Tuesday, February 22, 2011

State Budget Crises and Union Busting

The events in Wisconsin over the past couple weeks have pointed to a strategy by Republican fiscal conservatives that we may see play out in a number of states where huge budget shortfalls are forcing state lawmakers to make cuts and raise taxes. In Wisconsin, a controversial attempt to end the collective bargaining of unions (especially those of teachers' unions, the most vilified in the media) is being fought in major protests by state workers. Fiscal conservatives point to the fact that everyone has made sacrifices since the economic meltdown of 2008 and the unions need to take similar measures. But is this notion that unions have not made sacrifices true?

The short answer is a resounding no. Unions' ability to negotiate in the time of economic downturns has been made increasingly difficult in the past several years. The amount of money that state workers and teachers are now required to pay in health care premiums have more than doubled in the last decade. The amount of pensions being paid has also been cut and raises have not been paid that accord to inflation.

Why then this new massive attack on unions? Unions serve as the base of the Democratic Party and among the top ten contributors to the 2010 elections, only unions were able to be placed in the top ten makers of political donations among the conservative PAC's that dominated the support for tea-party candidates. With the 5-4 decision of the Supreme Court in Citizens United, we will see a continued rise of corporate monies going to conservative candidates who will repay their donors with major federal subsidies and tax cuts, which will not go to product development or aiding their workers but creating huge bonuses for their executives.

According to many pundits and Wisconsin legislators, the state was on the track to have a budget surplus this year, but the new tea-party governor, Scott Walker, created massive tax cuts to corporations that has now created a major budget deficit. Somehow these tax cuts are not the issue, but rather the "entitlements" of unions.

For Republicans, their mantra of budget cuts masks their true conservative agenda that wants to see Planned Parenthood funds cut to nothing. They want to eviscerate the few institutions of power the Democrats may have and that remains the public-employee unions across the nation. The tax burden of the richest Americans is in no way the high burden that many Republicans claim, far lower than most industrialized, Western nations. The tax code needs to be reformed and with this reform a general lessening of maximum tax rates will be achieved, but so many loopholes need to be closed (even Mitch McConnell agrees with this point). Carnival Cruise Lines paid only 1% of their billion-dollar profits to the government last year. General Electric actually received more money from the federal government than it paid in taxes in 2009. Small businesses, however, do not possess two floors of tax attorneys who know how to negotiate the loopholes that result in paying virtually nothing in federal and state taxes.

Many people have been duped by Fox News and its incessant partisan "reporting." The assiduous rants of O'Reilly and Beck tell these people that it is liberal, commie fascists who are out to destroy the American way of life and "bankrupt our grandchildren." As we all know, fear is a great way to boost ratings and a way to mask actual issues and debates and frame them in apocalyptic language that gets us nowhere. (Glenn Beck is currently convinced the end of times is nigh with Obama as the Anti-Christ. How is this news?).

In 1975, New York state faced a dire financial situation. creditors began to fear that the riskiness of the state's holding would result in the defaulting of major municipal bonds. The Governor at the time, Hugh Carey, vowed everyone would need to make huge sacrifices, especially public unions. The rhetoric he used is identical to what we hear today, but what actually was necessary in solving the 1975 crisis. The wealthiest billionaires who find municipal bonds to be a huge boon to their profit margins saw in the 1975 crisis (and our present crises) an opportunity for renewed cash flows. Credit is withheld to fund these shortfalls or create new businesses (something also creating problems on the job-creation front today), until the situation is so dire that major cuts have occurred and these creditors can step in with a magic wand that has huge interest rates that will pay these creditors huge amount of money. So we will sacrifice our unions and pensions in order to give the wealthiest half of a percent of the American population more money? I think not.

Rather than attacking Wall Street investors and their major avarice, we turn on the teachers, federal workers, and state employees, who played no part in the economic meltdown of 2008. That was caused by the cutting of taxes, the increase of spending (especially military) and most importantly the de-regulation of financial investment tools. The attack of public employees is an easy scapegoat in a time when rich conservative fundraisers (e.g. the Koch brothers) can donate massive amounts of money to make sure that these more liberal-leaning institutions are destroyed.

We should all stand with these unions because without them the ability to negotiate with employers will be impossible. Without unions, the gap between the rich and poor will increase to levels not seen since the Gilded Age. The evisceration of the middle class will be complete, and those poor dupes of Fox News will wake up one day to find their way of life is no longer. Hopefully, they will wake up and realize it wasn't Obama's fault.

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