Wisconsin Union Battle: A Convenient Distraction From the Real Culprit in State Budget Woes

It is a tribute to the messaging skills of the American corpocracy that a phony budget crisis in Wisconsin has been used to scapegoat unions. This row serves as a very convenient way to shift attention from the real cause of fiscal stress in states that have serious budget gaps (yes, there are a very few states like New Jersey that have gaping pension shortfalls, thanks to years of government use of wildly optimistic return assumptions as an excuse to underfund them, but contrary to the railing of Chris Christie, his state’s problem is an outliers).

First, let’s debunk a couple of issues thrown out by Wisconsin governor Walker’s camp before turning to the real culprit in state budget’s supposed tsuris. The state budget is not in any kind of real peril. The Wisconsin Legislative Fiscal Bureau estimated that the state would end fiscal year 2011 with a gross positive balance of $121. 4 million and a net balance (after mandated reserves) of $56.4 million. Walker asserts there is actually a $137 million deficit. But where did that change come from? Lee Sheppard of Forbes estimated that Walker’s tax cuts for businesses would cost at the bare minimum $100 million over the state’s biennial budget cycle. Other sources put a firmer stake in the ground and estimate the costs at at $140 million. Viola! Being nice to your best buddies means you need to go after someone else.

The second major canard is that Wisconsin state employees are overpaid. If any are, it sure isn’t the teachers, nurses, or white collar worker. Note this chart for Wisconsin workers by Menzie Chinn at Econbrowser (hat tip Mike Konczal) is of data on total compensation, meaning it includes benefits such as pensions and health care. And as Chinn notes in comments to the post, the disparity in the 1990s and last decade would have been more skewed in favor of private sector workers:

Screen shot 2011-02-20 at 3.19.24 AM

The one group in which public sector workers are modestly more highly paid is non-high-school graduates, which one assumes include sanitation workers and janitors. Even then, the premium is not large.

Now that we have dispatched Wisconsin, why is is proving to be such a fertile ground for promoting urban legends, or at best partial truths? Even in states where budget stresses are real and acute, the two real causes are getting virtually no attention.

The first is that the collapse in tax receipts was the result of the global financial crisis. That’s the 800 pound gorilla in the room that everyone seems to ignore. But second, as a very good article by Richard Wolff in the Guardian stresses, is that corporations no longer pay their fair share of total taxes (emphasis his):

During the Great Depression, federal income tax receipts from individuals and corporations were roughly equal. During the second world war, income tax receipts from corporations were 50% greater than from individuals. The national crises of depression and war produced successful popular demands for corporations to contribute significant portions of federal tax revenues.

US corporations resented that arrangement, and after the war, they changed it. Corporate profits financed politicians’ campaigns and lobbies to make sure that income tax receipts from individuals rose faster than those from corporations and that tax cuts were larger for corporations than for individuals. By the 1980s, individual income taxes regularly yielded four times more than taxes on corporations’ profits…

Corporations repeated at the state and local levels what they accomplished federally. According to the US Census Bureau, corporations paid taxes on their profits to states and localities totalling $24.7bn in 1988, while individuals then paid income taxes of $90bn. However, by 2009, while corporate tax payments had roughly doubled (to $49.1bn), individual income taxes had more than tripled (to $290bn).

Now it should be no surprise that Walker is trying to push this sorry trend even further. The Koch Industries PAS was the second biggest donors to his gubernatorial campaign. It also gave $1 million to the Republican Governors Association, which then spent $65,000 through other channels to support Walker.

In England, the severity of cuts resulting from national austerity measures has led to a pushback against similarly low tax rates paid by corporations (see this article, “The conspiracy against the public” by Tax Research UK to get a sense of the discourse across the pond). The UK Uncut movement is at the forefront of this effort to end tax dodges by multinational corporations and rich individuals. It might be time for all of us to throw our weight behind its younger sister, US Uncut.

Print Friendly, PDF & Email


  1. bob

    I need to get much more creative with my household bookeeping. Instead of paying my prostitutes cash, I should ask for a receipt and then deduct that from my income taxes, calling it a cost of doing business.

