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Exchequer

NRO’s eye on debt and deficits . . . by Kevin D. Williamson.

50 Wisconsins



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There are 49 more Wisconsins waiting to erupt. At least half the states are positioned to be bankrupted by their government-employee pension systems, but even the best-governed states are facing insolvency because of a factor that is mostly beyond their control: Medicaid. It’s interesting that the first battle is being fought in Wisconsin, but that is mainly because Illinois, the true-blue embodiment of fiscal imprudence, has basically surrendered without a fight.

What does this mean for near-term politics? Leave it to USA Today to get it exactly wrong:

In last year’s congressional elections, AFSCME, the largest public-employee union, gave $2.2 million to Democrats and $10,000 to Republicans, according to the Center for Responsive Politics, a non-partisan group that tracks money in politics. In 2008, AFSCME, founded in Wisconsin in 1932, spent $2.3 million opposing Sen. John McCain, Obama’s Republican opponent.

Union support will be vital to Democrats next year, especially in battleground states such as Wisconsin, to offset the flow of corporate funds into campaigns allowed by a 2010 Supreme Court decision. Last year, 11.9% of U.S. workers were represented by unions, down from 20% in 1983, the Labor Department says.

“Offset the flow of corporate funds.” This is the old “Big Business Backs Republicans” canard. It is not true. It has not been true for a long time. It would be difficult to find any Big Business sector that backs Republicans as lopsidedly as unions back Democrats. (And let me remind you for the 11,000th time that Barack Obama & Co. were carried to power on a wave of Wall Street money, with Goldman Sachs leading the way.)

For instance, take the software industry, a very big business indeed. Out of the five biggest recipients of the software racket’s political money in 2009–10, all five were Democrats: Patty Murray, Suzan DelBene, Barbara Boxer, Charles Schumer, and Harry Reid.

What about the mortgage bankers and the real-estate gang, a.k.a. the Committee to Reinflate the Bubble? Three out of five of the bankers’ top recipients in the last cycle were Democrats — Paul Kanjorski, John Adler, and Barney Frank, purported scourge of the banking world. The real-estate lobby’s top recipients were three Democrats — Schumer again, Alexander Giannoulias, and Kirsten Gillibrand — one independent trying to defeat a Republican — Charlie Crist — and one Republican — Carly Fiorina.

What about the fine gentlemen of the private-equity industry, fighting tooth and talon to defend the carried-interest tax rules that give them an enviably low tax rate? Their top dogs were Democrats Schumer (again!) Gillibrand (again!), Reid (again!) Michael Bennet, and one Republican, Mark Kirk.

Republicans do kill with dentists and coal miners. (Although Democrat Joe Manchin was the blacklung lobby’s No. 2 recipient.)

When people scream about the wicked evil corporations and their influence in Washington, they usually are really talking about the FIRE businesses — that’s finance, insurance, and real estate. Taken together, these industries do, at the moment, slightly favor Republicans, though their two largest recipients were — see if you can guess — Schumer and Gillibrand, again and again. But it is a myth that Republicans own Wall Street, or that Wall Street owns Republicans. As Open Secrets puts it: “The sector contributes generous sums to both parties, with Republicans traditionally collecting more than Democrats. Yet in the past two election cycles, bankers have suddenly shifted their cash toward Democrats.” But look at the charts for 1990 through 2010: hardly a runaway advantage for the Republicans, and nothing like the 220-to-1 advantage the Democrats enjoy when it comes to treasury-raiding union goons like AFSCME.

The narrative of Wall Street vs. Labor in the race to buy political influence is a false one. As often as not, Wall Street and Labor are on the same side, as they were when they helped elect Barack Obama.

What do Wall Street titans and Wisconsin government employees have in common? Above-average incomes, for one thing, and tight relationships with government that help them to maintain them. You bailed out the first gang of miscreants in 2008, and a lot of them came back for more. You bailed out the second gang of miscreants under the stimulus, and a lot of them are coming back for more, too. And they will keep coming back for more until one of two things happens: A. There’s no money left, or B. We stop them.

My money’s on A. Where’s yours?

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.


Tags: Debt , Deficit , Despair


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