The Wisconsin Elephant

The big story for the next month is going to be the recall of Scott Walker. The Democratic primary is on Tuesday and they seem to be coalescing behind a semi-electable candidate. And then, in June, we’ll have the recall election. If you want to keep up, I highly recommend Ann Althouse (actually, I recommend her even if you could give two shits about the election). She’s front-and-center of the fight, objective and insightful.

For obvious reasons, I see this is a critical election. State employee benefits are the bomb hovering over the fiscal futures of many states. And it matters who is making the decisions. Steven Malanga explains why:

Indiana’s debt for unfunded retiree health-care benefits, for example, amounts to just $81 per person. Neighboring Illinois’s accumulated obligations for the same benefit average $3,399 per person.

Illinois is an object lesson in why firms are starting to pay more attention to the long-term fiscal prospects of communities. Early last year, the state imposed $7 billion in new taxes on residents and business, pledging to use the money to eliminate its deficit and pay down a backlog of unpaid bills (to Medicaid providers, state vendors and delayed tax refunds to businesses). But more than a year later, the state is in worse fiscal shape, with its total deficit expected to increase to $5 billion from $4.6 billion, according to an estimate by the Civic Federation of Chicago.

The reason is because Illinois employees get extremely generous healthcare benefits and pensions, funded entirely by the state. Even Rahm Emmanuel is beginning to notice businesses fleeing for Indiana and Wisconsin. Illinois is the disaster Walker wanted to avoid.

But there is a political price to pay for that. Or … maybe not. The funny thing is that the Democrats aren’t running on the issue that sparked the recall.

Since last summer, unions have been throwing millions at defeating the man who reformed collective bargaining for government workers and required union members to pay 5.8% of their paychecks toward pensions and 12.6% of their health insurance premiums, modest contributions compared to the average in private business. As the May 8 Democratic recall primary nears to determine who will run against Mr. Walker on June 5, this should be their rhetorical moment ne plus ultra.

So, let’s see. Milwaukee Mayor Tom Barrett, the front-runner, has focused his campaigns on jobs, education, the environment and “making communities safer.” One of Mr. Barrett’s ads singles out “Walker’s War on Women,” with nary a mention of collective bargaining. Former Dane County Executive Kathleen Falk is heavily supported by union groups, but even her issues list makes only passing reference to collective bargaining.

There’s a very good reason they aren’t running against Walker’s reforms: because they’re working. Wisconsin property taxes fell for the first time in two decades and their business environment is now ranked as top 20. The state has already saved a billion dollar, mostly by allowing governments to shop for health insurance rather than forcing them to buy it through the union. And, in fact, the changes saved union jobs, allowing costs to be cut without firing teachers. Thousands of union employees still have their jobs today — albeit with lesser benefits — thanks to Walker and the Republicans.

The Democratic refusal to run on this issue is an acknowledgement that Walker was right.

The unions can see how dangerous this is. The only way we are supposed to deal with these problems is by raising taxes. If Walker is re-elected, it will not only vindicate his reforms but show that politicians can take on the unions and still win re-election. And so they are pulling out the stops.

(Of course, this stop out-pulling is coming without the media terror that would ensue if this were a Right Wing recall. If Sarah Palin talked about “taking out” a governor, she’d be forced to apologize, unlike Richard Trumka. If outside money were pouring in, we’d hear about Koch Brothers and Citizens United. And I’m sure the unions will try to re-ignite the protests — only without the hand-wringing that accompanies Tea Party rallies. The fight in this election is on many fronts, the media being one.)

Keep an eye on this election. And if you live in Wisconsin or know those who do, encourage them to vote like hell. This may end up being more important than the November election.

Comments are closed.

  1. Mississippi Yankee

    I think the Wisconsin recall election will be fraught with misdeeds. This particular vote may very well seal the fate of Labor’s stranglehold on federal workers, teachers and even manufacturing. IMHO these people KNOW it’s for all the marbles. I’m not so sure the right and the Utopians (libertarians) fully grasp this fact.