    We just need to learn from out corporate overlords.

  2. Doc Holiday

    The core reason behind all the revenue shortfalls (related to this current mess) goes back just a few years to the Bush Era of non-accountability and the resulting systemic global crash provided for us all by wall street and all the intermingled on-going corruption interwoven into the wildly profitable game of politics.

    The Bush Era of non-accountability that climaxed in the destruction of America, is without a doubt connected to the excess stupidity by unions on one hand — on the other hand, there is little doubt that almost every corporation out there got sucked-into and spun into the spectrum-wide economic chaos that still is spinning out of control — but the trigger for the majority of this storm is the Bush Ownership Society Boom, that went Bust!

    Here is an old Wisconsin link as a reference point for union and government stupidity in Wisconsin:

    Crazy CheeseHeads Sliced The Pie Into Too Many Pieces

    Report Says Deficit Will Be $5.4 Billion

    Updated: 7:22 am CST November 21, 2008

    ==> The popping of the Ownership Society Derivative Bubble was the result of excess stupidity at almost every level within our society — and now it’s time to pay a real price (versus using derivatives). Wisconsin obviously was as stupid as about 49 other states– all of which have run-away accountability and accounting shenanigan fever — and lots of over-paid stupid people making really shitty (and corrupt) choices about the future of their citizens.

    The sad part in all this current mania, is that the teachers who are targeted for cuts are willing to negotiate (apparently) and that most all people (around the globe) realize that budgets will be seriously trimmed back — and that a lot of people will continue to feel more and more pain in this Great Depression ll. Be that as it is, along comes the nazi-like teaparty to start a fight with the retarded unions, who are always blind and greedy ….. and now, we end up with this amazingly stupid cat fight where everyone ends up being pulled into a civil war-like circus, where people are all rightfully pissed off — and why are they really pissed off (again)? Are some people still in denial about the massive amount of destruction that occurred in America because of Bush and the black hole he opened with all the lobby groups that took trillions of our $$$$$?

    Does anyone not see that wall street and all the lobby groups destroyed America??? It wasn’t the teachers in Wisconsin that want collective bargaining rights … and PLEASE — gimmie a F’ing break, add up the bonuses on wall street for the last decade and compare that vast sum to the entire pension program for every citizen in Wisconsin (probably the mid-west and beyond). Wall street took away the entire American Dream and now they want more and more and more … if yah want a F’ing fight, don’t get pissed off at a bunch of teachers or cops that make $35,000 — get pissed at crooks that ripped off $35 Trillion!

    1. bob

      I don’t know about no banks, all I noed is that the smarty “libral elitest” next door has a new car.

    2. DownSouth

      Doc Holiday said: “Are some people still in denial about the massive amount of destruction that occurred in America because of Bush and the black hole he opened with all the lobby groups that took trillions of our $$$$$?”

      The black hole Bush opened?

      I like what Paul Street had to say about the bipartisan nature of our predicament in this video:

      I wanted Obama to be elected in 2008 for what might strike people as a curious reason… I thought it was essential for American citizens and particularly millennials…19 to 20 year-olds…who really needed a direct experience of the bipartisan nature of the corporate and imperial system of the fake democracy that exists in the United States of America. They needed to have lived the experience… Think about it, kids in their 20s, what is their cognizant experience with all this miserable crap that’s been going on? It’s been Bush, George W. Bush. It was essential for there to be a party change, a brand change, a shift over.

      Street goes on to talk about how Obama is every bit as big of a neo-liberal and neo-imperialist, and certainly a more effective one, than Bush was.

      1. LeeAnne

        Its confirmed that Obama’s really a Republican. He’s taken a ski vacation in Vail; ski home of conservative politicians. Like Disney World, Vail is a faux corporate created Swiss village. Liberals ski in Aspen.

