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Posted at 6:47 AM ET, 03/ 2/2011

Wonkbook: Whatever happened to uncertainty?

By Ezra Klein

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With the House passing a two-week funding extension and Harry Reid promising the Senate will do likewise, it looks like we have at least until March 18th before any federal agencies have to shut their doors. But then there's a shutdown risk. And there's another one coming as early as April 15th, when the Treasury bumps into the the debt ceiling and needs Congress to lift it in order to avoid default. Federal budget policy over the next few months is going to be like a weekend with Charlie Sheen: A constant effort to avoid blackouts (yes, Wonkbook went there).

Prior to winning the election in November, the GOP spoke often about the pressing need to reduce "uncertainty" in the economy. This was a core principle of their plan to restore economic confidence and create jobs. As Rep. Paul Ryan put it to me in July, "uncertainty is a new economic buzzword, but for good reason: If we can reduce it, we’ll unlock capital." If businesses and individuals could be confident about what government was doing, what taxes would look like, and what regulators would ask of them, they could start investing again.

So are they succeeding at their own promise of reducing uncertainty? It's hard to see how. Budget experts on both sides of the aisle have sharply upgraded their estimate of how likely a government shutdown is in the next few months, either over the continuing resolution for 2011 or the debt limit or both. There's an ongoing effort to starve health-care reform of implementation funds and a promise to "replace" it with some policy that hasn't yet been written -- no one in the health space would say that the shape of health-care policy over the coming years looks more certain now than it did six months ago. The GOP chose a tax deal that lowered all rates for two years rather than a tax deal that lowered most rates permanently, so there's uncertainty over future tax rates. The tax and health-care policies would both do much more to increase the deficit than anything else on the list would do to reduce it, ensuring that concern continues to loom. So for what definition of "uncertainty" has the GOP succeeded in reducing its prevalence in the economy?

In each case, of course, the GOP has a good argument for the choice it's made: Lower tax rates on large estates and income over $250,000 were judged more important than tax certainty or deficit reduction. The health-reform law is so unwise that repealing it should be a top priority. The prospect of a government shutdown and/or default provides leverage to extract spending cuts, which are more important right now than assuring the market that there won't be some sort of shutdown or default. It's all fair enough, at least on its own terms. But it's meant that the post-election GOP takes the risk of uncertainty a lot less seriously than the pre-election GOP did. It's a tension I'd like to hear more of them comment on.

Top Stories

The House has voted for a two-week budget extension, report Karen Tumulty and Ed O'Keefe: "House and Senate leaders on Tuesday bought themselves a little more time in their efforts to avoid a government shutdown, agreeing to a two-week funding extension that also includes $4 billion in spending cuts. The deal, which eliminates dozens of earmarks and a handful of little-known programs that President Obama has identified as unnecessary, sailed through the House on a 335 to 91 vote. Senate Majority Leader Harry M. Reid (D-Nev.), who initially resisted including any cuts in a short-term funding extension, predicted that it will pass that chamber as early as Wednesday...If the Senate approves the measure, the two parties will have until March 18 before the government runs out of money."

The US could reach its debt limit next month, reports Damian Paletta: "As the debate over a bill to continue funding the federal government draws most of the attention on Capitol Hill, the U.S. federal debt continues to near the ceiling allowed by current law. As of Monday, the U.S. had $14.14 trillion in debt subject to the $14.294 trillion debt ceiling, according to the government’s Bureau of Public Debt. This is up from $14.0 trillion Jan. 28. The Treasury Department has said the government could hit the ceiling as soon as early April, and it has urged Congress to raise the ceiling so the U.S. doesn’t default on its obligations...The Treasury Department announced at 4:30 that it now estimates that the United States will reach the debt limit between April 15, 2011 and May 31, 2011."

Democrats and Republicans are offering up rival economic projections, reports Perry Bacon: "The budget debate in Washington isn't just President Obama's vision against that of House Speaker John A. Boehner (R-Ohio), but Mark Zandi versus John B. Taylor. Bring on the economists. Even as Republicans and Democrats seem likely to reach a temporary budget deal to keep the government from shutting down this week, both sides are preparing for a long debate over how much to cut government spending in this and next year's budgets. And like the debates over the stimulus and the health-care law, the two parties are trying to win the public relations battle by invoking the research of their favorite economists... Zandi's view that the stimulus helped the overall economy is broadly supported by economists, many of whom also believe the GOP proposal would cut spending too drastically."

A guide to the debate between Zandi and Taylor: http://wapo.st/hwL6Pe

Tim Geithner warned Congress against sharply cutting support for housing, report Zachary Goldfarb and Dina ElBoghdady: "Treasury Secretary Timothy F. Geithner used his strongest language yet to warn on Tuesday about the dangers of a mortgage system that does not include a significant role for the government. Two weeks after releasing a white paper on how to overhaul the badly battered housing market, Geithner said scaling back the federal role too far could make housing more costly, keep taxpayers on the hook for losses and handcuff policymakers...The nation's housing finance system now relies almost exclusively on federal support for funding new home loans - through the taxpayer-backed housing finance giants Fannie Mae and Freddie Mac and the Federal Housing Administration."

Girl group cover interlude: Dum Dum Girls play "Be My Baby" by the Ronettes.