    Books will be written on the skullduggery and Machiavellian manipulations in Wisconsin for the past year. And with Chicago just 40 or so miles to the south just do the math…

    Of course with the monumentally insane wins by the socialist in both France and Greece today all austerity plans for the euro-zone become moot. And with it the end of the euro itself, probably before OUR Nov. e(r)ection. You may call me a conspiracy theorist but it (the “big” picture) doesn’t stop my asshole from puckering any less.

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  2. Seattle Outcast

    Of course with the monumentally insane wins by the socialist in both France and Greece today all austerity plans for the euro-zone become moot. And with it the end of the euro itself, probably before OUR Nov. e(r)ection. You may call me a conspiracy theorist but it (the “big” picture) doesn’t stop my asshole from puckering any less.

    I see the Euro as being non-existent as currency in a few years, except to coin collectors. Nor do I see much of a future of the European economic zone, because inflation is going to hit levels not seen since Hitler’s rise to power. Which is pretty much what I see coming out of Europe in the next generation – Fascism and other flavors of socialist stupidity, because they obviously haven’t learned shit about economics in the past century.

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  3. Seattle Outcast

    You have to be some kind of stupid to post an article that says socialism isn’t the answer, then proceeds to explain that socialism really is the answer.

    Time to grab another chicken….

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  4. Mississippi Yankee

    “Insane win by socialists in Greece”? Wtf? They lost big time…

    So are you saying a conservative, financially austere, cost cutting govt. will emerge from this election?

    Voters angry over austerity delivered a blow to Greece’s ruling parties on Sunday, with neither the conservative New Democracy nor the Pasok socialists winning enough votes to form a government while far-left Syriza took second place.

    Greek voters punish ruling coalition, reward far left

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  5. Kimpost

    No, that’s not what I’m saying. But the voters punished Pasok (the Social Democrats) for their austerity measures. Who knows what will happen in Greece. They are in a world of hurt, and if they think that leaving the Euro will help them, then so be it. I still doubt that it will happen.

    I’m less pessimistic about France. I don’t think that Hollande will break the fiscal pact. It’ll cost too much., plus he’s not that confrontational. He might however, try to find some stimulus money on top of the fiscal pact. I’m more disappointed with Hollande (and Sarkozy) because of their flirting with Le Pen. This whole blame the immigrants crap sickens me.

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  6. Mississippi Yankee

    But the voters punished Pasok (the Social Democrats) for their austerity measures.

    I’m pretty sure Social Democrats doesn’t mean what you think it means

    Greece is gone, for a different reason France is lost and the euro (which Sweden never embraced) will go the way of the Do Do.

    Le Pen did a lot of damage in this election and Hollande still does have enough votes for a coalition. Watch for a deal.
    But hey, ObamA++ has just invited Hollande to come visit next week so they can get on the same page before the G8 and NATO meetings.

    Obama invited Hollande for bilateral talks at the White House later this month ahead of a G8 leaders meeting he will host at his Camp David retreat in Maryland between May 18-19, and a NATO transatlantic alliance summit in Chicago on May 20-21.

    What is your solution for the Islamifacation of France? WHAT? You don’t believe France is being over-run by Islamist?

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  7. CM

    You seem to think that ANYTHING apart from unbridled capitalism equates to socialism. That’s just nonsense. Perhaps you could broaden your thinking a little. Or will it do too much damage to your rep?

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  8. mrblume

    Of course with the monumentally insane wins by the socialist in both France and Greece today all austerity plans for the euro-zone become moot. And with it the end of the euro itself, probably before OUR Nov. e(r)ection.

    Seattle Outcast had least has the common sense to put the goalpost of his doom mongering a few years into the future. Yeah, November, that’ll happen.

    Hollande is actually the right thing at the right time. It was important to push for more austerity, but that has run it’s course now.