        1. skippy

          The land of oil sheiks and billionaires…cough Aspen…vs. Calif-rolls/CU brats sprinkled with South West R-polies…cough Vail…lololololol…Beaver creek I must admit is *Disney Land* as they own a big slice of it, comp thingy. But hay you still have all the other peaks in summit, Brekki, mary jane, copper and my grundgy fav A-Basin, try the East Wall (near vert w/death cookies at the bottom) or that bump run that’s always trying to kill me ( Plavacini[?] my bad for wearing big GS skis).

          Skippy…decorum lass, no serious stuff on the slopes, lest its got fir on it.

          PS…Texans and chair lifts…good times, ah the good times.

      2. Pixy Dust

        Pixy agrees mostly with Paul Street because Pixy remembers FDR economy.
        Pixy disagrees because Obama does not know FDR economy. Too young.

    3. Pixy Dust

      a) Bush Era of non-accountability ≠ excess stupidity by unions

      b) excess stupidity by unions < Bush Era of non-accountability


      a + b = c

      c) = corruption

    4. Jerry

      The REALLY sad part is not even being discussed or covered.In the bill in Wisconsin, Scott Walker has put a former federal Medicaid official, who called for states to drop out of Medicaid,in charge of Wisconsin Medicaid. People do not realize that Medicaid covers people with disabilities and saves money by having these individuals live and work in the community rather than vegetate in large state instutions where the costs are similar per day to nursing homes. Like the removal of union representation, those on Medicaid will have no voice as the proposed changes move decision making from the State Legislature to the Medicaid Department alone. I know most of you may not have sympathy for this yet, but remember we all either have or will have a family member who becomes disabled based upon statistics. They too need a voice!!!

  3. Stand With Walker

    That’s actually funny as hell that there is a Google ad for Walker; how nice to be able to call that shithead a nazi-like retard and then have an opportunity to support him by clicking a banner ad … where is the teaparty ad or the opposition banner?. I guess the unions are either too poor or stupid to counter … oh well. Great stuff! Thanks google!

  4. Knighttwice

    Yves, as an admirer and regular reader I must say that I am disappointed in your coverage of WI. It does not matter where Gov. Walker got his campaign contributions. Were they legal? Unions legally contribute to Dems and, while I don’t care for this practice, it is legal. My choice as a citizens is to fight to change the law if I am so inclined.

    I agree that the states’ budget strains are a direct result of the banks blowing up the world. Your coverage of their malfeasance has been stellar. Nonetheless, the vulnerability of the states’ budgets would have been exposed by any garden variety economic slowdown eventually. It is just as well that we deal with the unsustainable benefits sooner rather than later.

    Last, my admiration for your coverage of the mortgage mess stems largely from its devotion to the “rule of law”. Yet there is no mention of the law in your posts in support of the WI unions. Teachers walk off the job, illegally shut down schools, have MDs in the crowd issuing fraudulent “sick notes” so the teachers can stay at the protest. Worse, Dem state senators intentionally depart for IL in order to prevent a quorum.

    Look, I was not happy when Pelosi and Reid subverted the democratic process to jam through Obamacare. But that is our system. My recourse is to elect (and send money to if I feel so inclined) politicians who will vote the other way. Same is true in WI. Gov. Walker and the Rep senators won fair and square. They are entitled to govern until the next election. Oppose them with all your energy and might, but always require that the opposition stay within the law.

    1. bob

      Rule of law-

      Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

      Read that last part again.

      1. Erik

        You’re right Bob, they have the right to assembly, but the government also has the right to fire each and every one of them for the simple fact that they abandoned their jobs. And the doctors who wrote those notes should all have their licenses suspended. If they wrote me a note and I got caught by my private employer, I would be fired and the doctor could lose his/her license. If the law applies equally to everyone, then please explain why someone working in the public sector has more rights than someone working in the private sector? Why are public unions more special than the rest of us? Who is looking out for the taxpayers that have been funding this all along? The politicians sure are not! Both parties get political contributions from unions and then agree to contracts that are not in favor of the people.

