Archive for February 2011
Remember before Obamacare passed and folks like Ezra Klein were saying that if the bill didn’t pass, tens of thousands of people would die each year as a result? Tim Carney recounts the interesting journey this argument has taken, from adamant insistence on its rightness, to the recent proclamation that “Health care doesn’t keep people healthy — even in Canada.”
One of the so-called advantages of liberalism is its emphasis on “empirical” analysis of social problems. If nothing else, it does indeed have strategic political advantages. Observe: Once the model is adopted, the approach proceeds by identifying some kind of social “epidemic”—e.g., “tens of thousands will die without health insurance,” or “the middle class will collapse without unions,” that sort of thing. Establish the question as a moral one. Next, make vociferous arguments insisting that “the data is in” and that practical results based on rigorous empirical analysis should be favored, and that conservative, piecemeal approaches that insist on constitutional/legal consistency should be eschewed. Remember, people will die. And the Constitution is over a hundred years old, after all. By this time, if you’re doing it right, you can accuse your objectors as both morally and intellectually insolvent. Then, only later when the empirical analysis is finally demonstrated to have been full of beans, the playbook prescribes a casual acknowledgment that maybe some mistakes were made on both sides, but that we oughtn’t throw the gears of the bureaucratic regulatory machine in reverse now. Throw in some familiar terminology like market predictability and stare decisis. Finally, before awaiting further protestation, promptly identify yet another social epidemic calling for further empirical assessment and immediate constitutional policy overhaul.
You can’t stop progress.
…but I was quite disappointed that E.D. Kain chose to engage only the noisy and debatable points about public sector unions rather than the serious and systemic ones. I have been writing about these problems at great length here, and have shared them with E.D. in another forum. E.D. is generally a very forthcoming writer and thinker, but when it comes to an issue so deeply enmeshed in the liberal agenda, he can’t bring himself to consider the serious arguments against public unions—even though his recent post purports to do just that.
I appreciate the left’s political angle in the union debate. As the argument goes, unions work as a countervailing power to corporate economic and political clout, and are thus the only practical hope for securing some semblance of a middle class. I don’t necessarily accept the premise, but there’s lots of interesting topics to unpack and discuss there. At any rate, I do agree we’re facing a Middle Class Problem generally. (But then again, when are we not?)
But this is no excuse for question begging. Let’s put it another way. Consider the following argument: “Crony Capitalism is justified because it is a countervailing political and economic force to that of the Thuggish Labor Unions.” Is not your first reaction to resist the despicable premise of Crony Capitalism as vile and anti-democratic, whether or not it is somehow “balanced out” by another vile and anti-democratic special interest? And is not your second reaction to wonder whether we can simply mitigate the influence of both of these vile and anti-democratic special interests?
This is my problem with the left, particularly those who profess open-mindedness, “no labels,” and aversion to politics as usual. Though a conservative, I have expressed concern over the forms individualism and corporatism have taken in contemporary America. There are reasons for this, partly due to government’s dual tendencies toward secularism and expansion, and partly due simply to human nature. But there are some of us on the right who really are concerned with such problems, and would even concede there’s something to the necessity of unions as a countervailing force against corporate influence. But to meaningfully advance labor’s concerns requires an acknowledgment of some of labor’s serious systemic problems, particularly those in the public sector.
So I am disappointed that E.D. has chosen to eschew talking about those problems in favor of taking sides in favor of a special interest group in favor of a political agenda. This is why he has chosen to willfully ignore the deeper problems with public unions as they relate to the integrity of our system of government itself. Now that E.D. has apparently put himself in the service of political causes rather than political thought, serious debate on these tough questions simply gets in the way of the accumulation and wielding of power for the benefit of the special interest group du jour. To that end, one must waste no time with stubborn conservatives and libertarians—not while the middle class is suffering so.
Again, maybe I shouldn’t be surprised, but I’m still disappointed when even the most thoughtful among those on the left pretend these kinds of deeper problems don’t exist.