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  9. Hal_10000 *

    Jesus, that Reich article is a piece of work isn’t it? According to Reich, we need to:

    1) raise taxes on the rich

    2) increase tax credits for poor

    3) strengthen unions with card check, among other things

    4) impose 35-hour work week

    5) create single payer health care

    6) cap executive salaries

    7) increase education spending, including government preK

    8) most importantly, not call the above “socialism”. Shhh. Be vewy vewy quiet. We’re hunting voters.

    I’m reminded of the joke about the academic who proved that the Iliad wasn’t written buy Homer but by another Greek of the same name.

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  10. Seattle Outcast

    8) most importantly, not call the above “socialism”. Shhh. Be vewy vewy quiet. We’re hunting voters.

    ‘Cause you’re only “fixing capitalism” – by implementing standard eurosocialism policies, which aren’t “socialist” but only all about keeping those evil 1% bastards from getting “too rich” by making them pay for everyone’s “free” shit. Yeah, that’s not a duck, it just quacks and swims like one…

    You don’t “fix” capitalism, you set it free

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  11. Kimpost

    I’m pretty sure Social Democrats doesn’t mean what you think it means

    I’m pretty sure it does. Pasok was the main reason why austerity measures were accepted in Greece in the first place. Together with New Democracy they made it happen. As a result a lot of discontent people have cast their votes on extreme sides of the isle. Both sides, mind you. This election wasn’t a socialist takeover.

    The Euro might go, but I’m not as sure about that as you are. In fact I think that the risk of that is slim. It would cost too much.

    What is your solution for the Islamifacation of France? WHAT? You don’t believe France is being over-run by Islamist?

    It’s not a question of believing. It’s a fact that it just isn’t happening. The notion is laughable.

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  12. CM

    The Reich piece makes the point that the current capitalist system is a continual train wreck. It’s simply not sustainable. So yeah, it’s about reworking how our capitalist systems work to ensure it can keep going.

    That doesn’t equate to socialism. It’s a way of avoiding collapse. But putting your fingers in your ears and contuinining to chant ideological slogans does equate to stupidity.

    …a growing portion of the population lacks the purchasing power to keep the economy going. In the United States, consumers account for 70 percent of economic activity. If they as a whole cannot afford to buy all the goods and services the productivity revolution is generating, the economy becomes stymied. Growth is anemic; unemployment remains high.

    As he points out, socialism is a zero sum game. But retooling the economy to enable more people to buy the goods and services being provided isn’t a zero sum game. It keeps everything moving and it lessens reliance on debt-fuelled consumption ‘growth’ that so many people seem to be enamoured with.

    Perhaps stop spending so much time looking for commies under every bed?

    all about keeping those evil 1% bastards from getting “too rich” by making them pay for everyone’s “free” shit.

    It’s no good to the rich if there’s a declining number of people to buy the goods/services that got (and keeps) them rich. It’s even less good for the rich if there are more and more people joining groups like Occupy Wall Street. It’s even less good for the rich if the whole system comes crashing down because too many people don’t accept it anymore.
    But all you seem to have in response are simplistic slogans.

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  13. Seattle Outcast

    The Reich piece makes the point that the current capitalist system is a continual train wreck. It’s simply not sustainable. So yeah, it’s about reworking how our capitalist systems work to ensure it can keep going.

    If by “reworking” you meant “remove all the euro-socialist shit that’s been attached to it, and let it work properly”, you’d be right. But you don’t mean that, so it’s back to fucking chickens for you.

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  14. Mississippi Yankee

    I’m pretty sure it does. Pasok was the main reason why austerity measures were accepted in Greece in the first place. Together with New Democracy they made it happen. As a result a lot of discontent people have cast their votes on extreme sides of the isle. Both sides, mind you.

    Pretty sure all of the riots we all saw on TV and the web were caused when austerity was not accepted by the Greeks.

    This election wasn’t a socialist takeover.

