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Wisconsin’s Budget Fight is Only the Beginning

February 23rd, 2011 at 11:18 pm David Frum | 58 Comments |

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What you are watching in Wisconsin is your future.

Since 2007, Americans have lost trillions of dollars in wealth. And ever since, we’ve been arguing about who should pay and who should be protected.

Wisconsin represents the next — and most painful — round of the argument. During the good years, states and cities made retirement promises to their workers. When you total all the promises – and compare them to the money set aside to pay the promises — you reach a gap of more than $1 trillion, according to the Pew Center on the States.

Where did the trillion go? Some was lost in the declining value of investments after the dot-com crash in 2000 and the financial crisis of 2008. Some of the trillion was unexpectedly added as rising health-care costs inflated the projected costs of state-worker retirements. But the largest part of the trillion dollar gap was accumulated by wishful thinking and political cowardice: States making workers happy by promising them payouts in the future, and trying to keep taxpayers happy by neglecting to set aside the necessary funding in the here and the now.

So, now a question: out of whose pockets should that trillion come? Should state workers be disappointed? Or should taxpayers pay?

There’s no ready answer to the question.

State workers have some valid complaints: states made contracts with them, they relied on the contracts, and now they expect the contracts to be honored. But taxpayers have a complaint too: Private-sector workers earn less than government workers. They enjoy less job security. And now they’re expected to pay an unbudgeted extra trillion in taxes to support the superior health and retirement packages of the public sector?

If there’s no ready answer, then how is the issue to be settled?

In the New York Times this week, David Brooks offered a wise ideal: “The cuts have to be spread more or less equitably among as many groups as possible. There will never be public acceptance if large sectors of society are excluded.  … [T]here is going to have to be a credible evaluation process to explain why some things are cut and some things aren’t. … The process has to be balanced. It has to make everybody hurt.”

Brooks describes exactly how the job of adjustment should be done. He also is describing exactly how the job won’t be done. The United States is not the country of rational and disinterested decision-making for which Brooks and so many others yearn. Maybe it once was that country, but it is not that country now. As we have seen through the debate over TARP, over stimulus, over healthcare – and now over public-sector pensions — whoever can muster the more powerful interest groups, whoever can mobilize more public anger, that side gets its way.

Bondholders have more muscle than mortgaged homeowners. Seniors have more muscle than the young. Upper-income taxpayers have more muscle than the unemployed.

So those first three groups usually win, and the latter three groups usually lose.

The public-sector workers of Wisconsin have learned that lesson, and they are adapting it. They want to break Gov. Scott Walker before he breaks them. They chant slogans about justice. But there is no justice, there is only muscle. The unions are flexing to test how much muscle they have. The taxpayers of Wisconsin — and all the other states to which this battle will soon come — have no choice but to do the same.

Originally published in The Week.


Recent Posts by David Frum



58 Comments so far ↓

  • arvan

    …there is no justice, there is only muscle.

    So insightful, and so disappointing. The Republicans have seized on this, made it their mantra. The Democrats are coming to grips with the fact that they can either do the same, or lose everything. The days of America acting intelligently and doing great things are over, all because some robber barons decided they’d rather loot the nation, and had the muscle to do it. Now we’ll have class warfare for a while, as they continue to loot and the middle class fights desperately to stay afloat. Whoever wins, it’s unsustainable in the end. You can’t run a government based on lies.

  • valkayec

    arvan, I could post a long comment on this subject, but you’ve summed it up quite well. The loser in this political game nationally will be the common worker and taxpayer. The wealthy will take their gains and move to London or Moscow or Dubai or Mumbai or Signapore and continue as always. They have no loyalty to this country or its people, as Chrystia Freeland writes in her Atlantic Monthly article.

    http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

  • politicalfan

  • hopitab

    The situation in Michigan, though not gaining much attention, is even worse: the budget cuts will result in closing half the public schools in Detroit and the average class size in the high schools will be 60. That’s not simply the poor lacking muscle, it’s writing them off entirely.

  • Nebraska Admiral

    There isn’t anyone to root for here. The unions are right– the benefits their members currently enjoy were created via valid, open contracts with the states and municipalities. However, shame on them for taking such advantage of the public; everyone who cared, knew that the projections many of these pension/benefit programs are built upon were bogus.

    On the other hand, this is what happens when most of the citizenry is disengaged and apathetic. The country is full of people who can’t name their Congressman or state legislators, yet pat themselves on the back for being good citizens after voting in the Presidential elections every four years. We don’t exercise proper supervision over our elected officials, especially at the state and local levels.

    The existence of public employee unions is probably the most damaging example of political corruption in America. The unions are basically a collection of highly-organized special interest groups that use their financial clout to elect the officials who then are supposed to bargain with them in good faith on behalf of the taxpayers; both sides know that the continued flow of campaign donations depend on how “receptive” the politicians are to the unions’ demands. If this isn’t a corrupt process, please explain to me how.