        Collective bargaining for public unions creates a direct conflict of interest for the politicians. They are supposed to be accountable to the voters, but then the union intimidates the voters and bribe the politicians. In the mean time the state is borrowing more and more money and can’t possibly pay it back. Sadly, the poor kids that the teachers are claiming to help are the ones who will suffer in the end when the public unions get their way. They will suffer higher taxes and less opportunity because we are pushing industries overseas.

        1. DownSouth

          Erik said:

          Who is looking out for the taxpayers that have been funding this all along? The politicians sure are not! Both parties get political contributions from unions and then agree to contracts that are not in favor of the people.

          This statement carries us deep into the abyss of the right-wing netherworld. In this strange world, where logic gets turned on its head, the big corporations that bankrolled Walker are somehow “looking out for the taxpayers.” The big corporations are the only champions of the people against those ruthless and all-powerful public sector workers.

        2. bob

          “You’re right Bob, they have the right to assembly, but the government also has the right to fire each and every one of them for the simple fact that they abandoned their jobs. And the doctors who wrote those notes should all have their licenses suspended”

          Hail Caesar. He has spoken, it shall be made so.

          Another libertarian with a deep down urge for the chance to be a despot.

        3. mrc

          How can you judge people who have devoted their lives to public service based on what they did for three days last week? Nice try, though. Can’t wait for the General Strike, and being called a lazy bum!

    2. Yves Smith Post author


      If you think private sector workers don’t use sick days for personal business, I have a bridge I’d like to sell you.

      And the teachers appear to plan to add the days missed due to school closures to their calendars at the end of the year.

      1. Knighttwice

        This particular private sector worker is required to count any sick days against the allocations of vacation and personal days for the year. Plus, saying private sector workers use sick days for personal business does not make the practice right or ethical.

        And to Bob’s reply above, I never said the workers had no right to assemble and protest. That would be idiotic. But notice that the issue of fraudulent doctor’s notes or the legislators bugging out was not addressed.

        It’s not easily to lose one’s agenda at the polls. I live in a deep blue state and know the feeling all too well. But the people of WI spoke last November and the democratic process will play out. If the unions can sway popular opinion for the next election then they can move the agenda back in their direction.

        Last, Yves, local newspapers have debunked the “surplus” propaganda. I am surprised you selectively cited that report without discussing the other analyses. The newspapers (not sure of their ideological bent) should know the budget calculations far better than me and they report that the 2-yr shortfall is either $2.2B or $3.3B.

        1. DownSouth

          Knighttwice said: “But the people of WI spoke last November and the democratic process will play out.”

          In response to this I’d cite the same video by Paul Street that I cited above:

          My main issue has always been people’s willingness to accept the dominant definition of politics. It’s been all about a quadrennial mass marketed corporate crafted big money big media narrow spectrum candidate centered electoral extravaganzas that the masters stage for us every two, four and eight years and telling us that’s politics, that’s the only politics that matters… We really need to…focus on building a politics beneath and beyond the election cycle and rebuild social movements in this country and start thinking about changing the game of politics in general like they do in Europe, quite frankly, from the bottom up, with regular mass protests and social movement activity every day.

          I’m not an anti-election person. Better Roosevelt than Herbert Hoover. Better anybody than George W. Bush, I think. But big deal. That takes about two minutes. The real thing is what do you do after those two minutes.

        2. DownSouth

          And Knighttwice, as to your claim that “And to Bob’s reply above, I never said the workers had no right to assemble and protest.”

          But that’s what a great deal of this brouhaha is all about. Walker wants to make it illegal for public employees to assemble and collectively advocate for their rights.

          1. Knighttwice

            Downsouth, puh-leeeez the bill does nothing of the sort. Read it. Collective bargaining remains, unions remain, benefits remain, but with restrictions and costs determined by the elected Legislature. Tell me why it should be any different? The case for collective bargaining by public sector unions was pilloried by none other than FDR. As a former Governor himself, he could see the conflict of interest and danger. Nonetheless, even the “radical” Gov. Walker still retains the unions’ right to bargain.

