Monday, February 21, 2011

Who really are the most fooled by the Republican hypocrisy?

As there are interesting developments in the Arab world with probably Libya's and Bahrain's autocratic governments as next to go, there are also interesting developments in the USA. Developments that once again highlight perfectly the hypocrisy of the Republican - or Repuglican, rather - establishment. If you take at face value what they say instead of thinking and following what they really DO, you really are fooled. And the most fooled are the majority of Republican voters. Why? I'll get to that later...

This round of development has started in Wisconsin with their newly elected Repuglican governor Scott Walker opening the play. He is trying to muscle through a legislative bill that would strip worker unions of most of their bargaining rights and make their existence as difficult as possible. In other words, he's trying to make them disappear. He also demands some cuts to their entitlements and the unions have signaled they are willing to absorb them, but that is something he really doesn't care much. He really wants an end to labor unions.

When he acquired the governorship a few months back the Wisconsin budget was either a little on the surplus side (according to liberals) or seriously on the red (according to Repuglicans). As I did some googling I couldn't really discern the truth. I found out that the official budget two years back put the 2009-2011 budget shortfall at $5.363 billion and the then-governor's plan was to bring it at $245 million in surplus at the end of that budget period. I couldn't find out what the end result looked like. (Edit: Later it turned out that the current two-year budget was balanced, but the long term budget billions in the red, partly due to the economic recession of the last few years. Check the links and excerpts in the end of this article!)

Be it as it may, the governor's first order of business was to give tax breaks to the businesses to the tune of 120-150 million. After that, he sounded the alarm that there was a bugdet crisis! So, according to the Repuglican playbook, there is always room for tax cuts for the businesses and the wealthy. After that the usual move is to cut benefits from the poor and middle class families and make them pay for the shortfall. Pretty much what George W did after he inherited a massive projected government surplus from Clinton. He hammered through massive tax breaks for the rich and for the big businesses and so, in effect, gave them the surplus. He kept other big items out of the official bugdet so that it looked more rosy than the real situation and created massive debts with his wars and such and helped the economic crisis to come about by deregulating as much as possible. Idea here was to benefit certain wealthy interest groups and run the budget to the ground in silence so that the middle class and the poor would have to foot the bill. And when things get a little better economically, do it all over again - skim the cream of the cake for the wealthy through tax breaks etc and therefore create huge debts until the situation once again proves untenable and the taxpayers will have to foot the bill...

This is exactly the same pattern in miniature form in Wisconsin - the Governor either creates a budget crisis or makes it worse and immediately after that he tries to force the average citizen to pay one way or the other. This time, however, he is not only interested in making average citizens to foot the bill, but he also wants to strip labor unions of most of their bargaining power so that in the future they couldn't put up a fight. That way the unions couldn't annoyingly finance the Repuglican opponents in the future and the only campaign financing would be supplied by big business interests for the Repuglican benefit.

That is pretty much the plot in this play and other Repuglican governors are simultaneously doing exactly the same thing. And why am I saying that the majority of the Republican voters are the ones most fooled by this? That is because majority of them are more or less average workers and don't stand to reap in any benefits from the Republican policies that favor bigger earners at the expense of middle and low income earners. According to Pew Center, "Republicans have a median annual family income of $64,000; Democrats have a median annual family income of $46,000, according to a February, 2008 Pew survey".

That means that half of all the Republican households earn less than 64,000 USD every year, making them part of the majority that has to foot the bill. Just like they have to foot the bill for the economic crisis of 2008. Even then they still vote Republican for their own demise. So, either they don't realise that the politicians they vote for work to their detriment instead of for their benefit or they are just ideologically so driven that they don't care if they harm themselves. Either way that makes them the biggest fools in this game. Sad.

I've often wondered why the situation in Finland is not as extreme. The politicians and their tendencies are the same, but still I don't see the same excess here. I am sure there are a myriad of reasons for this, but I see a couple immediately. Here the big business hasn't been able to grab as much influence and is mostly in check compared with the US where they seem to run rampant and are gaining more and more influence each passing year. And the businesses here are not that BIG, so they may not have as vast resources of cash at their disposal. As the other reason I see the versatility and greater competition in our political landscape. In the US, they have in effect only two possibilities, the Democrats and Republicans and therefore limited choices and competition. Here we have three bigger political parties and lots of smaller parties, and soon we seem to have four bigger parties in our political spectrum. You know, like in business world there's monopoly, oligopoly and free competition. China is one-party-monopoly, the US has two-party-oligopoly and the real free competition happens where you have more than two dominant players. So, two-party-oligopoly is apparently only one step better than one-party-system...


Links and excerpts:

New York Times: Wisconsin Power Play

Wisconsin Legislative Fiscal Bureau: General Fund Tax Collection Projections
2010-11 General Fund Condition Statement
Based upon the November/December reports, the administration's general fund condition statement for 2010-11 reflects a gross ending balance (June 30, 2011) of $67.4 million and a net balance (after consideration of the $65.0 million required statutory balance) of $2.4 million. Our analysis indicates a general fund gross balance of $121.4 million and a net balance of $56.4 million. This is $54.0 million above that of the administration's reports.


New York Times: Wisconsin May Take an Ax to State Workers’ Benefits and Their Unions
But the plan in Wisconsin, which faces a $137 million shortfall in the current budget and a gap in the billions for the coming cycle, is among the most far-reaching of such proposals to be delivered to lawmakers. Mr. Walker expects swift approval.

Among key provisions of Mr. Walker’s plan: limiting collective bargaining for most state and local government employees to the issue of wages (instead of an array of issues, like health coverage or vacations); requiring government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now).
...
Mr. Walker made several proposals that will weaken not just unions’ ability to bargain contracts, but also their finances and political clout.

His proposal would make it harder for unions to collect dues because the state would stop collecting the money from employee paychecks.

He would further weaken union treasuries by giving members of public-sector unions the right not to pay dues. In an unusual move, he would require secret-ballot votes each year at every public-sector union to determine whether a majority of workers still want to be unionized.

He would require public-employee unions to negotiate new contracts every year, an often lengthy process. And he would limit the raises of state employees and teachers to the consumer price index, unless the public approves higher raises through a referendum.

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