    • Nanotek

      “The existence of public employee unions is probably the most damaging example of political corruption in America. The unions are basically a collection of highly-organized special interest groups that use their financial clout to elect the officials who then are supposed to bargain with them in good faith on behalf of the taxpayers; both sides know that the continued flow of campaign donations depend on how “receptive” the politicians are to the unions’ demands. If this isn’t a corrupt process, please explain to me how.”

      oh please; as opposed to Koch heads? Billionaire heirs with an agenda and legions of skilled lobbyists and aspiring sycophants have the edge now … but Walker may have awakened a sleeping giant

      hope so

    • COProgressive

      “The existence of public employee unions is probably the most damaging example of political corruption in America. The unions are basically a collection of highly-organized special interest groups that use their financial clout to elect the officials who then are supposed to bargain with them in good faith on behalf of the taxpayers; both sides know that the continued flow of campaign donations depend on how “receptive” the politicians are to the unions’ demands.”

      Oh come on. That’s a stretch. There are special interests on both sides of the equation and the politicians know how to play to both labor unions and business as well. Both get favors in return for support in elections. For every dollar the politicians give labor unions they give two to business interests. When was the last time a professional sports team built their own stadium? They are all built with public money.

      But for the Governor to lay the burden of repairing the budget on the shoulders of the State workers is shameful, and to attempt to remove the workers collective bargaining rights just to protect the politicians from having to negotiate in good faith is just despicable.

      The budget crisis isn’t the workers fault and they have offered to share the burden of cutting back. The issue here isn’t fiscial, it’s a attempt by a rightwing governor to bust the union and he’s using the budget crisis as a tool to do it.

      “This and no other is the root from which a tyrant springs; when he first appears he is a protector.” Plato

    • JimBob

      “The existence of public employee unions is probably the most damaging example of political corruption in America. The unions are basically a collection of highly-organized special interest groups that use their financial clout to elect the officials who then are supposed to bargain with them in good faith on behalf of the taxpayers; both sides know that the continued flow of campaign donations depend on how “receptive” the politicians are to the unions’ demands. If this isn’t a corrupt process, please explain to me how.”

      Excellent. I find it amusing as Jerry Brown and Andrew Cuomo have now seen the light. Their respective states are being taken to the cleaners. The idea that you can retire at 50 for 80-90 percent of your final pay with a golden parachute full of benefits is absurd.

      When government unions strike, they strike against taxpayers. F.D.R. considered this “unthinkable and intolerable.”

      “It is impossible to bargain collectively with the government.” George Meany — the former president of the A.F.L.-C.I.O — in 1955

      Public sector unions insist on laws that serve their interests — at the expense of the common good.

      The Difference Between Private and Public Sector Unions

      http://reason.com/blog/2011/02/23/the-difference-between-private

  • spikeytx86

    The Unions have already agreed to all of the Governors financial concessions, they just want their collective bargaining rights preserved in return. The Governor however won’t agree. I completely agree that unfortunately promises made at a very different time will need to be scaled back in order for states to remain solvent. But this goes way beyond that.

    This is an ideological attack by elected officials who loathe the very existence of Unions and they have proven they will use any means possible to try and bust them.

  • Raskolnik

    The fight in WI is not about the money. It is about collective bargaining rights, which should exist for whomever wishes to bargain collectively; I feel like there are potentially even First Amendment issues here.

    The problem with public sector unions is the state-sponsored monopoly that certain unions (like the teachers’ union) possess. In effect, teachers are forced as a condition of employment to join the only union allowed under law. The end result is that union bosses and union workers are no longer working toward common goals, since the union leaders want to maintain their legal monopoly even at the expense of those workers whose interests they supposedly safeguard. Any workable solution is going to have to involve removing the monopoly on legal representation afforded to some unions.

  • hisgirlfriday

    This is WAY bigger than just balancing a yearly budget folks!!!!

    When will Republicans and Democrats across this country start considering that maybe just maybe Reaganomics, Clinton’s NAFTA and growing privatization of the public assets and services over the last ten years just wasn’t that good a deal for average Americans?

    It certainly has been a total ripoff for the Midwest. The people who are protesting in the state capitals in the Midwest aren’t just there over public employee pensions. I mean look at the bill in Wisconsin. It’s NOT just about public unions. It also has huge implications for the state’s public universities, local schools, and health care programs. It also has suspicious provisions that allow the sale of state assets in no-bid contracts. The people in Madison aren’t even just mad about this bill either. They’re protesting what 30+ years of pro-corporate interests (advanced by both right-wing anti-tax think tanks and their “moderate” Democratic counterparts like the DLC) empowered by Southern (or Southern-minded) politicians of both parties and what their agendas have done to the Midwestern way of life.