As previous Commerce Clause cases have all involved physical activity, as opposed to mental activity, i.e. decision-making, there is little judicial guidance on whether the latter falls within Congress’s power….However, this Court finds the distinction, which Plaintiffs rely on heavily, to be of little significance. It is pure semantics to argue that an individual who makes a choice to forgo health insurance is not “acting,” especially given the serious economic and health-related consequences to every individual of that choice. Making a choice is an affirmative action, whether one decides to do something or not do something. They are two sides of the same coin. To pretend otherwise is to ignore reality.
This is dangerous reasoning. There is a world of difference between choices and actions. It is why, today anyway, there is still no such thing as thought-crime. Thoughts are not legally actionable. Intentions, until now, could not be prosecuted. As Jacobson observes:
Our thoughts are now actions. There literally is nothing the federal government cannot regulate provided there is even a hypothetical connection to the economy, even if the connection at most is in the future.
As I’ve written before, Obamacare advocates seem far too comfortable with dismissing legal limits and relying solely on political limits. Historically, however, this comfort only tends to last until legislation starts moving in the opposite direction.
Here’s Tim Carney on Right to Work:
Right to Work laws bar employers from imposing a different sort of condition: the requirement that all employees join a union. Thus they take away property rights and infringe on the right of contract.
There are plenty of stupid labor laws that restrict employer freedom, but none of these laws force employers to have a closed shop. Preventing employers from agreeing to a closed shop is no free-market solution.
The suggestion that Right to Work is somehow anti-conservative or anti-freedom-of-contract is about the dumbest thing I read last week. The idea that employers would, on their own, require all employees to join a union seems obviously incorrect. Right to Work prevents unions from urging employers to adopt these restrictive policies. It’s not as if employers on their own came up with the idea to drastically limit their work force and prevent themselves from hiring bright, qualified, willing applicants, simply because they are non-union.
Instead, what’s going on here is unions leveraging their influence against employers to use employers’ freedom of contract in an anti-competitive fashion in the aid of unions. Right to Work, then, deprives an employer of a right that is quite useless to him—i.e., the right to limit his hiring pool—because that right is too often used by unions to anti-competitive ends. Thus, if employers no longer have the right to limit their work force, unions can’t urge them to do it.
There’s an analogue here in the eminent domain/redevelopment context, which I wrote a law review article about some years back. Eminent domain is an important governmental tool to the extent the public needs roads and schools and parks and other public works; but it is a dangerous tool when the law permits it to be used for mere economic development. Why? Because even if the government has beneficent ends (e.g., rooting out slumlords, revitalizing an impoverished area, etc.), many businesses don’t. Costco, for example, is well known for its tactics in leveraging its economic muscle against redevelopment agencies to use their power of eminent domain to make space for them. If they don’t? Costco will move down the street to the next town and draw lots of tax revenue from the first town. In the case of 99 Cents Only Stores v. Lancaster Redevelopment Agency in 2001, Costco threatened to close up its store at the hub of a major shopping center, and leave it shuttered and unoccupied for the remainder of its lease if the city didn’t use eminent domain to take the 99 Cents store competing with Costco. The city gave in, and agreed to take 99 Cents’ store and give it to Costco for $1.00. Luckily, the court ruled against this illegal power play.
Redevelopment agencies’ “freedom” to take property for economic development, then, winds up being used against them.
Same with Right to Work. There are all sorts of laws that prevent parties from “freely” contracting where the resulting contracts are anti-competitive. Typical are agreements in which an employee “freely” agrees not to compete with his employer after his term. But because this restrains his ability to practice his profession post-employment, such agreements are routinely struck down by courts. The law tends to disfavor the sorts of contracts that are systematically used in the aid of subverting liberty more generally.
Agreements between unions and employers in which employers purport to bargain away their freedom to hire qualified, willing applicants, simply because they are not a union member, is just this sort of anti-competitive agreement. An employer’s “freedom” to require employees to join a union is not one that benefits employers; it is one that unions leverage against them. Right to Work, then, is typical of laws that invalidate abusive, anti-competitive contracts in the cause of greater overall liberty.
A state is fundamentally an ethical enterprise aimed at promoting human welfare.
