By Matt Stoller, a fellow at the Roosevelt Institute. You can follow him on Twitter at http://www.twitter.com/matthewstoller.
The big story on Tuesday was Wisconsin Governor Scott Walker’s win over unions and liberals, as voters ratified his attacks on public workers, the young, and women’s rights. But that vote was relatively close. Two other voter initiatives, in deep blue California, were not. San Diego and San Jose residents voted overwhelmingly to cut the pensions of city workers. In San Diego, the measure passed with two thirds of the vote, and in San Jose, the measure passed with seventy percent of the vote.
The measure gives city workers an option: They can keep their current pension, as long as they agree to contribute more of their salaries — up to 16 percent — to the pension fund, or they can enter a less generous pension plan with a higher retirement age, benefits that accrue more slowly and smaller cost-of-living adjustments. Future hires would be put into a plan that costs even less, and would be required to contribute up to half of its cost.
This is not a Republican initiative – the San Diego Mayor is a Democrat. And pension cuts like this are happening nationally, mostly with full support from voters in the Republican Party and a good chunk of the Democratic Party as well. The union representing city workers, of course, went to the courts rather than pursuing a strategy of engagement with the public. These unions will probably end up losing the fight, because they have no ability to persuade voters that they represent anything but a self-interested group of insiders.
The states and localities suffering from budget crises are having problems because Wall Street blew up the economy, and in many cases, ensnared these municipalities in extremely bad deals. The wealth of taxpayers was and is being transferred to banks. In 2008, the choice before Bush, and then Obama, was clear. They could hand taxpayer resources to Wall Street and oversee a series of budget crises in states and localities, with the opportunity for later privatization of public assets and the breaking of public sector unions. Or Bush, and then Obama, could crack down on Wall Street, and make sure that bailout monies went to states and localities, and, with record low interest rates, spur tremendous investment in new energy, infrastructure, and education initiatives. It was a choice. Bush picked Wall Street. Obama also picked Wall Street, with public sector unions supporting Obama like turkeys cheering on Thanksgiving.
Now voters are making their own choice. Once again, this is a direct consequence of how Barack Obama has led the Democratic Party and redefined liberalism, into a party and an ideology that is defined by wage cuts, foreclosures, debt, and acceptance of dramatic political and economic inequality. Voters don’t want to pay for a government and for government workers who they perceive as out of step with their interests.
These pension cuts and the victory of Scott Walker-like candidates are consistent with the overall trend of liberals losing or throwing in the towel nationally. For example, prominent progressive incumbent Congresswoman Lynn Woolsey, who chaired the progressive caucus in the House, just endorsed the establishment candidate in Northern California over the more outspoken anti-corporate candidate, Norman Solomon. Solomon is behind by a little over a thousand votes, with tens of thousands remaining to be counted. Meanwhile, New Mexico liberal Democrat Eric Griego, who ran ads demanding Wall Street bankers be sent to jail, lost his primary to a more moderate candidate. Sending bankers to jail is a popular position, so why didn’t Griego’s message work? It’s simple. Voters don’t trust any Democrat to credibly deliver on that or really any promise on economic justice. Obama has designed the party’s policy framework specifically in opposition to economic justice. In that case, why not vote for the Republicans? It’s a more consistent brand.