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March 9, 2011 - Freedomain Radio - Stefan Molyneux
09:11
1864 True News - Wisconsin Inferno - Democracy Inaction

Imagine storming your boss's office if you did not get as big a bonus as you wanted... From Freedomain Radio

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Hi everybody, it's Stefan Wallin for Freedom Main Radio.
Hope you're doing very well. It's not exactly red.
It's a different room. Don't panic.
So I was watching some news this morning and this Wisconsin situation has taken an interesting turn in that the legislature has passed the bill limiting certain aspects of collective bargaining, and I use the word bargaining advisedly, And what it did was it needs a certain number of people present in order to vote on budgetary issues, but fewer of them to be present to vote on non-budgetary issues.
So it simply split the bill in two.
The aspects limiting collective bargaining were then voted on by the smaller number of legislatures required, and then the bill passed, and it's apparently going to be clear sailing from here.
Now, I did dig into the news.
I held my nose and dove into the cesspool of democratic politics.
And it took quite a while to find out what's exactly in the bill, but I thought I'd share it with you because it's kind of interesting.
So, it limits collective bargaining for the public sector to wages.
In other words, things like pensions and healthcare are now excluded from collective bargaining.
It limits raises to the consumer price index unless there is a referendum which allows people to vote otherwise and increase wage increases more than consumer price indexes.
It requires most unions to hold votes annually to determine whether workers still want to have the union or be in the union, and it also ends the state's collection of union dues from paychecks.
It's hard to see, I mean, other than from people who are sort of entitled, and these people do seem to be people who, it's like a toddler who's never been told no, who finally hears the word no.
It seems pretty democratic, you know, and people can vote for bigger increases if they want.
It also is very democratic, in that by limiting collective bargaining to wages, What it does is it forces politicians to actually fund the promises that they're making.
So when you do collective bargaining about things like pensions and healthcare in retirement, for a lot of the people who are bargaining at the time, you're pushing the cost many years into the future.
In other words, none of the people who, or few of the people, who will end up paying for all of these benefits are actually in the voting process.
They may not even be of legal age to vote at that point.
By limiting it to wages, politicians actually have to fund.
They have to stop giving future promises to these union members.
In 2009, state and local government employees earned 44% more than private sector workers.
Private sector workers had a per year percentage chance of losing their job of 20%, whereas for public sector workers it was 6% or less.
Now, I mean, Wisconsin is just one of the first in many states, and California is going to come up on this as well, where there's this just unholy financial mess that has occurred.
And the financial mess has occurred for a number of reasons.
Largely, it's just promising people lots of stuff in the future that politicians then get to avoid labor strike with public sector monopolies, which is pretty catastrophic for them.
They get to avoid labor strife by promising benefits way, way, way, way downtown into the future.
And that's pretty sleazy, pretty slimy.
Talk about taxing the...
The unborn. States and municipalities across the United States have promised over $3.5 trillion, about a quarter of the national GDP, in unfunded pensions.
That's pretty bad.
And the unfunded healthcare liabilities are probably going to be even higher.
Massively, completely, and totally unsustainable.
Now, some municipalities are allowed to, but states are not allowed To declare bankruptcy.
And that's really bad as a whole.
So in the Great Depression, for instance, over 2,000 government agencies ended up defaulting.
And that's very, very different from going into bankruptcy.
So when a private company goes into bankruptcy, a court or a trusteeship takes it over and then liquidates its assets, sells off all of its stuff in order to pay off its creditors.
But when a government, which is not allowed to go into bankruptcy, runs out of money, you end up with a default.
And a default is nobody gets anything.
Nobody gets anything. I mean, the state workers may not even get the pensions out that they've paid into because there's no court that's going to sort of take over the government agency and sell off all of its assets in order to pay off its obligations.
So that is a pretty bad situation.
And I think it's fair to say that I mean, can you imagine?
It's not like they've lost their job.
It's not like they've lost their benefits or they've lost their pensions.
They're just trying to create a situation where politicians who are making promises actually have to pay for those promises in the short run rather than deferring the cost for the long run, which is a sleazy but inevitable thing that is going to occur in the realm of democracy.
But can you imagine if some of your collective bargaining rights were taken away, the unjust and unfair ones?
To take a common sense view.
And you ended up storming your boss's office and barricading yourself and screaming and chanting, shame, shame, shame, and making threats and so on.
I mean, it's terrible.
It's terrible, terrible what government servitude does to people's levels of maturity and responsibility.
Everybody else has had to eat a massive shite sandwich in the economy over the past few years.
Government can no more protect these people from risk than Santa Claus can or the Tooth Fairy or Buddy Jesus or anybody else.
The risk is there.
The longer you defer it, the worse it's going to be when it finally comes to pass.
It's going to happen now.
There's going to be a lot of conflict.
And the news reporting is so skewed.
I mean, of course, there's lots of unions and newspapers, right?
And so they say, well, only 40x percent of Wisconsin's residents approve of what Scott Walker is doing, without mentioning, of course, that a good whack-load of the percentage who are opposed to him are people who are currently in public sector unions.
I mean, you'd have to subtract that for conflict of interest just to find out what the real rate, right?
So there's a bunch of people who are...
In the relative free market who are paying all these taxes to the people in the public sector.
And there are all these people in the public sector who are getting these taxes by force through the government.
And so when they say, well, I think it's 41 or 42% of people approve and high 40% of people disapprove.
Well, but the people who approve are the people paying the taxes, by and large, and the people who disapprove are the people receiving the unjust benefits.
But to factor that in would be to make the numbers entirely too clear for what most people actually want, in terms of clarity.
So anyway, I think it's an interesting development.
It is inevitable. And if, as I've talked about on this show before, when I interviewed an expert on the California budget, woes and crises, if...
Governments were forced to use private sector accounting standards to factor in their future liabilities for their retirement schemes.
At the moment, they're all expecting 8% return, which is completely unfeasible.
Even in good times, that's pretty unfeasible.
In bad times, it's ridiculously unfeasible.
And so if you put in more reasonable rates of returns, like 15-year Treasury bonds, for The amount of money the governments have versus what they have to pay out.
The shortfalls widen enormously.
So this has happened. People who fled to the public sector to escape the vagaries of the private sector are simply going to find out.
And it's tragic. It really is tragic.
And it is very sad.
But it is completely inevitable.
They are going to find out that you can't hide in the government.
You can't hide from the disastrous system that we have at the moment in the government.
All that happens is you turn from the anonymous vagaries of the free market to the personal and volatile vagaries of the political market.
Are the Republicans entirely interested in balancing the budget?
Well, of course not.
Of course not.
Otherwise, they'd be cutting back on military spending and all that sort of stuff.
What they are interested in doing, of course, is since the majority of the funding for the Democratic Party comes from unions and particularly from public sector unions, the Republicans are simply trying to cut off the blood supply to the Democratic Party's financial coffers.
That's their major goal.
And it is funny to hear a bunch of Wisconsin lawmakers who fled a couple of weeks ago to Illinois to get away from this coming back and saying that that's This is a travesty against democracy.
It's like, well, you ran away. You didn't vote.
You didn't debate. And now you're saying that being outmaneuvered by the Republicans is a travesty of democracy.
Well, democracy is a travesty of justice.
And we will continue to see these scenes unfold.
It won't solve the problem in the long run because the state still exists.
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