    Sorry, equating ‘far left politics’ and socialist may be a grammatical error on my part. What I should have said is goddamn Marxist. Like Lenin I sometimes forget there is supposed to be a transition.
    My Bad

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  15. Mississippi Yankee

    CM
    The US isn’t that much different than when you briefly passed through a few years ago. But because you now receive all of your perceptions via lefty friends and lefty pundits you really NO idea what life if like in America.
    Progressive enclaves are a very poor representation of MY country.
    /double entendre intended/

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  16. CM

    If by “reworking” you meant “remove all the euro-socialist shit that’s been attached to it, and let it work properly”, you’d be right. But you don’t mean that, so it’s back to fucking chickens for you.

    How exactly does “letting it work properly” (presumably unregulated capitalism) not just exacerbate make problems he points out? A key point is that the current system fails because increased concentrations of wealth means there are less and less people to buy and goods and servives. So everyone loses. And it’s not that the system rights itself by naturally unconcentrating the wealth. The rich just hoard, and the poor and middle class just borrow unsustainably. And around and around we go. How is making that even worse going to assist? Surely it’ll be more likely to bring the system down because so many people will revolt against it. Earned tax credits for the middle class are already an attempt to put a large sticking plaster over a fundamental problem.

    Stiglitz made pretty much the same argument here.
    http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105

    I’m yet to hear an reasoned counter-argument (i.e. “that it doesn’t matter because….”)

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  17. Mississippi Yankee

    We are about to see how many John Galts reside in France.

    Quiz for the less serious – What will Johnny Depp do?

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  18. Argive

    It’s not a question of believing. It’s a fact that it just isn’t happening. The notion is laughable.

    Yes, Clichy-sous-bois and the other banlieue are not France as a whole.

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  19. Monolith

    If nobody has money to buy stuff, then the price of stuff goes down. How is that so complicated? Why do governments have to step in and cast wide nets of regulations? It’s like sports, make sure everybody plays by the rules, but talent wins on the field. There’s no need to fix the game, cough GM, cough. Someone else will pick up the ball. Fucking government fucks up everything they fucking touch.

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  20. CM

    If nobody has money to buy stuff, then the price of stuff goes down.

    But it doesn’t. Not really. Otherwise real wages wouldn’t have fallen.

    For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone.

    Wages for most have gone nowhere, but prices have still gone up. That means a decline in real wages. If prices had decreased, real wages would have gone.

    Why do governments have to step in and cast wide nets of regulations?

    That’s exactly what I’m asking. How does doubling-down on the problems improve the situation?
    The theory does not seem to be internally consistent.

    Capitalism, as currently practiced, appears to be unsustainable. A system which continues to increasingly concentrate wealth at the top, and relies on debt-fulled consumption based ‘booms’ to get everyone else through is bad, for everyone.

    It’s like sports, make sure everybody plays by the rules, but talent wins on the field. There’s no need to fix the game, cough GM, cough. Someone else will pick up the ball.

    The game IS fixed, because power is increasingly concentrated in one small segment of society. It’s nothing like sports.
    Growing inequality is the flip side of something else: shrinking opportunity. There are fewer and fewer people with the opportunity to pick up the ball.

    Fucking government fucks up everything they fucking touch.

    So an unsustainable system must be sustained because of a distrust in government?
    At the end of the day, the government is representative of the people. If enough people have had enough and see the system as unsustainable and rigged, the result is likely to be far far worse than what Reich and Stiglitz are advocating.
    This is exactly Reich’s point. In order to save capitalism we need to reform it. Better to have a reformed version than the inevitable consequences.

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  21. CM

    That’s why most of the gains from the productivity revolution are going to the owners of capital, while typical workers are either unemployed or underemployed, or else getting wages and benefits whose real value continues to drop. The portion of total income going to capital rather than labor is the highest since the 1920s.

    Increasingly, the world belongs to those collecting capital gains.

    They’re the ones who demanded and got massive tax cuts in 2001 and 2003, on the false promise that the gains would “trickle down” to everyone else in the form of more jobs and better wages.