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Still to come: The Chamber of Commerce wants to prevent new consumer financial protection rules; states are cutting health support for low-income adults; Ohio is facing a Wisconsin-style union fight; the EPA is easing up on greenhouse gas rules; and a little girl fails adorably at ballet.

Economy

The US Chamber of Commerce wants to block Consumer Financial Protection Bureau rules until it has a director, reports Brady Dennis: "Republican lawmakers and financial industry lobbyists lost their fight last year to halt the creation of the Consumer Financial Protection Bureau. But as the new watchdog takes shape, those critics have continued to question the bureau's precise role in the regulatory universe. The latest effort to limit the reach of the consumer bureau came Tuesday. The U.S. Chamber of Commerce sent a letter urging Treasury Secretary Timothy F. Geithner not to allow the bureau to issue new regulations if it does not have a permanent director in place by July 21, the date the bureau will officially open its doors...As anyone familiar with the bureau's short history knows, getting a Senate-confirmed director in place might take an awfully long time."

Regulators want to encourage a 20 percent down payments on some homes report Victoria McGrana and Nick Timiraos: "The Dodd-Frank financial overhaul law enacted last year enabled regulators to define a so-called gold-standard residential mortgage that would be exempt from costly new rules. At least three agencies—the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency—back a proposal to require home buyers to put down at least 20% of the sales price in order to obtain one of these 'qualified residential mortgages.' One proposal would also require borrowers to maintain a 75% loan-to-value ratio for refinances, and a 70% loan-to-value for cash-out refinances in which the borrower refinances into a larger loan, according to people familiar with the matter."

Ben Bernanke told Congress the Fed could respond to rising oil prices, reports Neil Irwin: "The Federal Reserve will "respond as necessary" if rising prices for oil and other commodities seem to be triggering more broad-based inflation, Chairman Ben S. Bernanke said Tuesday, for the first time raising the possibility that soaring fuel prices could provoke a response from the central bank. In his twice-a-year testimony on monetary policy before the Senate Banking Committee, Bernanke addressed the steep hike in the price of oil - including a surge last week amid turmoil in Libya - and the costs of other globally traded items in recent months. He said he does not expect a major impact on consumer prices in the United States but also made clear that if oil prices continue to rise and cause fears of permanent high inflation, the Fed could act."

Members of both parties are embracing the GAO's study on government waste: http://wapo.st/f9R8Jr

The GOP wants to cut the IRS despite its high returns, reports Stephen Ohlemacher: "Every dollar the Internal Revenue Service spends for audits, liens and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency's budget. House Republicans, seeing the heavy hand of a too-big government, beg to differ. They've already voted to cut the IRS budget by $600 million this year and want bigger cuts in 2012. The IRS has dramatically increased its pursuit of tax cheats in the past decade: Audits are up, property liens are up and asset seizures are way up. President Barack Obama and Democrats in Congress see stepped up enforcement as a good way to narrow the nation's staggering budget deficit without raising tax rates or cutting popular spending programs."

The San Francisco Fed has a new president: http://on.wsj.com/hZ3nHz

Public workers don't get paid too much, but paid too late, writes David Leonhardt: "The solution today is not to cut both the pay and the benefits of public workers, as would happen if workers in Wisconsin, Ohio and elsewhere lost their right to bargain. Remember, public workers don’t get especially generous salaries. The solution is to get rid of the deferred benefits that make no sense -- the wasteful health plans, the pensions that start at age 55 and still let retirees draw a full salary elsewhere, the definitions of disability that treat herniated discs as incurable. These changes will help the states’ long-run budget problems, but of course they won’t address the immediate, recession-induced crisis. Dealing with the crisis will require dealing with the second failure of government: subpar performance."

Dean Baker's released a report that's an excellent primer on state pensions, writes Ezra Klein: In the final part of his paper, Baker warns that the dire talk of trillions in unfunded liabilities mainly confuses people. 'The relevant context is the size of the projected shortfalls relative to the size of the state economies,' he writes. Using data from the National Association of State Pension Fund Administrators -- which show a shortfall of about $650 billion over the next 30 years -- he calculates that the states are looking at funding gaps that range from 0.2 percent of their economies to 0.5 percent. Not nothing, but not an unmanageable crisis. The only way it becomes an unmanageable crisis is if the economy never recovers and thus the rates of return end up lower than we would expect and state economies end up smaller than we expect. But in that case, state pensions will be the least of our problems.

Supercut interlude: Movies featuring Sam Rockwell dancing.

Health Care

States are ending low-income health plans, reports Kevin Sack: "Pennsylvania is one of several destitute states seeking to help balance budgets by removing adults from government health insurance programs. Gov. Christine Gregoire of Washington, a Democrat, recently removed 17,500 adults covered under Basic Health, a state-financed plan for the working poor. In Arizona, Gov. Jan Brewer, a Republican, proposes to remove up to 250,000 childless adults who have been insured by her state’s Medicaid program under a decade-long agreement with the federal government...Most states do not now offer coverage to childless adults, but starting in 2014, the new federal health care law will require them to expand Medicaid to insure adults earning up to 133 percent of the poverty level."