    I know us “fly-over” Midwesterners in Big Ten country don’t talk about our way of life much, and we certainly haven’t organized any Grand Army of the Republic rallies lately like the Confederate enthusiasts do, but maybe we should. Maybe then people would pay attention to us. Maybe people would be forced to remember us in the Midwest who made this country the economic power it was in the world. Our rich soil, our public research universities, our factories have brought more prosperity to this country than all the Wall Street banks and Ivy League colleges and Southern politicians put together… many times over.

    Yet for the last thirty years our way of life has been under attack.

    Big Ag has priced the family farmer out of being able to afford the business in many cases and Big Ag gets the lion’s share of our country’s farm subsidies.

    NAFTA and all our other trade deals have seen so many of our jobs, both blue AND white collar, outsourced and left our formerly prosperous middle class communities ravaged (not just in Michigan and not just in the big cities like Detroit).

    Here in the Midwest we also care a lot about public education. Our state’s identities are tied up in our public universities not just in terms of their athletic prowess but by the affordable world-class academic opportunities they offer us here. Yet for every middle class family they are finding their once perfectly affordable to the middle class universities no longer affordable because of drastically shrinking government funding dedicated for higher education.

    And now the Midwest’s unions that have already seen their salaries and benefits slashed, jobs cut, pension promises unkept are now having to fight Republicans for their very right to even exist because they’re supposedly standing in the way of prosperity when union workers really haven’t seen any increased prosperity the last 15-20 years? When did the union worker/teacher/public servant become the new “welfare queen”?

    And do Republicans really think this demagoguery and austerity in tough times is a winning electoral strategy?

    Americans care about JOBS right now. Obama lost because he focused on reforming employer-based healthcare at a time when there weren’t enough employers hiring. Sure, Americans care about the deficit, yes, but if you asked them, they’d tell you pretty emphatically that they’d rather you end the wars to close the deficit rather than cut off funding for roads or their kid’s teacher’s salary.

    • JimBob

      The Midwest and rust belt have seen a decline in manufacturing jobs. Some due to mechanization and others because employers moved plants overseas, Mexico, or to right to work states. They are fleeing unions. BMW, Toyo, Volvo, Mercedes, Honda, Hyndu, and KIA are all built in the United States now. But none are located in the upper Midwest or Northeast. Don’t want to mess with the unions.

  • balconesfault

    But taxpayers have a complaint too: Private-sector workers earn less than government workers.

    I continue to argue that this is a manipulation of data.

    For example, I know a number of engineers and lawyers in state jobs here in Texas who are earning 60% – 70% of what they’d make in the private sector.

    Perhaps when you talk about a lot of lower skilled job – say, custodial and maintenance staffers, drivers, technicians, etc – the state wages are better. In large part because public sector jobs actually pay wages and benefits that everyone has agreed are necessary to support a family, enable someone to put kids through college, provides for old age – while this is not a concern in the private sector, and many private sector employees doing these jobs are contract workers who always live their lives one step from the unemployment or welfare rolls.

    The problem isn’t that public sector employees in America are coddled – it’s that once you get below the top 20% of wage-earners, private sector employees in America have been being screwed by our system.

    • sparse

      yes, well argued as usual. i’d like to see the total compensation of private sector employees include their share of the burden on state unemployment insurance and welfare/food assistance funds. jsut because the private sector can unload some of their costs on the public sector does not men the costs do not exist.

  • Raskolnik

    Balconesfault (as usual) has some very good insights. “Minimum wage” laws are a distraction; the issue is not precisely how much of a salary and/or benefits is fair. The issue is that there exists in the United States a corporate overlord class which has promulgated the rhetoric of capitalism while thriving on state subsidies (aka socialism). Rush Limbaugh is absolutely right: there is going to be a “class war” in the United States, in fact it already began in the Midwest. What he is mistaken about is thinking that he is fighting on the side of God, capitalism, and the average American.

  • Nebraska Admiral

    COProgressive:

    “But for the Governor to lay the burden of repairing the budget on the shoulders of the State workers is shameful.” Shameful? Are there any conditions at all in which you would concede that goverment workers should have to take a cut in pay or benefits? Private-sector employees are exposed to much harsher conditions in bad economic times. What is “shameful” about the idea of goverment employees being required to contribute modestly to their (very generous) benefits and pensions, while retaining their still-reasonable salaries and enviable job security?

    “For every dollar the politicians give labor unions they give two to business interests. When was the last time a professional sports team built their own stadium? They are all built with public money.” I couldn’t agree more. But I also don’t think that one form of governmental corruption (corporate givaways) justifies another (excessive and unsustainable buyoffs to unions in exchange for their campaign contibutions).