    They’re now advocating austerity economics, on the false basis that cuts in public spending – including education, infrastructure, and safety nets – will generate more “confidence” and “certainty” among lenders and investors, and also lead to more jobs and better wages.

    None of this is sustainable, economically or socially.

    http://robertreich.org/post/22204212722

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  22. Mississippi Yankee

    The Euro might go, but I’m not as sure about that as you are. In fact I think that the risk of that is slim. It would cost too much.

    Kimpost.

    CNBC reports, you decide,or misdirect or…

    When handed the right to try and form a coalition government in Greece, he told the world that the Greek bailout agreement is “null and void” and should be abandoned.

    This sent global markets reeling because he could potentially unleash a series of events that would force Greece to leave the euro zone.

    Besides abandoning the bailout, Tsipras said he’d like to nationalize the banks permanently, restore all salaries and pensions to their previous higher levels and bring back collective bargaining rights.

    Yeah, nothing socialist about this guy right?

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  23. Kimpost

    Eh…?

    You quote me saying that I don’t think that the Euro will fall, and then go on about a Greek leader who doesn’t like the fiscal pact? Separate issues, aren’t they? No shit the winners of the Greek election doesn’t like it. The extreme left, as well as the extreme right despises it. The result of this election was a kick in the groin of the establishment parties (left and right) who actually tried to be responsible. Populists who claim that Greeks are being slapped around by the EU won. Actual Nazis got 7% ffs.

    I very much doubt that Tsipras will be able to form a government anyway. We’ll likely be looking at new elections this summer.

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  24. AlexInCT

    But it doesn’t. Not really. Otherwise real wages wouldn’t have fallen.

    Which wages have fallen? You mean the ones for people with little to no skill or in employment fields where there are anywhere from 30,000 to 3 people – those numbers are illustrative so don’t bother asking me for links – for every job? Those wages?

    BTW, my wages have never fallen. In fact, even in depressed times like this one, I am seeing my income grow and I am getting bonuses when others get told though titties. No, not because I am part of the inner circle or 1%ers, but because I work my ass off and provide value that my employer feels like rewarding, even when resources are tight.

    Wages for most have gone nowhere, but prices have still gone up. That means a decline in real wages. If prices had decreased, real wages would have gone.

    Really? Why? Marxist nonsense. I see you avoided mentioning the whole living wage thing that is the bread & butter of the grievance mongering class. Besides, the idiotic notion that people are owed a living wage is the bane of all economic systems. Marxism and the concept of the living wage fail because they ascribe the same wage value to a turd polisher working 40 hours a week as an eye surgeon or semiconductor engineer working the same hours. I do not know about you, but I will not

    All labor is NOT equal. Skilled and highly skilled workers have seen their wages rise. So have useless bureaucrats working for the public sector, with ridiculous jumps in compensation & benefits in a very short window. Those workers that used to make a living doing menial work have seen stagnation, if not decline. But that’s because they couldn’t or couldn’t care to learn something that would pay more, and now have to compete far harder for a job.

    Prices have gone up because of a number of things ranging from massive overhead due to regulation and massive deflation of currencies as governments borrow & spend. Shit, we had a massively distorted housing market that just crashed because of both of these issues I just mentioned. Pick any product you want to point out costs more, and I will show you how regulation and deflated currency affect that price. A car that requires and expensive computer to handle emissions and as consumption amongst a slew of other items, has to have a back up camera (mandated in the US by 2014), and has to meet a slew of crash safety regulations, is going to cost far more than an equivalent gas guzzling behemoth of even 20 years ago.

    However, even if you ascribe to the philosophy that prices have all gone up, something I disagree with as I know of many things have gone down in prices too, it is quite obvious that access to these items is at an all time high. Televisions, and even cars to some extent, used to be luxury items 5 decades ago. Today they are not. Even the poor people have at least one color TV, and many, unless they live in a suburban area, have cars too. Look at cell phones! You can not imagine the many times I have walked past some bum begging for change but listening to music on his iPhone. WTF?