The White House Office of Health Reform is being folded into the Domestic Policy Council: http://bit.ly/hlVudL

Republican governors complained to Congress about health care reform's Medicaid requirements, reports N.C. Aizenman: "A day after President Obama said he would support amending the health-care law so states can opt out of key provisions sooner, Republicans sought to shift the rhetorical battle back to an issue that would be largely unaffected by the president's proposal: the impact of the law's Medicaid requirements on state budgets. Testifying at a hearing of the House Energy and Commerce Committee on Tuesday, two Republican governors returned to themes that had dominated the discussion at the National Governors Association's semiannual meeting over the weekend. Mississippi Gov. Haley Barbour and Utah Gov. Gary R. Herbert complained that by prohibiting states from limiting who is eligible for Medicaid, the law has locked them into unsustainable spending at a time of fiscal crisis."

GOP lawmakers know they can't achieve the same thing as health care reform with less money, writes Jonathan Cohn: http://bit.ly/hCdsvh

Domestic Policy

Ohio is seeing Wisconsin-like protests, report Amy Goldstein and Michael Fletcher: "Thousands of union supporters descended on the Ohio Statehouse on Tuesday to protest a proposal that would dramatically curtail bargaining powers of government workers, as the state becomes the latest flash point in the fight over union rights. Like their counterparts in Wisconsin, protesters here accused lawmakers and Gov. John Kasich (R) of trying to use a budget crisis to destroy public-sector unions. Government workers did not cause the crisis and should not bear the brunt of it, protesters said. But unlike in the standoff in Wisconsin, Democrats don't have the numbers to walk out and delay a vote. Supporters said that a measure, which would go further than the one in Wisconsin by also affecting police officers and firefighters, could emerge from the state Senate on Wednesday."

One of Obama's latest tax cuts could cut state revenues by billions: http://nyti.ms/f3k3Gw

Scott Walker has proposed a new budget cutting school and local funding by billions, report Monica Davey and Richard Oppel: "Gov. Scott Walker, whose push to limit collective bargaining rights and increase health and pension costs for public workers has set off a national debate, proposed a new budget for Wisconsin on Tuesday that called for deep cuts to state aid to schools and local governments, provoking a new wave of fury. Mr. Walker, a Republican, called for no tax or fee increases, but cuts of $1.5 billion to items like the schools and local governments...Mr. Walker presented his fiscal plan under extraordinarily tense circumstances: the sound of hundreds of protesters screaming 'Recall! Recall!' and pounding drums outside the Capitol could be heard clearly inside the Assembly chamber."

The Supreme Court ruled corporations lack a right to personal privacy: http://wapo.st/hYq0SZ

Adorable children failing at performance art interlude: A little girl tries and fails to master ballet's first position.

Energy

The EPA is easing up greenhouse gas rules, report Ryan Tracy and Stephen Power: "Businesses that generate greenhouse gases will have more time to report their emissions after the Environmental Protection Agency extended a key deadline Tuesday. The EPA said it would change the deadline, which was originally March 31, explaining that the agency would take more time to test the online system that will be used to collect data. The agency said it expected reporting to begin in late summer, but didn't immediately set a new deadline. The move was a nod to business groups that had said the deadline was too soon. It came as the EPA weathered attacks from House Republicans on its efforts to regulate greenhouse gases."

House Republicans rejected an attempt to kill tax subsidies to oil companies: http://bit.ly/exwQe9

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams. Photo credit: GOP Leader.

By Ezra Klein  | March 2, 2011; 6:47 AM ET
Categories:  Wonkbook  
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Next: Getting used to high unemployment

Comments

great article by Leonhardt as it shows WHY Walker has done what he's done. He's not worried as much about future growth of salaries so he's professed to allow that to continue to be bargained but the other issues that as Leonhardt points out harm the future fiscal problems of his state and others, the healthcare benefits and pensions.


Also missing is the fact that Bernake is stating in testimony that the talk of 700,000 job losses are overstated.

http://firstread.msnbc.msn.com/_news/2011/03/01/6162807-bernanke-house-gop-spending-cuts-wouldnt-cost-700000-jobs-?pc=25&sp=75


and this from the NYT showing that in some situations its not about collective bargaining rights at all. Ohio's amendments are now allowing collective bargaining for everything but not allowing strikes for public sector workers and the Democrats are still balking at it.

http://www.nytimes.com/2011/03/02/us/02states.html?scp=3&sq=ohio%20unions&st=Search

Its going to look really bad for them if all this talk of "we just want our rights not infringed upon" turns out to be a lot of hot air. They'll lose the public sentiment they've garnered pretty fast.

Posted by: visionbrkr | March 2, 2011 7:59 AM | Report abuse

These are the only consistent GOP stances:

- reduce taxes

- dismantle gvmt whenever possible and to whatever extent possible

- increase corporate profits whenever possible and however possible

- extend American capitalist dominance across the world

Notice I did not mention such things as increase jobs, or improve the economy, or ensure all Americans are fairly and equally treated or receive health care, or support democratic movements against dictators.

Everything else is cannon fodder to them, and that includes abortion, gays, guns, liberty, etc, because these are simply wedge issues the elite use to control their vassals/base.