    • dante

      Uh, state workers in WI have ALREADY given up 5% of their pay in the last 3 years. That’s ZERO wage increases, and a 5 % pay cut (2% direct wage reduction + 3% in furlough days). Now they’re already giving in to the provisions that require them to pay more in health care and pension costs. The fight is ONLY about bargaining rights now, not about money.

      Oh, and David, you have a straw man’s argument here. Wisconsin’s pension fund is 97% funded and one of the strongest in the nation. We don’t NEED these drastic reductions in public salaries. Walker just WANTS them. I understand that you want to make the point that the rest of the country has these problems, but you might want to double-check what’s actually going on here before using us as an example of budget malfeasance.

  • JeninCT

    wishful thinking and political cowardice

    This is the essence of our problem summed up in five words. Anyone trying to blame it on either greedy robber barrons or runaway unions is simply a partisan.

  • Smargalicious

    Of course it’s only the beginning.

    Communities are packed with millions of social parasites created by liberal entitlement policies. They collect their free birth-to-death freebies and giving nothing back except crime, corruption, and filth.

    Time to take back our communities, no?

  • talkradiosucks.com

    Don’t feed the troll.

  • Houndentenor

    The best example of political corruption in America is the revolving doors between Wall Street and the Treasury and the Fed and between the Military and Military contractors. A close second would be that corporations make huge donations and get back more in return from the government in corporate welfare (not one cent of which was “cut” in the GOP proposal).

    • Nebraska Admiral

      Again, one example of political corruption does not justify another. And government unions funding the campaigns of government officials who then increase their salaries and benefits is undeniably corrupt. Unions are (in theory, if not always in practice) a great idea for the private sector. Unions in the public sector are political corruption in action, and harm the public interest.

      • TerryF98

        In this very bill is a provision that the governor can sell off state assets (power gen, cooling etc) with no bid contracts at no minimum price to whoever he wishes with zero public input.

        The giant Koch company who are in the power and cooling industry gave 1.5 million to elect Walker. They have set up a powerful lobbying shop within days of his election, he is happy to take 30 minute calls from billionaire “Koch” to discuss union busting tactics.

        THERE IS YOUR CORRUPTION GENTLEMEN.

        • Bagok

          Just to put some numbers around this.

          The state owns several very small power plants totaling about 10mw (universities, prisons and state hospitals). All told, there are 32 state owned heating/cooling/power plants in Wisconsin. When this idea was last proposed in 2005 the total assets were about $235 million with $90 million in debt.

      • ottovbvs

        ‘And government unions funding the campaigns of government officials who then increase their salaries and benefits is undeniably corrupt.’

        But corporations and trade associations funding the campaigns of govt officias who then give financial advantages or protections to those corporations isn’t? Apparently you think strong action should only be taken against one group namely Public employees some of whom are fulfillling a crucial role like educating children. The fundamental problem is that any group with monopoly or semi monopoly power and this includes the oligopolies that run most of the US economy as well as public sector unions tends to abuse its power. For every NYC teachers union with it’s rubber rooms I’ll trade you a Wal Mart that has had pay hundreds of millions in settlements because of employee abuse. In these very imperfect circumstances muscle counts and why shouldn’t the public employees use their’s a much as say major banks to get themselves rescued. I’m not a huge fan of unions, I believe that generally the police unions get away with murder, literally in some cases, but I’m unutterably opposed to the removal of their bargaining rights which is basically an assault on freedom and you can’t say one group has all sorts of rights to organize do pretty much whatever it wants to further its members interests ( US Chamber of Commerce?) but unions don’t. Or are you advocating a return to around 1900 when there were restrictions on workers organizing rights but none on manufacturers right to form cartels.

      • sparse

        admiral-
        thanks for your response. i agree that one form of corruption does not require us to tolerate others. but i would ask you to dig a little deeper and make your case for why public unions are corrupt.

        you cite that their membership’s wages and benefits go up as proof of corruption. but so do everyone’s in an inflationary world. while it is true that wages for the lower 90% of americans by income has been flat for a while, i think a lot of that is because unions in the private sector are shrinking.

        i share some of your discomfort with the idea of public sector unions, but i think it is incumbent on you to bring more solid evidence of corruption before asserting it. the idea that we need to, in a giant rush and without sufficient debate, use the power of the state to void contracts and long-standing status-quo (when a few simple adjustments to rules could provide the same safegurads) is far more discomforting to me.

      • dante

        As opposed to corporations funding political campaigns of politicians who in turn give them no-bid contracts and closed-bid sales of Wisconsin power and heating/cooling plants?

        The Koch brothers just bought $350,000 worth of ad time on WI’s tv stations to protect their puppet… Are you telling me that they just feel like doing that with zero ROI??

  • NRA Liberal

    The Democrats once knew how to play the “only muscle” game, in the days of John L Lewis and Walter Reuther. Maybe they’ll re-learn that lesson.