    Any way you paint it, people talking about how wages have not gone up and how unfair it is for people that do the hard work or take the risk to make more money, no matter how hard they pretend otherwise that what they seek is justice, are doing that out of base emotions: it is nothing but jealousy/envy of what others have. Doubly so when the most hard core justice mongers always infer that the only cure for these injustices is to use the power of government to drag down & punish the successful, instead of opening up the system so more people can take the risks and work hard and become rich. Especially when the only bad rich people are the ones that don’t lend lip service to this government sanctioned thuggery and robbery, in public, but then in return for special favors that enriches them even more – like that asshole Buffet and the dickhead Immelt, if you want examples – but ask that the horribly cumbersome and abusive system actually be made more fair so everyone has a chance to earn on their own merits instead of letting government pick the winners & losers.

    Collectivism sucks the life out of people, and replaces it with the illusion of security. It’s just shared misery that allows the envious/jealous people to feel better about being losers.

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  25. Seattle Outcast

    BTW, my wages have never fallen. In fact, even in depressed times like this one, I am seeing my income grow and I am getting bonuses when others get told tough titties. No, not because I am part of the inner circle or 1%ers, but because I work my ass off and provide value that my employer feels like rewarding, even when resources are tight.

    I took the route of “boss needs someone to manage this section of the department so he can get his other work done. I’ll just start doing it on my own and let him judge the results.” Initiative and competency get rewarded.

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  26. CM

    Which wages have fallen? You mean the ones for people with little to no skill or in employment fields where there are anywhere from 30,000 to 3 people – those numbers are illustrative so don’t bother asking me for links – for every job? Those wages?

    Stiglitz:

    While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top.

    An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul.

    Reich:

    In the United States, almost all the gains from productivity growth have been going to the top 1 percent, and the percent of the working-age population with jobs is now lower than it’s been in more than thirty years (before the vast majority of women moved into paid work).

    ‘Real wages’ are used because they provide a comparison over time.
    And no, the issue is that it’s not just those at the bottom suffering a loss in real wages. It’s that the middle class are increasingly not being able to buy goods and services to pick the economy back up. The rich can’t kickstart the economy by themselves, it’s largely driven by government and consumer spending.

    BTW, my wages have never fallen. In fact, even in depressed times like this one, I am seeing my income grow and I am getting bonuses when others get told though titties. No, not because I am part of the inner circle or 1%ers, but because I work my ass off and provide value that my employer feels like rewarding, even when resources are tight.

    Congratulations, that’s really great. However I’m wondering if you understand the difference between ‘wages’ and ‘real wages’. And also the difference between a single person’s wages and the ‘real wages’ of a significant segment of society on which the economy depends?
    I certainly do more than my fair share and earn for the company much more than I cost, but I haven’t had a payrise for at least 3 years. I’ve effectively had to subsidise other parts of the business. It doesn’t really matter how much I do all the ‘right things’. There simply hasn’t been any money coming in to give me a pay rise.

    Really? Why? Marxist nonsense.

    Um, no, that’s basic economics. ‘Real wages’ are nothing to with Marxism, but a measure of the actual value of income over time. I’m a little surprised that you haven’t come across this before.

    I see you avoided mentioning the whole living wage thing that is the bread & butter of the grievance mongering class.

    ‘Living wage’ isn’t an ecomonic term. ‘Real wages’ is quite different and doesn’t require any subjectivity.

    Besides, the idiotic notion that people are owed a living wage is the bane of all economic systems.

    I would say it’s no less nonsense than putting your fingers in your ears and spouting nothing but pure dogma in response to an issue that does exist and poses a very real (and apparently increasing) threat to capitalism as we know it. A ‘living wage’ is simply the concept that if a job doesn’t pay enough to live on, then what’s the point of it?

    Marxism and the concept of the living wage fail because they ascribe the same wage value to a turd polisher working 40 hours a week as an eye surgeon or semiconductor engineer working the same hours.

