Governor Walker has claimed since the beginning of his term that he’s not interested in reducing the power of private unions in Wisconsin; his only concern, he said, was with the budgetary impact that collective bargaining agreements with public unions had. Now there’s a video – raw footage from Brad Lichtenstein’s documentary to be entitled “As Goes Janesville” – that seems to prove that his true intention has always been to just start with public-sector unions as a first step towards weakening private-sector unions as well. As reported by JSOnline, where you can view the video for yourself-

In the video, [Beloit billionaire Diane] Hendricks told Walker she wanted to discuss “controversial” subjects away from reporters, asking him:

“Any chance we’ll ever get to be a completely red state and work on these unions -”

“Oh, yeah,” Walker broke in.

“- and become a right-to-work?” Hendricks continued. “What can we do to help you?”

“Well, we’re going to start in a couple weeks with our budget adjustment bill,” Walker said. “The first step is we’re going to deal with collective bargaining for all public employee unions, because you use divide and conquer.”

The entire conversation was not released Thursday with a video trailer of the documentary, but Journal Sentinel reporters were allowed to view the raw footage.

“So for us,” the governor continues, “the base we get for that is the fact that we’ve got – budgetarily we can’t afford not to. If we have collective bargaining agreements in place, there’s no way not only the state but local governments can balance things out. . . . That opens the door once we do that. That’s your bigger problem right there.”

…

Walker co-sponsored right-to-work legislation in 1993 as a freshman in the state Assembly, but as governor has consistently downplayed seeking any restrictions on private unions in public statements.

…

“This is another colossal bait and switch that goes directly to his honesty,” [Democratic gubernatorial candidate] Barrett said. “What he claims he is not in favor of publicly, to the person who has made the largest contribution in state history, he says exactly the opposite. You can’t trust him.”

Barrett has been hammering Walker on right-to-work legislation for weeks, frequently using the phrase “divide and conquer.” Barrett said he used that term because he believed that was Walker’s strategy, but did not know until Thursday that Walker himself had used it.

…

In the 2010 campaign, Walker won the support of Operating Engineers Local 139, a union that represents about 9,000 heavy equipment operators in Wisconsin. The union is not endorsing anyone in this year’s recall election.

Terry McGowan, the union’s business manager, said the union gave its 2010 endorsement only after getting assurances Walker would not pursue right-to-work legislation. The union backed Walker because of his support for road building done by the group’s members, McGowan said.

He said Thursday he was troubled by the footage of Walker with Hendricks, but that he was continuing to take Walker at his word given his public statements and conversations he has had with him. “You don’t hear him say, ‘Yes, I’m going to go after right-to-work legislation,’ ” McGowan said of the video. But he added that divide and conquer is a phrase that is anathema to those in the labor movement. “It means turning worker against worker,” he said.

…

Because Walker faces a recall, a quirk in state law allowed supporters such as Hendricks for a time to donate unlimited sums to the governor’s campaign for certain expenses. Last month, Hendricks contributed $500,000 to Walker, bringing her total donations to him to $519,100 and the donations by her and [her husband] Ken to all candidates to more than $1 million.

Of course, it’s really no surprise that Walker, like the rest of the GOP, is ultimately after all of organized labor. But it’s nice to catch a politician telling the truth, even if only to a billionaire donor.

By the way, I’m not dogmatic about the benefits of unionization. It’s an empirical question whether workers are economically better off with or without unions, and I’ve seen apparently strong, statistical arguments on both sides. At the very least, it seems that if unions are to be economically relevant in the future, they need to focus on training and re-training, partnering with new technology rather than hedging against it.

Quite apart from the economic question, there is the dignity issue: the right of workers to organize for the purpose of negotiating with their managers seems as important to a free society as the right of citizens to peaceably assemble or petition their government for redress of grievances. Not everyone can be an entrepreneur or a professional. Especially in jobs where workers are easily replaced, it seems that only well-run unions can insure that workers have a meaningful voice in the enterprises to which they devote their lives.

In his recent political ads, Governor Walker has been proudly trumpeting the fact that there has been a fall in the unemployment rate over the last year, from 7.6% to 6.8%. Unfortunately for Wisconsin (and for the Governor, if the Democrats are smart enough to counter his positive spin with ads of their own), there are more ways to account for this decline than by a growth in the number of jobs: it could result merely from a shrinkage of the number of people looking for work, or from thousands of unemployed people leaving Wisconsin to look for work elsewhere.

The full story won’t be known for a while, but a further statistic found in the latest Bureau of Labor Statistics report indicates that Wisconsin was the only state to actually lose a statistically significant number of jobs over the last year. To keep his promise to add 250,000 new jobs in four years, the Governor now has add 273,900 jobs in three years. That is, if he has three years left on the job, rather than six weeks. As JSOnline summarizes-

Wisconsin is the only state that had “statistically significant” job losses over the most recent 12-month period, according to the U.S. Bureau of Labor Statistics. From March 2011 to March 2012, Wisconsin lost 23,900 jobs. That was the largest decrease in percentage terms in the country. Those job losses came from both the public and private sector, but the public sector job losses (17,800) were larger than the private-sector job losses (6,100).