          2. DownSouth


            You say “Collective bargaining remains, unions remain, benefits remain, but with restrictions and costs determined by the elected Legislature.” And you believe there’s nothing unseemly about this?

            To which I respond: Read the First Amendment that bob cited again:

            Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

            What is it about “no law…abridging…the right of the people peaceably to assemble, and to petition the Government for a redress of grievances” that you do not understand?

          3. bob

            This is the plan-

            Pass a law, stripping unions of the right to collectively bargain. Claim victory. Watch as the law is challenged in court, at the expense of the tax payers. It might take a few years to work it’s way through the courts. What does that cost?

            Saving you money every step of the way.

          4. DownSouth


            Yep. And all the while Walker is playing Santa Clause to big corporations, handing out tax breaks and subsidies like there were no tomorrow.

          5. jeff in indy

            have to agree with knight. having served in the military and worked in state govt, i have never supported unionization of public servants. FDR was right.

            as to the politics of the situation, i recall all the R’s showing up and casting their NO vote for obamaocare, even though they had no voice in its design.

            payback’s a bitch, aint it…

        3. run75441


          When have you been required to provide a doctor’s note for an absence? In private business you need it to claim disability pay; but, otherwise you just take off and call in to me the manager.

          Kind of interested in hearing how Reid and Pelosi subverted the vote to pass Healthcare in the House and Senate. It wasn’t that long ago when the Repubs were cramming bills through the House and Senate.

          As Erwin Chemerinsky noted, there is no place in the constitution that allows for corporations to be granted the same status as citizens and individuals. Koch Indutries and PACs do not qualify as citizens. The same applies in all elections.

          If this is such a minimal issue for Wisconsin unions, than why even bother to ask for union wages to be decided by a legislture? There is more to it than just this Knight unless we are both looking through roe colored glasses? It is what it is, an inital attempt to bust the public workers union. Wisconsin is far more progressive than your blue state and felt public worker unions should have bargaining rights. While one poster noted the issue of all workers being given rights to earlier retirement, the issue in Wisconsin is not the public workers unions the same as it is not an unfriendly business environment. There are other root causes bringing us to today’s issue and it is no longer “Labor.” Whacking Labor went out of vogue in the sixties.

          To note: The union did offer to take cuts in benefits and Walker refused the offer. “Marty Beil, executive director of the Wisconsin Public Workers Union, sent a message to the Governor’s office agreeing to the cuts to pension & welfare benefits sought by Walker in his bill. The governor’s response was “nothing doing.” He wants the whole kit and kaboodle – the end of the collective bargaining rights of the public . . . “

          1. knighttwice

            Run, try to pay attention….

            I never claimed to need a doctor’s note for a sick absence in the private sector. I said that any sick day I took counted as “paid time off” and such days were deducted from my vacation day allocation.

            So now we are going to use Chermerinsky as the only Constitutional scholar worth citing? Please. I think Citizens United has determined that corporations are “persons”, just like labor unions.

            Pushing Obamacare through the Senate using budget reconciliation was not a “subversion” of the process? There were many Democrat senators who called it that. How about the “Louisiana purchase”, the give aways to Nebraska and Florida, and all the other special deals in the bill? I guess just normal. Sad.

            And again….you can repeat all you want that Walker is trying to “bust” the unions and “end collective bargaining”…but facts are stubborn. If the budget repair bill is passed, the unions WILL retain the rights to collectively bargain for wages. FACT.

            Funny how Yves and other commentators (justly) lambaste the banks for distorting the issues with spin and misinformation….but if labor does it they are not called out.

            WI had an election about these issues just 4 months ago. The voters overwhelmingly supported the Walker agenda — he did not hide what it was. Elections have consequences — at least that’s what Obama kept telling me……

          2. DownSouth

            The voters “overwhelmingly supported the Walker agenda”?

            52.25% of the vote in an election where less than 50% of the voting age population voted is “overwheming”?

            Talk about “distorting the issues with spin and misinformation.”