    I’ve never heard that, sounds ridiculous. I’m not talking about taking something to such an extreme that it becomes ridiculous.

    All labor is NOT equal.

    Couldn’t agree more.

    Skilled and highly skilled workers have seen their wages rise.

    I’ll see what I can find to support that claim (I now know better than to ask). I’ve only read that it’s either flat-lined, or declined.

    So have useless bureaucrats working for the public sector, with ridiculous jumps in compensation & benefits in a very short window.

    As above.

    Those workers that used to make a living doing menial work have seen stagnation, if not decline. But that’s because they couldn’t or couldn’t care to learn something that would pay more, and now have to compete far harder for a job.

    If those jobs exist, they’re presumably required (so people moving into less menial work wouldn’t affect the numbers, as they’d be replaced by someone else). However if the real wages for those menial workers fall, then they either consume less, or they do into debt to consume the same amount. The economy needs them to be consuming, and consuming a lot. So they go into debt. And then we’re on our way to a debt-fuelled fake-boom, which is then inevitably exposed by a crash because the whole thing is fundamentally unsustainable. Alternatively they don’t go into debt (but of course they do, because it’s human nature) and the economy never gets off the bottom of the floor.

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  27. CM

    I took the route of “boss needs someone to manage this section of the department so he can get his other work done. I’ll just start doing it on my own and let him judge the results.” Initiative and competency get rewarded.

    Not if there isn’t any money to do so.
    (Don’t get me wrong, I’m totally a believer in people showing initiative for reward, I’m just saying that there are some fairly large factors that also need to be in place for the reward to be available).

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  28. CM

    However, even if you ascribe to the philosophy that prices have all gone up, something I disagree with as I know of many things have gone down in prices too, it is quite obvious that access to these items is at an all time high.

    Nobody is claiming that “prices have all gone up”. Again, look into what ‘real wages’ means. Gas and commodity prices are the key.

    Televisions, and even cars to some extent, used to be luxury items 5 decades ago. Today they are not. Even the poor people have at least one color TV, and many, unless they live in a suburban area, have cars too. Look at cell phones! You can not imagine the many times I have walked past some bum begging for change but listening to music on his iPhone. WTF?

    That bum having an iPhone doesn’t alter the economic reality of a decline in real wages for the people which the economy relies on to keep consuming. When the rewards increasingly go to the top (and which doesn’t filter down, and if it does it’s invested in capital instead of labour) there are going to be some serious problems with keeping the economy going. People suffering a decline in real wages are also more likely to buy those foreign-made cheap products, which further depresses the local economy.

    Any way you paint it, people talking about how wages have not gone up and how unfair it is for people that do the hard work or take the risk to make more money, no matter how hard they pretend otherwise that what they seek is justice, are doing that out of base emotions: it is nothing but jealousy/envy of what others have.

    And when people claim that it leaves the impression that they want to avoid discussing some pretty serious problems with their rigid ideology.
    So put aside accusations of unfairness and justice (and arguments about whether many of those people at the top worked harder than anyone else or took any actual risk). Simply look at it in economic terms. That’s the WHOLE point of the Stiglitz article in Vanity Fair that I linked to. If there are more and more people earning less and less in terms of real wages, the economy is only going to go backwards.

    Doubly so when the most hard core justice mongers always infer that the only cure for these injustices is to use the power of government to drag down & punish the successful, instead of opening up the system so more people can take the risks and work hard and become rich.

    Well I’m asking how that that actually works in practice, but nobody has been able to even begin to explain it. How does enabling wealth to concentrate at the top to an even greater extent assist the economy? We know for the fact that it doesn’t result in wage growth. So precisely how does it enable the lower and middle class to consume more and incur less debt? You seem to be very confident that it does, so you must know.

    Collectivism sucks the life out of people, and replaces it with the illusion of security. It’s just shared misery that allows the envious/jealous people to feel better about being losers.

    And ideology means doing nothing more than repeating these sorts of mantras.