At the same time, Wisconsin was one of 18 states that had a statistically significant drop in the unemployment rate during the same period, from 7.6% to 6.8%. Wisconsin has experienced both job declines and a drop in unemployment at various times over the past year. The two indicators come from different surveys, and the decline in the unemployment rate has also reflected a decline in the number of people looking for work.

If you’re the kind who’s able to read a BLS report without falling asleep, or if you can’t quite manage that but you need to fall asleep anyway, you can find the original report here.

As reported by the Oshkosh Northwestern, the political news this week in Wisconsin has been bad. First, instead of focusing on jobs and the economy, the Republican-controlled legislature has been concentrating on such critical issues as the rules of deer-hunting. Secondly, despite Governor Walker’s promise that cutting public employees’ salaries, taking away their collective bargaining rights, slashing public education, and providing tax giveaways to corporations would be good for jobs, the Wisconsin unemployment rate has increased from 7.4 to 7.9% since Walker was inaugurated. Thirdly, it seems that the latest round of budget cuts to the UW system were insufficient given upcoming budget shortfalls; the associated press reports that UW campuses will have to cut $46.1 million more this year and $19.6 million next year.

UPDATE: The four-year campuses are clearly being targeted; 2-year technical colleges are being excluded from the cuts. This, of course, is quite consistent with the anti-intellectual bent of conservative Republicans these days. According to a story in the Northwestern today (10/20)-

…UWO Chancellor Richard Wells said he was “bewildered” by the amount asked of universities. State agencies were asked to plan for a combined $174.3 million in cuts. The UW System was asked to plan on absorbing 38 percent of that number, according to figures released Friday by the Department of Administration. The UW System’s budget takes up 7 percent of the state’s general purpose revenue.

“It’s confusing. It’s disappointing. It causes dismay. We didn’t expect anything like this,” Wells said Wednesday. “It’s clear we’re the lowest priority in the state, which doesn’t make sense given we’re fundamental to economic development and recovery.”

Of course, the four year universities are fundamental to economic development and recovery only if you are hoping to attract professional, high-paying jobs to the area. But Republican Assembly Speaker Jeff Fitzgerald is admitting that their plan (which is basically to lower taxes for corporations and pray they will come to a state with an ever-diminishing public sector and a deteriorating infrastructure) is not so specific-

“What we’re trying to do is create a more positive business environment,” said Assembly Speaker Jeff Fitzgerald, R-Horicon. “No single piece of legislation is going to go out and create thousands of jobs.”

Fitzgerald, who is running for the U.S. Senate, said Wisconsin’s economic recovery has been slowed by the nation’s economic woes.

“We as elected officials, we can’t create the jobs,” he said. “The government can’t. That falls to the private sector.”

To borrow a Sarah Palin-ism, “How’s that attempt to create a more positive business environment workin’ out for ya?” [wink, smirk]

Of course, Republicans will likely blame President Obama for the failure of their own policies. But the Republican-controlled Congress has blocked nearly every policy initiative Obama has suggested, so that excuse won’t cut it.

Politics at both the state and federal levels have become absolute nightmares. Let’s hope we all wake up soon.

According to Politifact, the candidates’ statements at yesterday’s Tea Party/CNN sponsored Republican Presidential debate contained a surprising number of inaccuracies (even given the low expectations most people have of such events). But perhaps the most egregious, in my view, is Rick Perry’s claim that Social Security is a “Ponzi scheme”. Politifact rates this claim as simply false. Here’s why-

So how valid is the comparison?

Mitchell Zuckoff, a Boston University journalism professor who has written a book on Ponzi, noted three critical dissimilarities between Social Security and a Ponzi scheme, which by definition is both fraudulent and unsustainable.

“First, in the case of Social Security, no one is being misled,” Zuckoff wrote in a January 2009 article in Fortune. “…Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns.”

Second, he wrote, “A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted. That’s when the last people to participate are out of luck; the music stops and there’s nowhere to sit. It’s true that Social Security faces a huge burden — and a significant, long-term financing problem — in light of retiring Baby Boomers. … But Social Security can be, and has been, tweaked and modified to reflect changes in the size of the taxpaying workforce and the number of beneficiaries. It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing.”

Third, Zuckoff wrote, “Social Security is morally the polar opposite of a Ponzi scheme… At the height of the Great Depression, our society (see “Social”) resolved to create a safety net (see “Security”) in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones. That might rankle, but it’s not fraud… None of this is to suggest that Social Security is a perfect system or that there aren’t sizeable problems facing the incoming administration and Congress. But it’s not a Ponzi scheme. And Ponzi himself, who died in a hospital charity ward with only enough money for his burial, would never have recognized it as his own.”