Basic definitions about what “the state” is determine what you will be willing to use it for. Liberals, like Yglesias, believe the state is a source of moral authority. This is a very different conception from the conservative conception of the state as a mere instrumentality, rather than the source, of society’s morals and values. Defining the state as liberals do means the state’s job is never done so long as some injustice exists. It’s the reason government has grown exponentially in the last century, and the reason why the law has been made to reach every minutia of our civic and personal lives.
The San Francisco Examiner reports:
[C]ome November, it sounds like voters will have the opportunity to jump on the ban wagon by deciding whether to ban male circumcision.
San Francisco resident Lloyd Schofield said Thursday he is “on track” to have enough signatures to place his proposed measure on the November ballot that would make it illegal to “circumcise, excise, cut or mutilate the foreskin, testicle or penis of another person who has not attained the age of 18.”
This presents a good exercise for social conservatives: If you support morals legislation (e.g., suicide, euthanasia, drug use, animal cruelty, bestiality, prostitution, sodomy, homosexuality, polygamy, adult incest, public nudity, profanity, stem cell research, human cloning, and so on), what sorts of arguments might you employ to oppose the forthcoming San Francisco initiative to outlaw infant circumcision? Arguments based on personal privacy might not work if you support prohibitions on prostitution and incest. Arguments based on religious freedom might not work if you support prohibitions on polygamy and drug use (e.g., peyote). Arguments based on parental rights might not work if you support bans on stem cell research and human cloning.
So, how do you oppose the ballot initiative on infant circumcision?
A friend asked me today why there seems to be relatively little emphasis on a peculiar distinction made in Gov. Walker’s public union reform proposal. Specifically, while the proposal disallows the unions to collectively bargain to increase wages, it would still let them collectively bargain to increase benefits, i.e., health care, vacation and sick pay, and, of course, pensions. (Gov. Scott Walker’s proposal is here, and Ezra Klein does a fair enough job explaining it.) It strikes me as very odd that Walker took this approach rather than the opposite—that is, rather than killing collective bargaining on benefits, leaving wages on the table for negotiation. Wages are easy to quantify. You give workers pay raises, and you have to make it work with this year’s budget. Moreover, most states have balanced budget requirements imposed by their constitutions. In short, there’s little room for mischief when it comes to negotiating for wages.
Benefits, however, is a much more vexing issue, because it’s so much easier politically for the government to increase benefits by tucking the liabilities away in future budget projections and investment portfolios. As a result, “future” compensation is nearly limitless when it comes to government accounting: if the funds aren’t there presently, they can kick the can down the road to future elected officials and taxpayers. Unions realize this, of course, and put pressure on government employers for generous benefits packages. This helps explain why public employees have such generous benefits packages, even if by some accounts their actual wages might track slightly below the private sector. According to Forbes, for example,
NYC socked away $20,000 per employee last year for pension benefits. Since 2000 its pension funding bill has risen ninefold, from $615 million to $5.6 billion in 2008. That’s more than the city spends on transport, health care, parks, libraries, museums and City University of New York combined, says the Citizens Budget Commission.
[Update: There’s also this from Robert Costrell, via Avik Roy: “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.”]
Realizing this phenomenon, some state constitutions require that future liabilities must first be subjected to referendum. California is one such state. However, as you’ll see from my analysis of a recent California Court of Appeal decision, this state’s courts have long employed judicial sleight of hand to avoid the effect of these constitutional restraints. Unfunded pensions, the court held, are not really a “liability.” Instead, they are “an actuarial estimate projecting the impact of a change in a benefit plan.” In this way, the taxpayers’ constitutional protections on runaway unfunded pension liabilities have yielded to the government accounting tricks and judicial linguistic machinations. Thus, California’s public sector unions have been effectively exempt from obtaining taxpayer approval for pension increases and other benefits, even while those packages are crippling the state’s economy.