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  29. Seattle Outcast

    Reading your posts is an education in economic illiteracy. Seriously, just stop and go back to school.

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  30. CM

    Why not replace insult with argument? If I’m so clueless, it should be very easy to explain exactly how the economy recovers and continues to grow when 90% of income earners continue to flat-line in terms of wages. If they aren’t going to borrow it (those setting up another debt-fuelled consumption boom and crash), where does it come from? Or is it that the economy doesn’t actually rely on that 90% spending in order to sustainably recover and grow? If not, how?

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  31. AlexInCT

    Why not replace insult with argument?

    Because much better people than me have not only already made the case, and made it quite well, but the people that keep agitating for class warfare and pretending that what they want is fairness, have basically destroyed the western economies with their bullshit. Arguing based on the motivation of these class envy warriors, while ignoring the end results of the policies and practices of class envy warriors, is like arguing whether communism was a success or not based on the fact there are still idiots that believe it will work if it is just given a chance to happen without interference from evil capitalism.

    Not interested in wasting time pretending social engineering, and have no doubt that the people pushing what you are do so CM because they want to social engineer, can ever work when it should be obvious by now, based on the basic laws of nature (real science) that it never, ever will. The world is not fair. And the people that have tried to correct that injustice, throughout human history, have always been forced to try to implement that social justice through force and basically denying people freedom. I prefer an unfair world where I am free, over one that reflects the realities of the USSR: on paper it looks utopian, but un practice it is hell on earth.

    Here is a clue: if you feel you are not making enough work harder AND smarter. Don’t try to steal it from others and then tell me you have different life priorities than work, which is always what the losers that believe in the confiscation of weath from others as something just, use to justify their sloth.

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  32. CM

    WTF? It’s like you’re reading what you want to read, not what I’ve actually written. It’s like you’re responding to a generic ideological rant with a generic ideological rant, except my comments are nothing of the sort. As I keep pointing out, I’m not arguing based on any such motivation. Leave motivation aside completely, please. It’s not necessary in order to have the discussion about the realities of how the economy is expected to work. Stick to the economics.
    But if you’re simply incapable of discussing this without the bullshit, then fine. Almost everything you’re written bears no relationship to what I’ve written.
    And anyway, growing anger and frustration doesn’t just come from those who want to social engineer, it comes from an increasing number of people who come to see the whole thing as rigged. This is the central problem. It’s delusional to keep belieiving that the only people who see serious issues are those that want to social engineer and steal. If it wasn’t so delusional it might even be considered offensive.

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  33. CM

    Nouriel Roubini, one of the few economists to foretell the housing bubble’s doom prior to 2008, doesn’t think much of premature austerity — as in austerity imposed, say, right now. “The Eurozone has an austerity strategy but no growth strategy,” he observed recently.

    Without that, Roubini said, austerity and reform become “self-defeating” — not only will the absence of growth worsen government deficits, but “the social and political backlash eventually will become overwhelming.”

    Convincing evidence of austerity’s downside comes from Britain. There a Tory-led coalition government cannonballed into the austerity pool without any prompting from the European Union, cutting government spending 20% across the board. The result is a double-dip recession and a recovery rate far below that of the U.S., where the White House and congressional Democrats put the kibosh on the most draconian austerity proposals coming from the GOP. Britain’s recovery even lags behind the Eurozone, which has gotten all the bad press recently.

    Another lesson suggested by the reaction of the middle and working classes in France and Greece is that what gets under voters’ skin isn’t merely austerity, but applying it unequally.

    Here’s how that applies to the policy debate in the U.S. If you’re cutting Social Security benefits for the working class to preserve tax rates favoring the rich, that’s unequal austerity. When interest rates on student loans are doubled and government aid for graduate students is eliminated, that’s unequal austerity. When public school teachers and librarians are laid off, that’s unequal austerity.

    http://articles.latimes.com/2012/may/08/business/la-fi-hiltzik-20120508

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