          3. run75441


            Understand your own conflation of the issue of absences. “You” do not have to supply a note from the doctor when absent, they need to supply one. “You” do have to supply a note from the doctor to go on disability.

            I was hoping for a legal citation from you other than the Citizens United ruling which was passed 5-4 with Kennedy writing the majority opinion . . . unfortunately coporations are not citizens which was the entire point. Stevens said it best:

            “At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.”

            Facts are a hard thing to accept Knight as Walker has conflated the issue of deficits with an attack on public workers implying they are the cause with their higher wages which are less than the provate sector (bring it on). They have a minimal impact upon the deficit the state is experiencing and anything short of a national economic recovery will not solve Wisconsin’s issues or other states as well. If it is not the impact of the Public Workers on Wisconsin’s deficit, than what is it Knight? Effectively speaking, Walker has negated the unions collective bargaining power with the passage of this bill:

            “strip public employees across the board — from teachers to snowplow drivers — of their right to collectively bargain for sick leave, vacation, even the hours they work.”

            and limit wage increases to inflation or a vote by the legislature to exceed inflation. What would you call this in total Knight? There virtually is nothing left but to gather and piss and moan. You read the bill and understand what is in it before you tell others to do so.

            Walker takes it a step further by not requiring membership. Walker’s efforts are an attack on public workers and in particular unions. Here is a cutey from Walker:

            “But absolutely nothing would change for local police, fire departments and the State Patrol.”

            They supported his election. I can cite other constitutional attorneys if you wish me to do so. I work with them and have many conversations with them. I am STILL interested in how Pelosi and Reid subverted the democratic process in passing healthcare reform. I am sure you will have another version for that process also.

        4. maude

          I am not sure why you think using sick days for personal business is unethical. It is when an employee lies about it because an employer doesn’t allow it that it is a problem.

      2. rd

        The last couple of companies I have worked for went to multi-use “paid time off.” That is three weeks per year for vacation, sickness, etc. that increases to 4 & 5 weeks after years of service with the company. These days accumulate over time with maximum amounts of accrual after which it becomes use it or lose it.

        My current company also provides for a week-per-year of additional sick leave that is very hard to get at but accumulates over time. It requires doctors notes etc. and is intended for significant illness or surgery, including that of family members. For planned events, like surgery or maternity leave, it’s use can be scheduled ahead of time with the company.

        As a result, it makes it difficult to game this system and the companies’ liabilities are managed. At the same time, I could be out of work for several months and still be covered by my readily accessible time that I save at a rate of more than a week a year and the other less accessabile time-off.

      3. run75441

        Hi Yves:

        Here is an EPI study dated February 10th which Menzie drew the graphs from in his article. It is much better in detail. http://epi.3cdn.net/9e237c56096a8e4904_rkm6b9hn1.pdf “Are Wisconsin Public Employees Over-Compensated?”

        To any one else attempting to make sense out of studies, reminder you can’t average averages and you have to go back to the source data. Looking at other regions and drawing conclusions as to the validity of a study on Wisconsin is a false comparison. What we can say about the study is that it “appears” and if the data is normal, Wisconsin Public Union workers are not over compensated.

        This LSS practitioner sees no issue with the study and the statistics cited. It points in a direction which people do not like and applies only to Wisconsin.

    3. DownSouth

      I love it when the right-wingers trot out “the law” in the defense of their immorality. It’s as predictable as the rain. As Reinhold Niebuhr wrote in Moral Man and Immoral Society, those struggling against social injustice “are placed in the category of enemies of public order, of criminals and inciters to violence and the neutral community is invariably arrayed against them.”

      Perhaps the most thoughtful rebuttal to have ever been given to these right-wing talking points was Martin Luther King’s Love, Law and Civil Disobedience.

      King reminds us that “We must never forget that everything that Hitler did in Germany was ‘legal.’ It was illegal to aid and comfort a Jew, in the days of Hitler’s Germany.”