Posted by: lauren2010 | March 2, 2011 8:01 AM | Report abuse

House GOP Votes to approve Corp Welfare Subsidies for five Big Oil Corporations! And, Votes down legislation to Recoup 53 Billion of taxpayers' funds! These Big Oil Corporations pay little to no taxes at all, so please tell me, somebody, why are we subsidising them at all, yet defunding Medicare, Medicaid, educational and WIC benefits from everyday Americans, while steadfastly refusing to fund infrastructure projects which will create jobs, jobs, jobs? Oh! -- That's right, GOP policy of giving tax breaks to the rich creates jobs! So where are they?

And, why isn't this News, yet the breakdown of Charlie Sheen is?

http://thinkprogress.org/2011/03/01/house-gop-oil-subsidies/

Posted by: wdsoulplane | March 2, 2011 8:02 AM | Report abuse

wdsoulplane

Why take money from the oil companies (money we give them in the first place) when you can find ripe union people to take it from?

Just a day or so ago Walker proposed cutting 22000 jobs, which in one day is 3% of the 700,000 projected jobs to be lost due to GOP policies.

Posted by: lauren2010 | March 2, 2011 8:08 AM | Report abuse

When will you quit pretending that John Taylor's 'flat-Earth' economy model is anything other than a chance to get journalists to cite that opinions on the Earth's shape differ?

The model is wrong, wrong, wrong. And allowing into print without calling Taylor a hack, politically inspired, useful tool, is also wrong.

Posted by: grooft | March 2, 2011 8:18 AM | Report abuse

"Its going to look really bad for them if all this talk of "we just want our rights not infringed upon" turns out to be a lot of hot air. They'll lose the public sentiment they've garnered pretty fast."

It doesn't take a lot of effort to realize their rights are indeed being trampled on.

Walker wants unions to re-vote every year, a calculated political move to weaken unions, which it will certainly do.

How about we force Walker to get reelected every year?

The unions are only 7% of the national workforce and their ranks have dwindled by 100,000s in recent years and they have accepted significant pay and benefit cuts, and the data suggests they are not overpaid according to their education levels and neither is labor costs the cause for the recession or budget deficits. The Wisconsin members have largely agreed on Walker's pay and benefit cuts.

Karl Rove's article below is filled with distortions and outright lies, but even he is honest enough to admit that one of Walker's goals is to limit collective bargaining. See link below.

http://www.rove.com/articles/296

"A union defeat in Wisconsin could hurt the president's re-election bid."

"Hence his [Walker's] proposals to limit collective-bargaining rights for benefits and to require public approval of pay raises greater than inflation."

Posted by: lauren2010 | March 2, 2011 8:42 AM | Report abuse

It doesn't take a lot of effort to realize their rights are indeed being trampled on.

in Wisconsin yes but in Ohio and other states, NO, not now and Dems and unions are seemingly feeling emboldened by the recent polls showing favoritism towards unions. I wonder if they felt they had Walker on the run would they take back the concessions they've made???

As far as voting every year for elected officals would that go for all elected officals or only ones you don't like??


Personally I don't pay attention to hacks like Rove. He's in a class with Beck and Palin in my book.

Posted by: visionbrkr | March 2, 2011 9:00 AM | Report abuse

Rove isn't just a commentator. He actually influences Republicans and their decisions. He and others such as Kristol define modern conservative lines of thought and strategy. Rove was in the White House and made all sorts of nasty decisions that became policy. Kristol is the one that convinced McCain to select Palin as VP candidate and I would not doubt the union busting efforts were at least in part conceived by Rove; the fact he cheerleads on the issue gives spirit and direction to the GOP participants.

So when someone like Rove admits to political purposes behind recent efforts to weaken unions, it's pretty reasonable to take his word for it.

And the reason other states are backing off is because of blowback due to their overreaching.

I would gladly weaken gvmt union rights myself if we also weakened the much more SINISTER and GRAVE influence that big business has on all levels of gvmt. I didn't say eliminate big business influence, but it needs to be balanced.

The BIGGER problem TODAY is NOT union abuses (though they exist and should be mitigated) but big business abuses. I think our wars, our debt and the recession, and polarization, is tied to gvmt corruption due almost entirely to undue corporate influence in gvmt.

Posted by: lauren2010 | March 2, 2011 9:28 AM | Report abuse

"It doesn't take a lot of effort to realize their rights are indeed being trampled on."

I believe the word you are looking for is "privileges", not "rights".

Posted by: justin84 | March 2, 2011 9:54 AM | Report abuse

justin

Do you consider owning a gun a right or a privilege?

The freedom to assemble is a right in our Constitution and is a human right as specified in global charters that we signed. We often ask dictators to allow their citizens to have the basic right to assemble.

Gun advocates claim it is a right to own assault weapons. And one GOP leader claims gvmt unions are in effect holding machine guns to their heads. And since both assembly and gun ownership are rights in our constitution, it makes little sense to claim they are merely privileges, especially given that basic human instinct compels us to assemble.

Posted by: lauren2010 | March 2, 2011 10:37 AM | Report abuse

There's a lot of foolish people who don't link their individual rights at work to unions. As I have often stated, we know very little of our own history, and a lot of it is the "city on a hill" crap.

Few connect their lives today with the battles that unions have been fighting over a hundred years. With the diminshment of unions, those who labor will return to the serfdom they came from, not today, but over the next 20 years.

The GOP is like a long term insurgency. They are almost Chinese in their thinking of the long war. Just like there are people in the GOP who wake up every day and wonder what can I do today to restrict abortion more, there are also those who wake up thinking what can I do today to undermmine labor. It's their life work.