Specifically, San Diego’s pensions are facing mortal danger. Vlad Kogan provides a fair assessment of the fiscal realities of public employees’ defined benefit pensions. Kogan argues that, taking the long view, there really is no difference between defined benefit and defined contribution pensions: in good times, the taxpayer will contribute less to pensions; in bad times, the taxpayer will feel the pinch. Except, it’s more than just a pinch. Kogan does the math, and reveals just how costly the defined benefit plans are: public employee pensions, currently accounting for more than 40% of San Diego’s total payroll, will climb to a dizzying 55% by the mid 2020s. In theory, things will level out. In reality, however, San Diego may not hold out long enough to see that happen:
As we try to learn our lessons from the Great Recession, policy makers might well decide that the pinch put to taxpayers by taking the “long view” approach in defined benefit pensions is simply too destructive and too inequitable. With public sector unions standing guard, however, policy becomes frozen in time, and policy experiments only ever move one way: in favor of public sector unions at the expense of everyone else.
Politics proves again and again that democracy is a very bad accountant. The Economist explains how the seldom discussed concept and calculation of discount rates contributes to the inscrutability of what the taxpayers’ true liability is for public employee pensions. In Britain, for example, using a conservative discount rate indicates a liability up to 85% of GDP. The Economist concludes that if the whole picture of public employee compensation—salary, health care, benefits, and pension—were revealed to the public in straightforward terms, taxpayers may demand reform.
But this problem of political dishonesty in public union political bargaining could not be expressed any better than New Jersey Governor Chris Christie at his speech at the American Enterprise Institute:
You can imagine how that was received by 7,500 firefighters. As I walked into the room and was introduced. I was booed lustily. I made my way up to the stage, they booed some more. I got to the microphone, they booed some more. So I said, come on you can do better than that, and they did! They did. And then I said to them – I took away the prepared notes I had for the speech – I actually took them off of the podium, crumpled them up and threw them on the ground, so they could see that I would. And I said, here’s the deal: I understand you’re angry, and I understand you’re frustrated, and I understand you feel deceived and betrayed. And the reason you feel all the things is because you have been deceived and you have been betrayed. And for twenty years, governors have come into this room and lied to you. Promised you benefits that they had no way of paying for, making promises they knew they couldn’t keep, and just hoping that they wouldn’t be the man or women left holding the bag. I understand why you feel angry and betrayed and deceived by those people. Here’s what I don’t understand. Why are you booing the first guy who came in here and told you the truth? See, there is no political advantage to me coming into that room and telling the truth. The way we used to think about politics and unfortunately the way I fear they’re thinking about politics still in Washington DC. See, the old playbook says lie, deceive, obfuscate and make it to the next election. You know, there’s a study that says by 2020, New Jersey is one of eleven states whose pension could be bankrupt. And when I told a friend of mine about that study, he said to me, well wait. By 2020, you won’t be governor. What the hell do you care? That’s the way politics has been practiced in our country for too long and practiced in New Jersey for too long. So I said to those firefighters, you may hate me now. But fifteen years from now, when you have a pension to collect because of what I did, you’ll be looking for my address on the internet so you can send me a thank you note.
One last point about the current debate over public sector unions. These and the many other criticisms of public sector unions are not new. Yet, instead of meaningful responses to these arguments or explanations of their abuses, public union supporters have offered no direct justifications for maintaining a regime that enables public sector unions to collectively bargain at less than arms’ length, in an anti-democratic process that pits unions against elected officials with a mix of political and soft economic objectives, while holding hostage the public who depends on the services they provide. The train of public sector union abuses, then, are not mere anecdotes, not mere loose ends to be tidied up with corrective legislation. They are symptoms of a systemic problem. It’s a feature, not a bug. Public union supporters thus send a strong message by their failure to acknowledge these systemic problems, their refusal to come to the table to discuss solutions, their stubborn insistence on continuing to hand out lavish benefit packages at the expense of future taxpayers, and, in the case of Wisconsin Democrats, their fleeing the state to prevent discussion or reform of serious issues relating to the public welfare. That message is, sadly, that Democrats are politically invested in unions, and will not countenance any reforms that will dilute the power of that political stronghold. The support for public union collective bargaining cannot be explained by anything other than dirty politics.