up against the Oligarchs, but in reality, what we have been seeing are people who are able to use coercion in order to create pay and benefits for themselves that are not available to others -- the others who have to pay for these arrangements.

Moreover, many public employees have real power over the rest of us, and anyone who has dealt with unionized state and federal bureaucrats can attest to the abuse that they heap on others, and the fact that they are not accountable for that abuse. Let us be honest here, people. Paul Krugman is endorsing what in effect has been a gravy train for those people privileged to be tied to the politicians who have wielded power.

Now that the arrangements are different, the same "public servants" who enjoy pushing others around now are trying to tell us that they are nothing more than poor, oppressed workers toiling for pennies a day. And the fact that Krugman is willing to shill for this tells us a lot about the guy.

21 comments:

Jonathan M.F. Catalán said...

Right, the most consistent argument is that which criticizes government favoritism on both sides.

Woody said...

Anyone who buys the "poor, downtrodden workers" business needs a historical lesson on union violence.

Here's more analysis on Krugman's story:

Krugman: 'Gov. Walker Trying to Make Wisconsin and America a Third-World-Style Oligarchy'

"...as George Will pointed out on ABC's "This Week" Sunday, '24 states limit or deny entirely collective bargaining rights for public sector unions.' Wisconsin would therefore become the 25th. Hardly the crisis Krugman suggests.

"Will also correctly noted that one of Krugman's heroes, Franklin Delano Roosevelt, opposed public employee unions...."

Anonymous said...

I would think that if public servants unions increased pay and benefits, then public compensation would be higher than private compensation. However, it is not.

Further, " in reality, what we have been seeing are people who are able to use coercion in order to create pay and benefits for themselves that are not available to others..." Workers in private fields could unionize if they wished. In a free country, there should be no legal impediment to unionization.

bravo said...

"Further, " in reality, what we have been seeing are people who are able to use coercion in order to create pay and benefits for themselves that are not available to others..." Workers in private fields could unionize if they wished. In a free country, there should be no legal impediment to unionization."

You completely missed the point, probably because you wanted to. Workers in private industries have unionized, and it bled their companies dry, as in the steel and auto industry that prof anderson gave examples for. Thats all well and good if private companies want to allow that to happen. Its their money. When public workers, paid for with confiscated tax dollars start forming unions to vote themselves a larger pound of flesh the productive members of society, its a sick joke to portray them as the down-trodden worker just trying to earn a fair wage. Its utter bullshit because their "greedy boss" is in reality helpless taxpayers at the mercy of politicians elected and paid for by these same unions that then use their newly acquired political leverage to suck even more resources from the productive members of society, who are in fact, the real "down-trodden workers". Not because of greedy bosses but because of the colusion of public employees and politicians to fleece them for as much as they can. You fail sir.

Mike Cheel said...

@Anonymous

FTFY - "In a free country, there should be no legal impediment to unionization" as long as their is no government coercion \ interference involved.

Then you would have voluntary employment.

Dan said...

The characterization that public sector employees add no value to the economy utterly false. A good teacher is worth 100 crooked hedge fund managers in my opinion.

The further charactization that tax dollars are "confiscated" is also a steaming load. Democratic governments, which Austrians do not seem to believe in, give voters a choice of what government services they want and then these voters must *gasp* pay for them. There are no free lunches my friend.

jason h said...

Actually, democratic governments let 51% tell the other 49% what to do.

If tax dollars are not confiscated, why can't I calmly explain to the tax man that I have no kids and do not wish to pay the property taxes that fund ineffective public schools.

Bala said...

"The further charactization that tax dollars are "confiscated" is also a steaming load."

How do you say that? Are they by any chance collected on a voluntary basis and without the threat to use force?

"Democratic governments, which Austrians do not seem to believe in, give voters a choice of what government services they want"

How? Pray tell me soon. I'm turning blue just holding my breath.

Mike Cheel said...

"Democratic governments, which Austrians do not seem to believe in, give voters a choice of what government services they want"

In a democracy, majority rules. In a republic the individual rules.

The US seems to fall somewhere between an oligarchy and a plutocracy but honestly I don't think it can be defined as any one type.

Mike Cheel said...

@Dan "There are no free lunches my friend"

http://www.csmonitor.com/Business/Paper-Economy/2010/0908/Are-you-on-food-stamps-yet

Dan said...

And the crazies have come out!

Time to put down your Big Macs, turn off American Idol, and grab your AK-47 and get off the grid already! Maybe you gold buggers can do some prospecting while you're at it.

I doubt those pesky local school children come after your hard earned money there!

Dan said...

rofl I just saw on Jason's profile that he is a student in Austin, TX. I don't think you'll be paying income taxes for awhile there buddy. Why don't you leave this conversation to the grownups ok?

Mike Cheel said...

@Dan

Explain why what I said is crazy? The food stamp stats came from your own precious state owned Dept of Agriculture. And if you have been living in the US since at least December 2007 you would realize the oligarchy \ plutocracy comment is pretty accurate.

Anonymous said...

@Dan: You respond to a legit criticism of your assertion with such a blatant ad hominem attack? Either you have a nigh unshakable delusional devotion to the state, or you're a poe. I'm guessing the latter.

jason h said...

@Dan Thanks for reminding me to update my profile. I have been paying income taxes for a while now.

You do know schools are primarily funded by property and sales taxes.

If the people truly want these services why not eliminate the taxes and charge directly. Why must the state threaten to seize your land?

Bala said...

@Dan,

I just asked a couple of questions. How about answering them instead of throwing mud on my face?

AP Lerner said...

Prof. Anderson is spot on this one. I can't believe those greedy union members in Wisconsin. How dare they want to maintain their right to assemble and organize. It's not like it's guaranteed in the Constitution or something.

And union membership is just completely out of control in Wisconsin.

http://www.ritholtz.com/blog/wp-content/uploads/2011/02/wisconsin-workers.png

Oh wait, membership is way down. Ok, those greedy union bastards must be demanding outrageous salaries.

http://www.ritholtz.com/blog/wp-content/uploads/2011/02/wisconsin-v-united-states.png

Oh wait, no they are not.

Fortunately, there are a handful of honest analysts on the web that actually pay attention to the data.

http://www.ritholtz.com/blog/2011/02/whos-breaking-the-bank-in-wisconsin/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29&utm_content=Google+Reader

Prof. Anderson - do you ever consider the facts and data before going on your incoherent, baseless rants? Do you teach in the political science department, economics, or kindergarten at Frostburg?

jason h said...

How dare they want to maintain their right to assemble and organize.

Mandatory union membership and fees automatically confiscated from your paycheck, is quite the opposite of freedom of association. Try again.

Steve Boothe said...
This comment has been removed by the author.
Anonymous said...

@AP Lerner: So, by your logic, so long as the attacking group is below a certain membership level, and the action is only sustained below a certain amount of time, it's not actually rape.

Good to see the depths of your amorality laid bare, sir. Maybe you should take your insults elsewhere and leave the discussion to those who can conduct themselves as adults.

callahan auto said...

AP - back you your old tricks again. funny that you post data on base wages, isn't the governor allowing them to continue to bargain over wages? including data on all unions showing a decline, not he public sector ones that are the issue at hind here. also, some raging lunatics on that site, really "data and fact driven". you should be embarrassed.