My children are moving from the working class where I was born, to the owning class. That's where they HAVE to be to prosper in the coming years. However I am uneasy with the knowledge that my grandchildren will someday look down up the class of people who enabled their advancement in the world.

Posted by: johnmarshall5446 | March 2, 2011 10:44 AM | Report abuse

"Ohio's amendments are now allowing collective bargaining for everything but not allowing strikes for public sector workers and the Democrats are still balking at it."

Declaring it illegal for workers to strike after a collective bargaining agreement expires when there is no new agreement in place effectively destroys collective bargaining. It takes all of the pressure off of the employer and removes all of the leverage on the workers' side of the table.

It is not "hot air" to say that laws requiring organized labor to continue to report to work with no collective bargaining agreement in place is an obvious assault on the right of organized labor to bargain.

Posted by: Patrick_M | March 2, 2011 10:57 AM | Report abuse

johnmarshall5446,

Great comment!

Posted by: Patrick_M | March 2, 2011 11:01 AM | Report abuse

@Patrick,

so for public sector unions why would they need to strike if they're allowed to collectively bargain on all things? Is it the horrible working conditons? The unfair labor practices set forth by the government or schools? What are their reasons for striking other than holding more power in the bargaining?

Posted by: visionbrkr | March 2, 2011 11:03 AM | Report abuse

"Do you consider owning a gun a right or a privilege?"

It's a property right.

"it makes little sense to claim they are merely privileges, especially given that basic human instinct compels us to assemble."

I'm not opposing the right to freely associate.

The government is granting public employee unions the privilege of forcefully extracting property from other people. Technically, this is done with or without unions, but public sector unions exacerbate the problem.

Private sector unions are okay, provided workers aren't compelled by government to join them, and provided employers aren't compelled by government to accept them. I might personally believe that the union would tend towards inefficiency, but it's not my business if a firm voluntarily accepts a unionized staff.

Given that, I'm far more comfortable with private sector union workers than non-unionized public workers.

Posted by: justin84 | March 2, 2011 11:12 AM | Report abuse

visionbrkr,

Think about it. They have zero power in the bargaining is they must work without an agreement in place. The employer holds all of the cards.

The employer bargains to obtain their labor. If the employer still receives their labor when no agreement is reached, the employer has no incentive to do anything other than hold out.

Imagine if you had an individual private employment contract with an employer. Imagine if a law was passed compelling you to work indefinitely for that employer even after your contract expired. Would that be fair? Would that not infringe upon your rights to bargain freely?

Posted by: Patrick_M | March 2, 2011 11:13 AM | Report abuse

For the record, I think reasonable arguments can be made that public safety workers (police, fire, prison staff) should not be able to strike, but in those case, the right to strike should be (and generally is) replaced with the right to refer bargaining impasses to a neutral arbitrator, so that both sides have an incentive to come to the most reasonable final offer in the bargaining process.

It is important to bear in mind that workers (and their families) suffer during a strike as well; the prospect of a strike keeps pressure on BOTH sides to come to a reasonable agreement on time.

It is just upside down thinking to say that declaring strikes illegal does not impact collective bargaining.

Posted by: Patrick_M | March 2, 2011 11:25 AM | Report abuse

@patrick,

my issue is that as a small employer i can be fired for no reason at all. Clients can choose to work with anyone they choose so i can do everything right and still be fired. Maybe that's where my idealogy comes from.


They don't have zero power as the teachers in Wisconsin for 3 days proved. They can walk out and get doctor's to write notes for them explaining their abscence.

Are they compelled to work forever for the goverment? For schools? I don't think so. They can resign. They can come work in the private sector if they like. Their "plight" in negotiations is not nearly as bad as some make it out to be. I do agree that we need private sector unions to keep big business in check but don't see the government and schools as hampering their rights as business does and business is the natural adversary to private sector unions so their bargaining is more fair while many times politicians or those negotationing with unions are too "in bed" with them to have a true adversarial relationship that is needed for "fair negotiations".

Do we see people leaving say teaching in public schools so that they can teach at private or catholic schools? No.


As far as requiring someone to work without a contract why not put in place required arbitration after a set period of time so that a strike isn't necessary. The ones affected by a strike are the students and or the public who don't receive their services.

Posted by: visionbrkr | March 2, 2011 11:28 AM | Report abuse

"Are they compelled to work forever for the goverment? For schools? I don't think so. They can resign."

Visionbrkr,

Effectively that is exactly what happens when a strike occurs after the contract expires with no new agreement in place. The unionized workforce "resigns" unless and until an acceptable new offer is made. That's what a strike is, and that is precisely the right that you argue should be outlawed.

If you take away the right of the bargaining unit to effectively "resign" when there is no new contract in place, you have taken away the right to collectively bargain in any meaningful sense, by taking away the basic rights of the employees to withhold their labor when there is no contract in place.

As I already said, there are circumstances where binding arbitration is a reasonable alternative, but (in a free society) having a third party impose a solution is not preferable to having the parties come to an agreement on their own, and only makes sense when there is a particularly compelling reason, like public safety.