      Then King goes on to explain what his criterion is—-not what is legal, but what is just:

      Now I think this is the part of the student movement that is probably misunderstood more than anything else. And it is a difficult aspect, because on the one hand the students would say, and I would say, and all the people who believe in civil rights would say: Obey the Supreme Court’s decision of 1954 and at the same time, we would disobey certain laws that exist on the statutes of the South today. This brings in the whole question of how can you be logically consistent when you advocate obeying some laws and disobeying other laws. Well, I think one would have to see the whole meaning of this movement at this point by seeing that the students recognize that there are two types of laws. There are just laws and there are unjust laws. And they would be the first to say obey the just laws, they would be the first to say that men and women have a moral obligation to obey just and right laws. And they would go on to say that we must see that there are unjust laws. Now the question comes into being, what is the difference, and who determines the difference, what is the difference between a just and an unjust law? Well, a just law is a law that squares with a moral law. It is a law that squares with that which is right, so that any law that uplifts human personality is a just law. Whereas that law which is out of harmony with the moral is a law which does not square with the moral law of the universe. It does not square with the law of God, so for that reason it is unjust, and any law that degrades the human personality is an unjust law.

      1. Walker Lobby is gay

        never forget that everything that Hitler did in Germany was ‘legal.

        Everything Bush did was also legal

          1. Pixy Dust

            Correction. He did not win the populous vote. The Supremes stopped the process and gave him the electoral vote.

          2. skippy

            all done whilst on an Enron private jet, remember those x-mas cards, see ya in da white house soon!, doh maybe after I get out of jail…. XOXOXOXOX

    4. Scott W

      Our family of 4 lived in Wisconsin for 10 years. In buying a home in the Green Bay area, we were not limited to the most expensive homes because all of the schools in town were very good. Snow removal was excellent, and I think in 6 years, our kids only missed three days because of cold or snow. The parks were plentiful, and well cared for. There was a vibrant middle class, often with one family member working at a Union job. Folks headed to their cabins up North during the Summer, and many owned boats. The health care system was excellent, and much cheaper than other parts of the Country.

      Now contrast that with North Carolina where I currently live. You must pay more for a home (and consequently property taxes) if you want your children educated in a good school district. Try saving money on a home, and the private school tuition is between $10,000-$20,000 a year. There is no snow removal, so my children missed more school days their first year in NC, than 5 years combined in Wisconsin. The State often bribes companies to relocate to NC, only to see them leave a few years later when another state offers even a better deal. Much of the State, barely provides the amenities offered in a developing Nation.

      You get what you pay for, and you also suffer the consequences of what you wish for in trying to lure companies to relocate to your state. Lower wages do not lead to a better standard of living. Everyone complains about paying taxes, but compare Wisconsin to North Carolina, a supposedly advanced Southern state. What you find are that in the best areas people pay the most taxes, while those that pay fewer taxes offer little to their residents. When Wisconsin turns into Alabama, Mississippi, Georgia, or Louisiana, the residents who scream about being taxed to death will finally understand that low taxation is really a scam on the middle class, while the upper class buys everything it needs in the way of education, health care, and many other amenities.

    5. Francois T

      Before you keep going on with this heavy insistence on the “rule of law”, please remember this fundamental equation:

      Law ≠ Morality

      IOW, how can one respect the rule of law when the one elected to uphold it lie, cheat and try to steal from a targeted group of people for strictly “political” reasons?

      As parents, we teach our kids between the age of 8 – 12 year old, the respect of the rule of law because it is the best expression of a collective effort to regulate our instincts, human weaknesses and the behaviors deriving for those.

      But then, we are supposed to go beyond this stage because, oh drama! turns out that life is much more complicated than that. Worse still, kids figure this out pretty fast. So, we’re stuck having to explain objection of conscience, the limits to the rule of law, Ghandi, Nelson Mandela, our Patriots…you know, these people who cam to realize that the rule of law can be a sweet excuse to break the fundamental tenets underlying said rule of law, a.k.a. justice and fairness.

      Of course, the above presuppose evolution beyond the 8-12 y/o stage of mental development, and/or, a sincere desire to go beyond mere partisanship.

