Wednesday, June 06, 2012

1-2- . . 3?

The revolution is here. Red is the color of revolution, and through a quirky series of steps, the media chose to color Republicans red and Democrats blue. Odd, because red and revolution are historically associated with the left.

But no longer so odd. Democrats are the party of status quo and Republicans the party of change. Revolution. Red. Republican. Blue. Status quo. Democrats.

In February of last year, we pointed to Wisconsin Governor Scott Walker’s direct attack on public sector union power as the revolution's opening salvo.  Madison began the struggle to re-balance our economy away from government power toward private sector control. Now, after 16 months, Walker has prevailed against the union counterattacks. It’s the second of what could be three consecutive June blows to President Obama’s re-election chances. The first was last week’s terrible jobs report, coupled to other bad economic news.

Yesterday, Walker became America’s first ever governor to survive a recall election. Wisconsin’s public sector unions, and their allies throughout the nation, mounted three waves of election efforts to reverse Walker’s assault on their power. They first tried and failed to replace a Republican justice on Wisconsin’s supreme court, one who later voted with the 4-3 majority to uphold Walker’s restrictions on the public sector unions. Next, they failed to recall enough Republican senators last year to change the Wisconsin senate balance of power. Now, they have failed to recall Walker, his lieutenant governor, and three other Republican senators, though they did successfully recall a fourth.  Walker has prevailed;  the revolution to check entitlement government is underway.

The third June blow to Obama’s reelection chances will come if the U.S. Supreme Court declares unconstitutional all or part of Obamacare. After all, Obamacare is constitutional lawyer Obama’s signature accomplishment.

Back to revolution. According to James Piereson of the conservative Manhattan Institute, America is headed for its “fourth revolution.” The new revolution follows Thomas Jefferson’s “revolution of 1800,” the Civil War, and Franklin Roosevelt’s New Deal. Each revolution began with a crisis—the Alien and Sedition Act’s attempt to stifle political opposition led to the “revolution of 1800,” while slavery and economic collapse triggered the next two—and each revolution reshaped U.S. politics for decades.

Piereson calls today’s status quo forces “rent-seeking groups,” or those “concerned with the distribution of resources rather than with the creation of wealth.” But The Concise Encyclopedia of Economics says the term “rent seeking,” which comes from 19th century economist David Ricardo, is confusing, and should be called “privilege seeking" instead, “getting a subsidy. . . for being in a particular class of people.”

To me, that’s “entitlement seeking,” for the groups gaming the political system believe they are “entitled” to redistributed wealth. At base, though, we are talking about groups that would “re-cut the pie” rather than “grow the pie”—Democrats, liberals, seekers of fairness and justice as opposed to Republicans/conservatives focused on economic growth.

Here’s Piereson on today’s “rent-seekers,” relabeled below as “pie cutters:”
The regime of public spending has at last drawn so many groups into the public arena in search of public dollars that it has paralyzed the political process and driven governments to the edge of bankruptcy. These groups are widely varied: trade associations, educational lobbies, public employee unions, government contractors, ideological and advocacy organizations, health-care providers, hospital associations that earn revenues from Medicare and Medicaid programs, and the like.    .    . They consume rather than create wealth. These groups are highly influential in the political process because they are willing to invest large sums in lobbying and election campaigns in order to protect their sources of income. [Pie cutters] have congregated within the Democratic Party. . . one might describe the Democratic Party as a coalition of [pie cutters].
[Pie-cutting] coalitions have little interest in moderating their demands in the interests of the broader economy because, as their leaders reason, the economy will be little affected by the small share of it to which they are laying claim. In addition, they calculate that if they do not take the money, then someone else will—and so they are not inclined to be “fools” for the public interest.
As Ronald Reagan said at his first inaugural (1981), “government is the problem.” It will be until Republicans rebalance economic power toward the private sector.

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