  • ottovbvs

    Obviously DF is not aware of the polls showing quite clearly that in both WI and nationally a majority of the public oppose the removal of collective bargaining rights. Once this became an argument over public workers freedom to bargain it was clear Walker had over reached and, as Brooks pointed out, was likely to come unstuck because however these disputes are resolved they have to be perceived as broadly fair. All Walker had to do was threaten layoffs and the unions would have come to the table and negotiated down some of their bene’s. Indeed they have already indicated there’s willingness to do that but this has now morphed into a battle about workers rights and Walker has made two huge presentational errors already (exempting certain unions like the police who are generally one of the most abusive public sector unions and the “Koch” call) which have laid completely bare his motives. Then it does indeed come down to a question of muscle, as these sort of battles always do. And public workers have a lot of muscle. Even if Walker and the Republicans can hustle this through procedurally the public workers ( and it’s much more than just teachers btw) will launch a campaign of passive resistance. All perfectly legal (well mostly) that will exploit every legal and operational means to avoid cooperation and throw sand in the gears. Conservative idealogues will scream but they use just the same muscle to pursue their goals. The end result will be to bring the state of WI to chaos. And within ten months (I think) they can start organizing recall petitions. Walker is not going to win this one (I think this is the subtext of DF’s comment). He’d be well advised to take the most contentious stuff off the table, negotiate down the workers pay/benefits, and declare victory.

    • geojen

      We can start circulating petitions in November–believe me, this will happen. Whether or not he is re-elected, he’s probably going to have to run again. We’re pissed up here in dairyland.

  • takvar

    I have seen figures as high as 3 trillion in losses nationally, but based on your figures, I guess most of that has come back as the stock market has recovered from the Recession. Ironically, Wisconsin does not have this problem, as its pension fund is one of the strongest in the country.

  • Smargalicious

    On a related topic–the University of Wisconsin School of Medicine is investigating the disturbing and disgraceful writing of fake sick notes by some of its doctors to excuse teachers who decided to bail from their jobs. It’s the right call. But an investigation is not enough–the state Medical Examining Board of the Department of Regulation and Licensing needs to reprimand these doctors and consider handing down suspensions. This is really scraping the bottom of the barrel.

    • ottovbvs

      Shocking… Great… suspend these doctors right to practice, they then quit the state move elsewhere and easily get new jobs because there’s a shortage of doctors, so the consequence is damage to the state. Republican governance at work.

  • TerryF98

    Even Fox news understands what is going on here. Well at least one person does.

    ” On Wednesday’s “Studio B,” Shepard Smith said the battle over union rights in Wisconsin was all about busting unions and securing Republican political power, not about the state’s budget deficit.

    It was a take that placed Smith squarely in agreement with people such as Rachel Maddow, who has repeatedly argued essentially the same thing on her show.

    Speaking to a mostly-in-agreement Juan Williams, Smith said the fight was “100 percent politics.”

    “There is no budget crisis in Wisconsin,” he said, adding that the unions “[have] given concessions.”

    The real point of the fight, Smith said, could be found in the list of the top ten donors to political campaigns. Seven out of the ten donated to Republicans; the other three were unions donating to Democrats.

    “Bust the unions, and it’s over,” Smith said. He then brought up the Koch brothers, the billionaires who have bankrolled much of the anti-union pushback in Wisconsin. The fight, Smith said, “started” with the Kochs, who he said were trying to get a return on the money they donated to Walker’s campaign.

    “I’m not taking a side on this, I’m just telling you what’s going on…to pretend this is about a fiscal crisis in the state of Wisconsin is malarkey,” Smith said.”

  • armstp

    I find most of these arguments about deficits, debt, benefits, et al mostly BS and misdirected. They completely miss the point.

    The reason budgets, deficits and debt is an issue right now is because of the economic downturn. Tax revenues have dried up. Period. And guess what happens when the economy recovers. The tax revenues come back and budgets improve and deficit go away.

    If you look at the actual numbers that is what they tell us. If you look at government spending, it really has not gone up and in fact may have gone down, at either the local or federal level.

    It is a revenue problem not a spending problem, which is being purposely exaserbated by the continued march to further tax cuts, even though tax collection is at it lowest level since 1950. Wisconsin is a perfect example. Recent tax cuts have entirely created the deficit in that state. It has nothing to do with Unions or spending.

    There is no need for draconian spending cuts, to eliminating unions or whatever.

    Finally a conservative economist with some sanity:

    “Does the U.S. Really Have a Fiscal Crisis?” by Simon Johnson

    “The United States faces some serious medium-term fiscal issues, but by any standard measure it does not face an immediate fiscal crisis. Overly indebted countries typically have a hard time financing themselves when the world becomes riskier — yet turmoil in the Middle East is pushing down the interest rates on United States government debt. We are still seen as a safe haven.

