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Wisconsin's Recall

Posted by MacZad
Jun 10 2012

In spite of my skepticism about many of the policies of the current ultra-conservative Republican party I believe that it's good that Wisconsin Governor Scott Walker won the recall vote despite the public-sector unions' best efforts to unseat him.

Both the left and the right have loony ideas, and the left's support of public sector unions is near the top in loonyness.

In the private sector union demands that are too strident can raise a company's costs, and hence its prices, to the point where sales fall and perhaps the company fails. For most private sector companies this marketplace pressure puts a lid on union demands - the unions don't want their demands to cause unionized companies to falter and fail.

In the public sector, however, marketplace pressure is lacking as governments seldom go out of existence. The unions' strategy has been to less strongly push for current pay increases, which would require immediate tax increases and thus are often resisted by governing entities. Instead they pursued the easier course of seeking ever-greater retirement benefits. Because the costs of these benefits are pushed into the future (no immediate tax increases) this course has allowed the governing entities to acquiesce to the demands and avoid union confrontations. This has resulted in: (1) public-sector retirement benefits that are far more generous than in the private sector, and (2) government pension obligations that cannot be discharged without massive tax increases. In Wisconsin, and elsewhere, the taxpayers are finally providing some "marketplace pressure" as they are taking action to curb the public-sector unions' power and assure that their taxes are not increased to pay for overly generous benefits.

While I'm positive on this recall outcome please note that I'm wary of many other policies that politicians of the Scott Walker ilk pursue - for example Paul Ryan's proposed budget and Florida governor Rick Scott's purge of voter rolls.

Categories: Seeking Better Governance