Posted by: Patrick_M | March 2, 2011 11:39 AM | Report abuse

vision:

This isn't just about the public sector. This is just the easiest current target. Tomorrow it will be the private unions, especially if the GOP gains control of the Senate in 2012.

The advantage the GOP has over the Dems is their relatively small agenda and homogenous constituency. It enables them to stay "on message" much better. Consider that the Democratic party embraces both unions and some financial high rollers. The GOP does not have that problem.

Posted by: johnmarshall5446 | March 2, 2011 11:41 AM | Report abuse

"They don't have zero power as the teachers in Wisconsin for 3 days proved. They can walk out and get doctor's to write notes for them explaining their abscence."

Members of one union in one city using up their own sick leave benefit for three days was a symbolic expression of solidarity in a political struggle, not an exercise of power in the bargaining process. Using sick leave or vacation benefits is not negotiating leverage when there is no collective bargaining agreement in place.

Declaring strikes illegal effectively allows the employer to be in a "take it or leave it" posture, which is the antithesis of bargaining.

Posted by: Patrick_M | March 2, 2011 11:49 AM | Report abuse

@Patrick,

is that really the case? For example many teacher friends of mine have been working under an expired contract for several years. They work under the rules of the most recent one (even if its to the detriment of the town that they work in). I don't see teachers being laid off because of no contract. I don't see teachers being laid off because they're ineffective. I see them being laid off because there's no money.


"If you take away the right of the bargaining unit to effectively "resign" when there is no new contract in place, you have taken away the right to collectively bargain in any meaningful sense, by taking away the basic rights of the employees to withhold their labor when there is no contract in place."


Are school districts forcing teachers to work that want to resign and come work in the private sector? I don't think so. Rights you consider basic are foreign to the private sector.

@johnmarshall,

as i've said I'm fine with everything on the table for private sector unions as it should be. They're truly adversarial in their relationship. The fact that some don't see the perversion of interests in public sector unions is astonishing to me. Its like the perversion of letting the oil and gas industry work at the MMA. Its like letting the Wall St bankers work at the SEC.


As far as the "financial high rollers" favoring one party over the other I believe they favor whoever's in power and donations to parties I think have shown that.

Posted by: visionbrkr | March 2, 2011 11:53 AM | Report abuse

"For example many teacher friends of mine have been working under an expired contract for several years."

Why? Are teacher strikes are illegal in your state? If so, the fact that years have passed with no new agreement simply proves the point that collective bargaining does NOT produce an agreement when the pressure is removed to reach a fair compromise. If not, the fact that the union has chosen to stay at work under the terms of the old agreement does not advance your argument, it just indicates that strikes don't necessarily occur when an agreement expires (in fact it is common practice for unions to keep working for some time after the expiration before calling a strike as a show of good faith).

"Are school districts forcing teachers to work that want to resign and come work in the private sector? I don't think so. Rights you consider basic are foreign to the private sector."

No, not at all. The rights of a bargaining unit (public or private) mirror the rights of a non-unionized private employee.

If you have an valued employee that you pay $17.50 an hour, and that employee informs you that they need to be paid $19.00 per hour to stay in your company. what happens? You either come to an agreement or the employee departs. You value the employee and you have an incentive to reach an agreement, the employee values their job and has an incentive to strike an acceptable bargain rather than lose his or her job.

There seems to be a blind spot in conservative thinking, which ordinarily is all about freedom, when it comes to a group of people banding together into a bargaining unit.

Again, I am not trying to argue the merits of the proposed laws in any particular state, I am simply trying to say that your statement it is "hot air" that there is any relationship at all between declaring strikes illegal and collective bargaining rights is just plain wrong.

Can you really not appreciate the fact that making strikes illegal (i.e. that striking employees and union officials are subject to fines and even imprisonment) fundamentally alters the bargaining landscape?

Posted by: Patrick_M | March 2, 2011 12:14 PM | Report abuse

Patrick,

I don't know if teachers strikes in NJ are illegal but I don't think so and i can't recall one happening any time recently. That being said they don't happen because usually as NJ is a very blue state it seems to favor teachers as compared to other states.

I guess I should have prefaced the idea that it was "hot air" in some states and not others. As you correctly note the rules/laws are different in every state and what's "hot air" in one state may be common practice in another.

Sure it alters the bargaining landscape but the question is why is that wrong? Should we allow them to go further than strikes although I can't fathom what that could be. Maybe a requirement that if you're working under a contract that's expired the employer (see government entitiy) is required to "X" percentage annual raises until they come to an agreement.


Again my views admittedly are somewhat slanted as I'm a conservative in a very blue state of NJ. Part of the problem that the NYT article from Matt Bai that profiled Governor Christie showed very well is that many of our problems revolve around the structural deficits we face now annually. Governor Difrancesco back in 2000 for some reason assumed that pensions would grow annually at 8+% interest no matter how the actual stock market did. Now that its grown at a much smaller pace its made our pension problem even worse not to mention the healthcare issues we face and the fact that we have 600+ school boards that negotiate with their teachers. That loss of leverage by negotiation at a local scale costs us hundreds of millions of dollars annually. Sadly we're the poster child for now NOT to do it and the fact that we're the highest taxed state in the nation goes to show as was mentioned in the article that "you can't tax your way to where we need to go to".

now is that the case in every state, no. But in mine, it is.