    Nonetheless, leading commentators and politicians repeat the line “we’re broke” and argue that there is no alternative to immediate spending cuts at the national and state level.

    Which view is correct? And what does this tell us about where our political system is heading?”

    http://economix.blogs.nytimes.com/2011/02/24/does-the-u-s-really-have-a-fiscal-crisis/?partner=rss

  • talkradiosucks.com

    Smith is one of the very few fair voices on FNC. Good for him.

  • PracticalGirl

    Ignorance alert: I think I read a smart post from a smart poster on another thread about the relative HEALTH of the Wisconsin pension fund…If so, then the reasonable argument of this article isn’t applicable to Wisconsin which began to pull itself out of its budgetary nightmare two years ago and doesn’t have a pension funding issue.

    Did I dream this, or does somebody have the link?

    • TerryF98

      You may be thinking of this post. If so I take the compliment, if not I suck!

      TerryF98 // Feb 23, 2011 at 8:11 am

      “We’re going to ask our state and local workers … to pay a little bit more, to sacrifice, to help to balance this budget,” Walker said in a Sunday interview with Fox News’ Chris Wallace, adding that he would be forced to lay off 5,000 to 6,000 state employees if his budget plan was not approved, as well as a comparable number of local public employees.

      But the Wisconsin pension fund is simply not in fiscal trouble. Its managers weren’t burned by subprime mortgage assets or mortgage-backed securities as the housing bubble collapsed. The fund also relies on an automated dividend system, which pays out benefits in years the system is making gains while restricting payouts in years when it takes losses. And while the pension fund had a rough year during 2008 due to stock market losses, it remains robust, both in terms of fundamental financial stability and in comparison to other state pension programs.

      According to the Pew study, Wisconsin had about $77 billion in total pension liabilities in 2008. But according to that same Pew study, those liabilities were 99.67 percent “funded,” giving Wisconsin one of the four-highest of such ratios in the nation. Other states had funding ratios as low as 54 percent. For comparison, expert analysts and the Government Accountability Office consider an 80 percent level to be a good benchmark for pension fund stability, while Fitch Ratings considers 70 percent adequate.

      It’s not about money it’s about busting unions.

      • PracticalGirl

        Take a bow. You answered the question a day before it was asked. I get 2.5 points for reading comprehension/retention. Thanks for the refresher.

  • cdorsen

    This is the reason public sector unions should not have existed in the first place. That is what has created this mess. If private sector management makes sweetheart deals to unions and it bankrupts them, the owner(s) loses, the union loses, but the overall public is largely left out of it. And, the owner(s)/management have a large incentive not to allow such deals. And, if it threatens to terminate the company’s existence, thus threatening the workers employment altruistically, the union is forced to renegotiate or face the loss of everyone’s job.

    The public sector and it’s workers is a whole other ballgame. The rules and the players are different. No one (avoiding health care debate here) is forced to buy a private sector product, work for a particular private sector company, or fund one. Taxpayers are forced to fund government workers, period. Also, the government will never cease to exist, or the country, state, or municipality will cease to exist. So, there is no worry of overloading the system too much and threatening it’s very existence. Government unions can also help those that manage them get jobs by donating and campaigning for them which they do to great effect. ‘I get you elected and you get me better benefits’. If that is not a quid pro quo, I don’t know what is. There is no such quid pro quo in the private sector. The bottom line is there is no check on union power which upsets the balance between union and management that exists in the private sector. That is the problem and what we are seeing the result. I have no problem with private sector unions, but public ones need go. Public employees should serve the public, but now it is the public serving the unions with taxpayer dollars.

    • Non-Contributor

      Now you need to provide some data because I don’t believe anything you wrote.

      “This is the reason public sector unions should not have existed in the first place. That is what has created this mess”

      - What created this mess was the financial meltdown which led to high unemployment.

      “If private sector management makes sweetheart deals to unions and it bankrupts them, the owner(s) loses, the union loses, but the overall public is largely left out of it. ”

      - I think people in Detroit would disagree with that. Management that makes bad deals with unions are consciously deferring costs to some point in the future when they do not have to worry about there fortunes being touched. Private sector “sweetheart” deals are specifically designed for the top 1% to win.

      “No one (avoiding health care debate here) is forced to buy a private sector product, work for a particular private sector company, or fund one. ”

      - This comment is designed to confuse the fools. Guess what, you can’t compare the government to a business. When you buy a product you trade one for one transaction is complete. When you pay taxes you get services that benefit society. So it is implied that not everyone will like what they are paying taxes for (a single person paying for education of K12) but in aggregate it is highly beneficial. Now the greed of the Koch like elite would like everyone to pay them for education, roads repairs, health-care to make them even more wealthy then they already are, sort of like kings. And to do this they will lie about how much money they will save everyone because they want you to believe government is too big and inefficient. But what people don’t think through is that when you take the price of say K12 education and make parents pay for their kids it becomes unaffordable for most. Additionally corporations like 40% gross margins on products that will net them double digit net margins. Those margins are much more expensive than government even if it was very inefficient. Fools believe these lies because they are fools.

