The Battle of Wisconsin

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In today’s NYT, Paul Krugman does an excellent job of detailing the power game going on between the unions and the Wisconsin governor:

For what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin – and eventually, America – less of a functioning democracy and more of a third-world-style oligarchy…In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views

Indeed, Krugman gets this part right.

As for the oligarchs involved, it’s the Koch brothers. Mother Jones reports:

According to Wisconsin campaign finance filings, Walker’s gubernatorial campaign received $43,000 from the Koch Industries PAC during the 2010 election. That donation was his campaign’s second-highest, behind $43,125 in contributions from housing and realtor groups in Wisconsin. The Koch’s PAC also helped Walker via a familiar and much-used political maneuver designed to allow donors to skirt campaign finance limits. The PAC gave $1 million to the Republican Governors Association, which in turn spent $65,000 on independent expenditures to support Walker. The RGA also spent a whopping $3.4 million on TV ads and mailers attacking Walker’s opponent, Milwaukee Mayor Tom Barrett. Walker ended up beating Barrett by 5 points. The Koch money, no doubt, helped greatly.

It’s not entirely clear how the defeat of unions helps the Kochs, but it certainly looks like a benefit for the Koch Organization, and their far ranging operations, rather than a libertarian principled move. A libertarian move would be more focused on ending government involvement in education, not simply taking away the union cards of public school teachers. So Krugman is correct when he points out the power grab here, but then Krugman incredibly puts on his union t-shirt and calls for the unions to grab the power:

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions… So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t.

The problem with Krugman’s thinking here is that he sees the power center as something that must continue to exist and he wants the unions to control it instead of the Kochs. It’s a scary thought when oligarchs, the Kochs or others, get to control a power center, but it is just as scary for unions to control the power. In both cases, they will operate in their narrow self-interest and not ours.

The most logical move to neutralize these power seekers is to eliminate the power center themselves. In the case of education, education should be left in the hands of the free market, with no government role at all (not even vouchers). Calling for one power group to take control versus another is still a case of choosing a dictator, rather than freedom. The free market option would eliminate the dictator and allow education to flourish the way the cell phone and personal computer industries do today, with aggressive competition, falling prices and a thousand more options than could ever develop out of a bureaucracy. Krugman is right in fearing a power grab by the Kochs, but he should also fear a power grab by the unions. The Kochs are framing their battle as a battle about unions and not about liberty and that is a tragedy.

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2011 Economic Policy Journal

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