Posted by: visionbrkr | March 2, 2011 12:31 PM | Report abuse

"It's a property right."

What I see from you in that is an inconsistent reading of two different rights in the constitution.

You arbitrarily read the gun rights as rights and the assembly rights as priviliges.

And your use of the word "forcing" suggests you engage in hyperbole for ideological sake.

I could just as easily say any employee who threatens to quit his job unless he gets payraise is also forcing his employer to act. Well, duh!

If the gvmt is "forced" to provide better pay or benefits, it's because there is political pressure to do so, and that usually means the PEOPLE want to force the gvmt into such actions.

An oft stated purpose for gun rights is to keep gvmt in check and to be able to overthrow it if it doesn't. Yet, when ordinary people negotiate for more pay or bennies, you use the word force.

Posted by: lauren2010 | March 2, 2011 12:37 PM | Report abuse

also to prove that collective bargaining doesn't work you need to see how many contracts are not renewed. If its a small percentage you can also make the argument that there are other reasons.

Also lately (the last 4-5 years) teachers contracts that are revised usually need revising due to the fact that costs are increasing (pension and healthcare) at such an exorbidant rate (at least in my state) so that negotiations reduce benefits and not increase them so when they're held in place its usually to the benefit of the teacher and not in the benefit of his or her district's cost structure.

Posted by: visionbrkr | March 2, 2011 12:39 PM | Report abuse

Not sure why Justin can't agree to something that is clearly a right in the Constitution.... It doesn't use the word "privilege" but instead "right"

First Amendment

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Posted by: lauren2010 | March 2, 2011 12:47 PM | Report abuse

"Sure it alters the bargaining landscape but the question is why is that wrong?"

Rather than go in circles I will leave it there. My argument was not about whether any particular law is "wrong" but was instead about your initial insistence that it was "hot air" to say that outlawing strikes is directly connected to collective bargaining rights. I am glad to see that you know acknowledge the connection.

In order to look at whether outlawing strikes by public employees is "wrong," we need to look at the actual details of an actual law. You don't know if teachers strikes are legally permitted to strike in New Jersey, or if there is a right to arbitrate impasses in the proposed law in Ohio.

As I have already said, as a general proposition I can support the notion of outlawing strikes where there is a compelling public safety issue, provided there is an arbitration mechanism that will resolve a bargaining impasse. And as a general proposition (as a freedom loving American) I do not support laws telling workers whose contract has expired that if they walk out, they can be fined or jailed. But in order to assess any particular piece of legislation, we need to know what it actually says.

Posted by: Patrick_M | March 2, 2011 12:47 PM | Report abuse

Not sure why Justin can't agree to something that is clearly a right in the Constitution.... It doesn't use the word "privilege" but instead "right"

First, go back and carefully re-read my comment.

I certainly agree with the right to freely associate - or not associate - with others, to peacefully assemble, to petition for redress of greviances, etc.

Declaring something to be a right does not make it so. Note that when I say "right", I mean it in the natural, inalienable sense used by Locke and the founders. Rights do not come from the constitution.

If the constitution granted people the "right" to murder another person if they needed an organ or two, clearly we would all agree that such a right doesn't really exist. It is a privilege - a law for one. It benefits one person at the expense of another. People have a right to life, specifically the right not to be murdered. Conversely, there is no right for government workers to the property of other people - the right to property protects individuals from theft by others, rather than provide certain individuals with a right to the property of others.

Posted by: justin84 | March 2, 2011 1:18 PM | Report abuse

"You arbitrarily read the gun rights as rights and the assembly rights as priviliges."

I don't rely on the constitution to define what is or is not a right.

Furthermore, I never said people can't or shouldn't peacefully assemble. My contention is that they should not steal, nor organize together to increase the fruits of their theft.

"And your use of the word "forcing" suggests you engage in hyperbole for ideological sake."

What happens if I don't pay taxes? Please follow that line of thought to the logical conclusion, and try to convince me that force is not involved.

"I could just as easily say any employee who threatens to quit his job unless he gets payraise is also forcing his employer to act. Well, duh!"

No one is killed or put in jail over it, Lauren. It's a bit of a difference.

"If the gvmt is "forced" to provide better pay or benefits, it's because there is political pressure to do so, and that usually means the PEOPLE want to force the gvmt into such actions."

The government has no money of its own.

Some people are pressuring the government to force property out of other people. The government will succeed because it can kill or imprison those who won't comply. That is what is occurring, nothing more, nothing less.

Posted by: justin84 | March 2, 2011 1:47 PM | Report abuse

OK, Ezra, enough already with the Charlie Sheen references. (Good though, & funny!)

Posted by: jifster | March 2, 2011 2:13 PM | Report abuse

"No one is killed or put in jail over it, Lauren. It's a bit of a difference."

Collective bargaining doe not cause any of that.

The gvmt DOES have money of its own. It sells debt, it taxes, and it prints money to meet its obligations. Of course, that power can be, and has been, abused.

"I don't rely on the constitution to define what is or is not a right.:

Neither do our Supreme Court Justices apparently, and that is a problem among conservatives in general.

Someone else and me were talking about rights being trampled; we were taking about collective bargaining; you said it was a privilege and not a right; I equated collective bargaining to the right to assemble as protected under the constitution; I dont know where you think it is just a privilige and not a right; what person who truly cherishes freedom and democracy thinks the gvmt has a right to do away with collective bargaining when the Constitution reserves that right for people?

