Tuesday, February 22, 2011
The Taxpayer's Civil War
The protests in Wisconsin represent a split in American politics. Not a split between Republicans and Democrats, but between those who believe that the government should continue expanding, and those who see the continued expansion of governments as the greatest threat to their political and economic freedoms. This is not just a debate over budgets, it is a battle over political power, and it is the country's most fundamental split since the Civil War.
The combination of abuses of power by an out of touch liberal party, an economic recession and growing insecurity about America's future have touched off something that is more than a taxpayer's revolt. Instead it's turning into a showdown over the nature of government itself. Money is the engine of government. Tax revenues are meant to to fund the operations of government only through the decisions of elected officials. Which is why public officials who want to expand the size and scope of government need an electoral base of support. That electorate is created using wealth redistribution. Taxpayer money is siphoned off to a redistributive electorate, which delivers mass votes and campaign contributions. There's no way to halt the expansion of government, without taking on the redistributive electorate.
That is what's happening in Wisconsin. Public sector unions are one half of a political trust. They elect candidates and then "negotiate" contracts with them. The generous contracts turn into union dues which turn into contributions to the candidates. It's a big circle of corruption that goes round and round again. And it has brought states like California to their knees.
Bigger contracts mean bigger budgets which mean bigger taxes and less jobs. In order to keep paying off the unions, states strip themselves of everything but minimum wage and union jobs. Small businesses collapse. Big businesses outsource. Less jobs mean more workers on the dole, and a smaller tax base. Everyone gets poorer, except the skeletal workforces on the state payroll, and their contractors. The taxpayers will complain that the country isn't what it used to be, but they will go on hoping for a better tomorrow.
Call it 'Planned Poverty'. 'Planned Poverty' works as long as the economy keeps growing, politicians can keep manufacturing budgets that keep their state just ahead of imploding. It's done through a thousand tax hikes and fees, and financial gimmicks that hide the red ink. Like a beat up old car clunking down the highway, there's still forward momentum. But when the economy implodes, so does the whole mess. Suddenly there's no more money. But the redistributive electorate still has to be paid. The only way out is either massive tax hikes or a showdown with unions.
Wisconsin union leaders would rather see thousands of union members lose their jobs, than risk losing their power and privileges. Some union members understand this and covertly support Governor Walker's budget. But many others have gotten too used to the system. They don't understand that their union bosses and the democratic party have been exploiting them as ruthlessly as any employer would. It's been a velvet gloved exploitation, setting them up as a privileged class so that the party and the union leadership could keep robbing the public. Now the leadership and the party expect them to go out, scream and threaten the reformists who want to take away the power and privileges of the bosses.
Public sector unions don't just create higher end niche jobs for their membership, they shrink the available pool of non-union jobs. As successful predators they are at the top of the food chain, but their predation has also wiped out everything below them. Like wolves who have overhunted a territory, they have no more competitors and nothing for them to eat. In an economic crisis, that leaves their membership with few options. You either work for the government in some capacity, or you don't work at all.
This is the situation that most of the various redistributive electorates are in right now. They have been living in gilded cages. The wealth redistribution they have been benefiting from has impoverished their cities, counties, states and the country as a whole. The longer it has gone on, the fewer options they have outside the gilded cage. Some have never worked in the private sectors. Others have never worked at all. And thanks to them, there are fewer available jobs anyway.
Living in the gilded cage means benefiting from a corrupt system that's bankrupting the country. But their patrons have been hammering into their heads that they are not living in the gilded cage, the taxpayers are. The message they are getting from bosses, community leaders and politicians is that they are the victims. The poor unfortunate victims of the rich or of racism, and that it's up to them to fight for what's theirs. When actually they are the political mercenaries of a corrupt system, and their benefits and privileges pale besides those of the higher ups on the ladder above them.
Those who believe that government must continue expanding, for selfish or ideological reasons, have the redistributive electorate as their final line of defense in any conflict with taxpayers. Every regime has a ring of supporters who enjoys the benefits of being close to those in power. During the riots in the Middle East, their governments bring out those supporters into the streets. That is what's happening in Wisconsin. The unions have gone from being a revolutionary force, to being a counter-revolutionary force, an army of angry goons used to silence dissent by an angry public.
While the promoters of expanding government would like to frame this as a clash of class and race, it's neither. It's a struggle over the nature of government. The economic crisis took place not because Wall Street wasn't being regulated enough, but because redistributive policies had glutted Wall Street with bad loans. The market was reselling bad commodities, but it didn't originate those commodities. Like trees covered in rotten fruit, every state is full of its own bad commodities, bad deals and bad policies. And unprecedented numbers of Americans have recognized where the problem lies and what needs to be done about it.
This is not a war between the rich and the poor. For the most part it is a civil war within the middle class. The American middle class is shrinking and endangered. Too many Americans can foresee a day when, as in George Orwell's 1984, the remaining middle class consists only of government employees. And if government continues expanding, that is exactly how it will be. The choice is between a small subsidized middle class and a larger unsubsidized middle class. That is also what the taxpayer's revolt is really about.
Both the left and the right agree that the middle class is endangered, but they differ on the solution. The left wants more government intervention, the right wants less. But it is not just a question of jobs, but of what jobs. Small business against lifetime employment. The free market against the nanny state. Manufacturing against the humanities. The rural against the urban. Underlying the political argument is the cultural argument. Will America follow Europe or stick with its roots.
Obama's victory lit the fuse of the taxpayer's civil war. The Republicans had failed to present a meaningful alternative, and when the party crumbled, a grass roots movement gained force. Its adherents understand that their economic survival depends on cutting back government. On taking away its power to constantly raise and spend money, and its drive to regulate everything. Once they had pushed past the elites of the media and the political kingmakers to be heard, the pro-government forces pushed out their armies of the redistributive electorates, the people who had been cashing their checks for years and could be counted on to challenge one revolution with a counter-revolution of their own.
At stake is the simple question of freedom. Political freedom originates inextricably from economic freedom. There is no political independence without economic independence. A government that begins to tightly restrict economic freedoms will eventually also restrict political freedoms. The redistribute electorates are the greencoats of big government. They are the beneficiaries of the destructive economic policies and their final line of defense. If they go on as they are, then they will bankrupt the system. Like Rome's Praetorian Guard, they will appoint new emperors who will do what they say regardless of the consequences.
No fundamental change is possible without confronting and defeating them. The taxpayer has lost battle after battle to them. We lost California. We can't afford to lose Wisconsin.