      “Government unions can also help those that manage them get jobs by donating and campaigning for them which they do to great effect.”

      - Somehow because you work in the public sector you cannot have a political opinion? Do you think that the public sector unions in Wisconsin spend more then the Koch Brothers? Do you think the Koch Brothers will not benefit for union busting?
      Fool.

      “The bottom line is there is no check on union power which upsets the balance between union and management that exists in the private sector. ”

      - If that is true then explain this –

      http://baselinescenario.com/2011/02/22/conventional-meaninglessness/#more-8707

  • Non-Contributor

    They, the rich, get richer while the fools fight over table scraps.

    They scare the fools with numbers that seem so exorbitant the fools get confused. They inflame the fools into believing falsehoods so that the fools eat their own flesh. They confuse the fools so that the fools forget what to fight about. They ensure the fools that They are the most important and the fools are what they are.

  • ottovbvs

    cdorsen // Feb 24, 2011 at 9:57 am

    “This is the reason public sector unions should not have existed in the first place. That is what has created this mess.”

    So why are states where public sector unions are weak in essentially the same fiscal boat?

    “is forced to buy a private sector product, work for a particular private sector company, or fund one.”

    Really? Home insurance? Car insurance? Specific drugs? Airlines flying out of a particular hub? And when it comes to industrial products the choices are often very narrow. The fact is although you apparently don’t understand it, most of the US economy is controlled by oligopolies. And within the past two years we’ve all been forced to fund a number of private sector companies like AIG. It was the right decision but if you want to argue principles which you are you’re completely wrong in your claims.

  • TerryF98

    Still think this is about money and budgets?

    Then read this.

    http://thinkprogress.org/author/Lee%20Fang

    As ThinkProgress has reported, the global conglomerate Koch Industries not only helped elect Gov. Scott Walker (R-WI), but is the leading force orchestrating his union-busting campaign. Koch gave Walker over $43,000 in direct donations and its allies aired millions of dollars worth of attack ads against his Democratic opponent. Then, Koch political operatives pressured Walker to crush labor unions as one of his first priorities. Tim Phillips, a former lobbying partner to Jack Abramoff and current president of Americans for Prosperity, a front financed by David Koch, told the New York Times that Koch operatives “had worked behind the scenes to try to encourage a union showdown.” A Koch-financed front group, the American Legislative Exchange Council, has prepped Wisconsin GOP lawmakers with anti-labor legislative ideas.

    Today, the Koch group Americans for Prosperity announced that it will air an ad smearing the protesters in Madison and calling on the state to support Walker’s power grab. As we noted on Friday, Koch has demanded that collective bargaining rights be curtailed for both private and public sector unions, a step beyond Walker’s already extreme move. The ad disparages the pro-labor protesters for allegedly bringing in “out of state political protesters.” In fact, the small pro-Walker demonstration orchestrated by Koch operatives last Saturday included a number of out of state conservative activists, including Herman Cain (from Georgia), Jim Hoft (from Missouri), and Phillips (from Virginia). Watch the ad:

    AFP NARRATOR: Democratic legislators don’t even have the guts to show up for their jobs, hiding out in other states. President Obama backs the union bosses and floods the state with out of state political protesters. Governor Walker has the courage to do what’s right for Wisconsin. Stand with Walker.

    Watch it:

    Last year, at a Koch-organized fundraising meeting in Colorado attended by fellow right-wing billionaires like Steve Schwarzman and Phil Anschutz, attendees discussed strategies for taking down the labor movement. As MSNBC’s Rachel Maddow has explained, the right’s national anti-union campaign has little to do with budget deficits. Instead, it is about defunding the progressive movement and weakening Democrats in the longterm.

    Moreover, Koch’s political activism on behalf of Walker is also a strategy for increasing its profit margin. Koch Industries has a large set of businesses within Wisconsin, including a network of oil pipelines, paper plants, and coal companies. The Walker administration is signaling a very Koch-friendly approach in targeting environmental regulations and going on record with fierce opposition to clean energy policies.

    To take full advantage of such a friendly local government, Koch Industries quietly expanded its lobbying operation in the state. Koch has a new government affairs office in Madison, and according to reporter Judith Davidoff, recently registered seven full time lobbyists to work with the Republican-led government in Wisconsin.

  • Honestly 22

    Interesting, I just went to WI gop website and your somewhat blocked or limited access to the site unless you sign a pledge of support to Gov. Walker.

    http://www.wisgop.org/

    Anyone else have a problem here? Am I to assume that unless I support Walker, I have limited access?

    • politicalfan

      Clearly about making money from supporters not living in Wisconsin. I am sure both sides will get support.