When the gvmt can be used to weaken people and Democracy, conservatives want to strengthen gvmt. When it is used to regulate commerce and weaken consumer protections, you want to destroy gvmt. You people have more loyalty to businesses than to your fellow Americans, and this union busting proves it. Conservatives do not believe in rights of the individual except where those rights might be leveraged to destroy or limit gvmt (thats why you love gun rights); but they do believe in authority over people. This philosophy is espoused very clearly and voluntarily by leaders of the modern conservative movement, by such people as Kristol and his modern day followers, people in the GOP today. This is one reason I am no longer a Republican.

Posted by: lauren2010 | March 2, 2011 3:31 PM | Report abuse

"Collective bargaining doe not cause any of that."

Not directly, but it amplifies the existing injustice. Suppose I refuse to pay my taxes to fund government employee salaries. What does the government do?

Collective bargaining in the public space amplifies coercieve taxation, hence my opposition.

Collective bargaining isn't really the problem. As Scott Sumner said, "How do I feel about public sector unions? Let me put it this way, I oppose public sector jobs."

It isn't the jobs part that bothers me either, it's the public sector part (in fact, it's not even that - it's more specifically coercive taxation that bothers me - public sector jobs financed by voluntary contributions to government are okay too, even unionized ones).

I'm not even upset with current public workers. Lots of people want to work in the education sector, for example, and the government dominates it so most people will have to work in public education. I get that. This isn't a personal attack on them - most probably have never considered the issues I raise here. It would make just as much sense for me to have been upset with the typical worker in the USSR circa 1975.

I believe many public workers do outstanding work. I recently even made the argument that some of them might be underpaid, we just can't really know because the buyer of labor is cut out of the transaction. However, I'd like the financing to be voluntary. That is all.

For example, I think NASA has had some amazing achievements: Voyager, Viking, Galileo, Cassini, Apollo - all of those programs were great. However, I understand that if another person doesn't place any value on NASA's activities, it would be wrong for me to force him/her to pay for them. As another example, I really like the work of the GMU economists, many of whom are libertarian to some degree. GMU is a public university - are you happy to be subsidizing the creation of more libertarian economists?

Posted by: justin84 | March 2, 2011 5:32 PM | Report abuse

"The gvmt DOES have money of its own. It sells debt, it taxes, and it prints money to meet its obligations. Of course, that power can be, and has been, abused."

Government money is nothing but resources taken from private individuals. Taxes are theft, bonds are sold on the promise of future theft, and money creation just another tax and thus also theft.

"Someone else and me were talking about rights being trampled; we were taking about collective bargaining; you said it was a privilege and not a right; I equated collective bargaining to the right to assemble as protected under the constitution"

Except that public sector collective bargaining violates property rights, and as such there is no such right. The right to own guns isn't the right to fire them at other people indiscriminately. The right to assemble isn't the right to assemble for the purpose of stealing other people's property.

"When the gvmt can be used to weaken people and Democracy, conservatives want to strengthen gvmt."

Republicans? Plausible for many of them. Can you honestly say that about me?

"You people have more loyalty to businesses than to your fellow Americans, and this union busting proves it."

Businesses don't take my money by force, and in fact they don't get a cent unless they must provide value as assessed by me. Contrast that with government, and I don't see why I shouldn't like businesses more.

"Conservatives do not believe in rights of the individual except where those rights might be leveraged to destroy or limit gvmt (thats why you love gun rights); but they do believe in authority over people. "

Maybe that's true for the typical Republican, but it isn't true in my case. I don't "love" gun rights (I don't even and never have owned a gun - haven't even fired one). I care more generally about PROPERTY rights.

I don't want any authority over other people at all, unless of course they work for me in some capacity. I oppose not only the War on Poverty, but the War on Drugs and the War on Terror as well.

I'm not into destroying government either. I largely buy the argument that governments are formed to protect very narrow and specific inalienable rights, and that governments should not attempt to do more on utilitarian grounds as they will inevitably violate the rights they exist to protect. The various interventions also tend to have various unintended consequences, as an aside.

"This is one reason I am no longer a Republican."

GOP authoritarianism is also a reason why I too am not a Republican.

Posted by: justin84 | March 2, 2011 5:58 PM | Report abuse

visionbrkr,

It appears that your view of the Ohio law as advanced today as leaving collective bargaining intact and outlawing strikes is far from correct.

The Ohio bill does ban strikes by public workers and establish penalties for those who do participate in walkouts.

Unionized workers could negotiate wages, hours and certain work conditions but no longer health care, sick time or pension benefits. The measure abolishes existing automatic pay raises and bases all future wage increases on merit.

The legislation would also set up a new process to settle worker disputes, giving elected officials the final say in contract disagreements. Binding neutral arbitration, which police officers and firefighters use to resolve contract disputes as an alternative to strikes, would be eliminated for all public employees.

"Hot air" my foot. Even such socialist rags as the Wall Street Journal describe the bill as creating "sweeping" curbs on existing rights for Ohio's public employees.

And did you see the process used to get the bill through committee today?

Posted by: Patrick_M | March 2, 2011 9:22 PM | Report abuse

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