I generally avoid political posts on my finance blog. But, the recall election in Wisconsin offers such dramatic implications for the future of our nation, it deserves some objective analysis. Being a registered Independent voter, I intend to do just that. If you are looking for political spin, try the TV news.
It’s all about the Budget Deficits
I have posted consistently about the unsustainable budget deficits and the underfunded public pensions. As I predicted two years ago, this issue is finally coming to a head, because it is starting to burden states and bankrupt municipalities. The State of California alone has a $16 billion deficit and dozens of cities and counties are in or facing bankruptcy. Cities as large as San Diego, San Jose, New York and Washington DC have rapidly growing deficits that must be addressed.
Voters in the cities of San Diego and San Jose, CA both passed initiatives in Tuesday’s election to curb pension costs and they won with very high majorities. Voters have come to realize the escalating costs (and abuses) of public pensions threaten their city’s solvency and public services. The reforms were fair to and respectful of public workers, while making fiscal sense to the cities. This is why they likely passed by such a high percentage.
Changes in Wisconsin
One thing that has really surprised me about Wisconsin in the past year is how quickly public employees have abandoned public unions. Since union dues are no longer automatically withheld from their paychecks, almost half of the public employees have chosen to leave the union. The looming budget deficit has disappeared and administrators have more flexibility to run their school districts.
- Wisconsin’s projected $3.6 billion budget deficit is now a surplus
- Wisconsin membership in AFSCME dropped from 63,577 to 34,942
- Almost 38% of union households voted against recalling Gov. Walker
Right to Work
Having worked almost five years in a union job, I understand all about the dynamics and politics of unions. Although I loved the union wages and benefits, I didn’t necessarily like the union. In fact, I hated it. They caused a lot of friction between employees and the company. They created a lot of lucrative perks for themselves from member’s dues. It made me wonder why I was forced to join a union.
- Should employees be forced to join a union and pay dues to hold a job?
- Should they be forced to contribute to candidates they don’t support?
- Should the Government automatically deduct employee’s union dues?
- Should unions force employees into holding public votes (Card Check)?
Leaders & Followers
What happened to political courage? Who will take on tough issues and do what’s right for voters? In my opinion, most elected officials have questionable ethics and shifting loyalties. Politicians are transfixed on polls and paralyzed by special interests. There are very few in office who have any real courage. President Obama’s no-show in Wisconsin demonstrates that courage and loyalty are in short supply. This is a state that elected him by a wide margin a few short years ago. This is a state he needs to carry in the next election. He can’t afford to be tainted by this loss, so he abandoned the union machine that supported him, in their hour of need.
When you look beneath the raucous protests, the bitter personal attacks and the partisan political bickering, Wisconsin is just a microcosm of what is wrong with our two-party political system. The Republicans and Democrats are locked in a life and death struggle for dominance, while the economy and taxpayers become the casualty. There is never any though of sensible compromise or consideration for others with differing beliefs.
I would love to see a viable third party break the partisan stalemate and eliminate the duopoly on our political process. The level of discontent is growing among voters. They are ready for real hope and change. We only need more leaders with courage to step forward and make it happen.
The Bottom Line
The bottom line is that politicians now represent lobbyists and special interests, instead of voters. Political parties are the gatekeepers to power, distributors of donations and facilitators of corruption. Governor Scott Walker did what he promised for the voters of Wisconsin, while facing a vicious backlash from an entrenched special interest. I commend him on his fortitude.
“We need leaders of courage.”
Scott Walker – Governor of Wisconsin
Barbara Friedberg – How to Invest and Get Rich (Slowly)
Balance Junkie – Is Financial Planning an Art or a Science
Online AI Blog – Financial Advice that’s Absolutely, Positively Guaranteed
This post was featured on the Carnival of Personal Finance over at Nerd Wallet. This week my post won the coveted Editor’s Choice. If you aren’t familiar with the Carnival of Personal Finance, you need to check it out. It’s the best place on the web to get your financial advice.