    • dante

      You can click on the outside of the popup and get around it, but even in WI I’m getting it as well.

      There’s also a rumor (?) that people are walking around the capitol building with sheets of paper for a “recall”. What they’re hiding is that it’s to recall the DEMOCRATIC senators. Not sure if it’s true, but I wouldn’t put it past the GOP these days.

  • Tempest in a Frumpot

    cdorsen, another follow up to this quote:
    This is the reason public sector unions should not have existed in the first place.

    Do you think Nurses who work for private sector nursing homes should be allowed to Unionize but Nurses who work for County nursing homes should not be? Essentially you are stating that County nursing homes should be left with the dregs of the Nursing community. Do you or have you ever worked for a nursing home? Even in this economy there are a lot of shortages. There is no good reason why County nursing homes should be forced to place their patients at risk just because it does not conform to your political ideology. And what of County hospitals? Do you really want to show up at one with staff who go there because they didn’t get hired by Unionized Private Hospitals?

  • JimBob

    “As taxpayers in California, Wisconsin, Indiana, and many other states are realizing, the future has arrived. The Wall Street Journal reports that state and local governments in the United States currently have $3.5 trillion in unfunded pension liabilities. They must either raise taxes dramatically to fund these liabilities, as some have already done, or drastically cut back or eliminate government-employee pensions.”

    http://mises.org/daily/5072/The-Political-Economy-of-Government-Employee-Unions

    Sorry progressives or liberals whatever it is you call yourself these days, but the numbers just don’t add up. They never have. It is coming to a head. What’s Jerry Brown going to do. If he raises taxes more employers will pick up and leave. Too many states out there with a friendly business climate.

    • dante

      JimBob – As has been stated many times now (by me), the WI bill is made up of two parts:

      1) Budget issues: These have a price tag attached to them by the state’s fiscal oversight board, and have definitive savings for the state’s bottom line. These have been AGREED TO by the Democrats/unions.

      2) Non-Budget-Policy Issues: These do NOT have a price tag attached to them by the state’s fiscal oversight board. Every single one of those saves NO MONEY. Not my words, but Gov Walker’s. These are the things that are being fiercely debated. Everything from the closed bid (with no legislative oversight) of state assets (power plants, etc) to making union dues optional. THIS IS WHAT THE FIGHT IS OVER.

      It’s not about money. It’s not about the state’s fiscal situation. It’s about power. It’s about crushing unions. It’s about doing all of the things that the Koch brothers want their puppet to do.

      So please, give me a break about the “state budget finances” because this is SO MUCH MORE THAN THAT.

      Thanks.

  • Primrose

    I’m not sure JimBob, why the refusal to fund pension funds is the liberals fault when the push for tax breaks came from the right?

    I think it is a good article Mr. Frum, but I don’t think you can say that the Wisconsin workers are abusing their muscle when they’ve already said they’ll pay more despite contracts (so much so that I’ve periodically suspected that this is just a negotiating ploy on Walker’s side).

    You don’t highlight that these states are STILL insisting on tax breaks for the wealthy. So the governors are saying that we can’t honor your contracts, because oops, we failed to fulfill our fiduciary duty (a legal obligation) but we can continue the practice that caused made us fail that duty. That line of argument seems a lot more like a shell game than responsible fiscal behavior.

    • JimBob

      Public unions need to be broken. One state after another is on the edge because of the unions

  • quell

    Since 2007, Americans have lost trillions of dollars in wealth.

    missed a spot, Frum. What about the trillions of taxpayer dollahs expensed in futile and doomed foreign misadventures, like Viet Nam, Israel, Egypt, Iraq, and A-stan?

    as soon as the demographic timer goes off, we are taking your keys.
    forevah.

  • jhh112

    David’s points suggest that what we are headed into a repeat of history where the rich run over everyone else.

    It is important not to ignore an important detail about Wisconsin, which is that their yearly budget situation ain’t all that bad (and is far better than that in lots of the right to work states) and even more importantly, their state pension fund is ranked among the best in the US. From the Pew report on the pension gap:

    http://downloads.pewcenteronthestates.org/The_Trillion_Dollar_Gap_final.pdf

    “Some states are doing a far better job than others of managing this bill coming due. States such
    as Florida, Idaho, New York, North Carolina and Wisconsin all entered the current recession with
    fully funded pension plans.”

    Gov. Walker is hyping things up to castrate the WI public sector unions. But having lived in Wisconsin for a few years, I know that community cohesion there is among the strongest in the nation, and is similar to what one finds in northern Europe and Australia. And when even polls by the for-sale Dick Morris show that the WI public backs collective bargaining by 54-41 %, you can see what is driving the pushback against Gov. Walker.

    The last time the US went this route, the excesses became too much for even the genetic Republican President Teddy Roosevelt, and the modern era of US politics began.