Austerity or Anger

By Sarason D. Liebler | Jun 22, 2012

On Tuesday, June 5, 2012, voters in Wisconsin, San Jose and San Diego upset the status quo. In Wisconsin voters voted strongly to block the recall of the sitting governor who had successfully led an effort to curb the ability of public service employees through their very large and powerful union to bargain collectively, cutting their pensions and benefits. It is estimated that his actions will save taxpayers big bucks over time.

In San Diego, voters moved to shift the municipal public employees from their lush pension plans to typical 401k plans that private workers make do with.

Meanwhile, in San Jose, Calif., the voters exercised their right to redo the deal the town had inked some years ago, cutting the pensions and benefits of the police and firefighters, who commonly piled up overtime in their last year before retirement to hit 30 percent of their final annual haul, thus having many hit retirement with over $100,000 per annum for life. They also raised the retirement age significantly.

Lawsuits have already been filed by the unions.

Pundits have landed on this phenomenon with both feet, but reasoning is not consistent. The Republicans see a watershed of anti-Democratic common sense; the Tea Party claims that they brewed the tea and the Democrats claim that means nothing for November because the exit polls still showed them that the newly frugal still handily preferred Obama over Romney.

Franklin Delano Roosevelt, our late four-term president from 1932 until 1944, very much a Democrat, always resisted union collective bargaining activity by public service workers. He saw it for what it was, a chance to coerce elected officials. Alexis de Tocqueville predicted the problem in the 1820s in his study “Democracy in America.” President John Fitzgerald Kennedy opened the door wide in 1962 when he permitted federal employees to unionize.

In Greece they would be rioting, while here, for other than the “99%” or “The Occupiers,” if you or they prefer, most remain serene. "Austerity" is not the curse word it has become in many parts of the Euro Zone. I do not like the idea of reneging on deals, as they clearly have done in San Jose, but the choices were grim and are terminally overdue all over the country.

But reading these recent results as a predictor for November will not hold until we see more. Romney does not dare attack working people who have lucrative if unreasonable contracts, but Obama does not dare urge rustic austerity on America while he wistfully and unsuccessfully seeks to prime the economic pumps of a recovery while pushing for the progressive agenda of his base, which most definitely includes large unions.

How this plays out will be determined by what other actions are taken in additional locales that suffer the same levels of economic stress as Wisconsin and California. Maine comes to mind. It will also depend on Europe, where neither Obama nor Romney has any real influence over their counterparts, or the people who elected them.

From now until November we will see a long campaign. In a logical world one would reason that both major parties should move towards each other, causing their bases to move with them, all for the common good. Instead, I am inclined to believe that they will become even more concentrated in the extremes, and that is not good at all.

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