We agree with Zuckoff’s interpretation. We rated Perry’s November 2010 comparison of Social Security and Ponzi schemes False, and we stand by that ruling. The comparison still deserves a rating of False.

Putting aside the Ponzi scheme charge, the fact that Social Security could be saved in perpetuity simply by raising the cap on the amount of wages subject to the payroll tax (currently set at $106,800), along with a modest, phased in increase of a year or two in the age at which one can receive full benefits, puts the lie to the often-heard claim that young people should not believe that benefits will be available to them. The simple truth is that such an outcome is likely to occur only if young people come to believe the claim and act to end the program, making it a self-fulfilling prophecy.

There may be principled grounds on which to be against Social Security, but basing opposition to the program on the fantasy that it cannot be saved is not one of them.

A few days ago, I bought a cute little recharging dock for my iPhone. It cost $29.00; the shipping came to $4.00. Here’s an image of it-

A few hours after completing the transaction, I received an email from Apple telling me that my dock was on its way, along with a tracking number. Out of curiosity, I clicked on the number and discovered that the unit had been placed on a flight out of a little town near Hong Kong, and that I would have it in a few days.

This got me thinking about the global economy. You’d think that it would be worthwhile for Apple to locate a factory in, say, Tennessee, and make such relatively low-tech doodads there. After all, they clearly don’t require a lot of labor to produce. At the very least, you’d think it would be worthwhile to stockpile a few thousand of these things in a warehouse at some central location – maybe Topeka, KS – and ship them to U.S. customers out of there. But no, it turns out that it’s cheaper to make these things in China and ship them to lone customers such as myself literally halfway around the world.

Wasn’t it Groucho who said that “If capital is international, so must be labor”? Or was it that other Marx brother?

I’ve been calculating just how big a hit my paycheck is about to take thanks to Governor Walker’s decision to balance the Wisconsin State budget largely on the backs of public workers (including teachers and university professors), the poor (via medicaid and “badgercare” cuts), and school children (who will undoubtedly see the quality of their educations diminish). As it turns out, I’m going to be taking home significantly less, especially for the next couple of months when the cuts are combined with so-called “furlough days” (days off without pay, but not days off from teaching; a sort of catch-22 that renders them simple pay cuts for educators). The bottom line is that I think I’ll be netting around 10% less. I’ll update that figure once I see the actual damages.

Like most citizens, I’m willing to make financial sacrifices for the common good. But in the last few days I’ve heard a couple of statements suggesting that balancing the budget entirely on the backs of people like me (and those significantly less well-off) might not be, well, the fairest policy in the world. They are the following:

(1) In 2007, “the top 1 percent of all income earners in the United States made 23.5 percent of all income,” which is “more than the entire bottom 50 percent.” (Vermont Senator Bernie Sanders in a Senate floor speech on Tuesday, November 30th, 2010).

(2) “Just 400 Americans — 400 — have more wealth than half of all Americans combined.” (Michael Moore in a speech to protesters in Madison, Wisconsin, on Saturday, March 5th, 2011)

Being skeptical by nature, and being fully aware that both Sanders and Moore are piñatas for the right wing pundits, I wanted to make sure that these statements were accurate before further publicizing them here. The most reliable site I’ve found on the web for vetting statements like these is Politifact. And, according to Politifact, both (1) and (2) are, indeed, TRUE.

I don’t know how many of those fortunate few live in Wisconsin, although my guess is that at least a few of the 1% of highest income earners do. Maybe… just maybe… they could afford to be taxed at a slightly higher rate than the one they’ve been suffering under while accumulating their huge fortunes, and thereby take some of the pressure off of folks like teachers, garbage collectors and janitors…

Two quick ideas for Larry’s World (not a utopia – just a world with fewer problems than this one). The first, I take it, is uncontroversial. I hope those of you who actually know something about economics – as I don’t – will tell me why the second is impossible:

1) In cold climates (like Wisconsin), plexiglass-enclosed bike paths, heated by the sun (mostly passively), with side panels that open in the warmer months.

2) As unemployment becomes structurally permanent (due to productivity gains and automation), simply pay people to consume. It’s nearly a full-time job to shop properly anyway. Citizens could earn bachelor degrees in Optimal Consumption (a new branch of economics). Those who are more productive can still earn more than ordinary consumers, but the structurally unemployed and terminally downsized are actively spending money on producers’ products, instead of fuming with resentment at home. As revenues rise from higher profits, it gets fed back into the system by way of this new class of professional consumers. (Debit cards that draw directly from treasury funds are used instead of cash to prevent professional consumers from saving their salaries; producers, on the other hand, are welcome to save and/or invest their surplus profits. This is still a capitalist society, and the ability of producers to get rich should serve as an adequate incentive to move up to the producer class for those capable of doing so).