      So, what is it gonna be?

    6. Greg

      Hey, what about CONTRACTS! The teachers and state are in the 2nd year of a 4 yr contract. You dont change the contract midstream (and then say they have no right to collectively bargain in the future) in this manner unless you are just bullying someone around, which we know is EXACTLY the modern American republicans M.O …. bully tactics.

      Walker is dead wrong on this

    7. sergio

      i don’t care at all about your politics,but when you stick your nose between doctors and their patient,you then are a hypocrite which makes your words worthless

  5. craazyman

    something looks wrong with that chart.

    public workers are paid conspicuously less than private workers for 7 or the 8 categories. they are paid more only in the “less than high school” category.

    Yet the summation of All categories in the yellow highlighted column on the far right shows public workers are paid MORE on average than private workers.

    That doesn’t seem intuitively correct — unless there’s an overwhelming majority of “Less than high school” workers among public and private workers. And that doesn’t make sense to me, anyway.

    At any rate, both private and public “less than high school” workers should be paid more than they are now, in my opinion. And banksters, prop traders, 3-card-monte-derivatives-quants, some securities lawyerz and other parasites should get 95% pay cuts. LOL.

    1. Yves Smith Post author

      The study is awfully detailed, so I’d hazard yes that there are a lot of non-high-school educated workers. Cafeteria cooks, maybe? The non-high-school educated workers are a big chunk, I think close to half the total (this is from recollection of reading the parts of the study, not checking it). There are probably very few with professional degrees or doctorates, so in terms of the overall averages you might as well throw those bars out, those two categories probably have no impact on the total.

      That conclusion has been given in all the summaries of the work, that college educated state workers are underpaid when adjusted for education, and the lesser educated ones are somewhat overpaid. I don’t know how firefighters and cops fit in (can they be non high school grads but hired based on an equivalence test?) or bus drivers…

      1. BS

        The study has a number of problems. For instance the “adjusted for education” idea is mostly a canard. In the education business, teachers are often required to get masters degrees. Teachers are often paid more along the way as they acquire their credit hours to encourage it.
        There is little basis to believe that most elementary school teachers need masters degrees to teach. I have heard this view espoused by a number of people in the education business. You don’t need a graduate degree to each first grade math. Perhaps by the time you get to teaching high school a graduate degree might be handy for math, physics etc.

        Secondly, I’ll guess that given the way the teachers are encouraged to get a graduate degree a disproportionate number of public workers with graduate degrees, have them in education. A master’s degree in education pays less than say a master degree in electrical engineering?

        From that point of view the chart would be better organized by type of work / profession.

        This is for federal workers…


        I also attempted to figure out if the study was adjusted for teachers being paid for 12 months of work and working 9 (more or less) instead of 12 as most people are.

        1. bob

          This “study” has been completely bashed before, correctly. It does not take into account the cost of living differences between parts of the country, and where in those parts federal workers are most likely to work.

          80k a year is a lot in OH, not so much for a phd in DC, or an MBA in NYC. Most federal workers are employees in high cost of living areas. There is not a huge federal footprint in IA, well beside the subsidies to corn farmers, but then they only need one person to write the welfare checks.

          And per that “study” (it’s not a study, it’s statistics done badly), $9,882 per worker in “benefits”. This is not something to aim for. I am self employed and pay well over 10k a year for health insurance alone.

          Where do you suppose that the difference is made up? Could it be the Walmart’s of the US that don’t pay for their employees healthcare, and dump them back on Medicare.

          They make so little “working” that they qualify for it. There are plenty of stories about Walmart and the like helping employees fill out applications for food stamps and Medicare.

          1. run75441


            And you have group coverage for insurance also . . . don’t you? The figure for bennies is probably correct in that it is an average more than likely. This is an EPI study and most recently done (February 10, 2011) so I doubt it has been bashed yet. As to Wisconsin workers? Here is what the EPI study concluded:

            “The earnings equation estimates indicate that state and
            local government employees in Wisconsin are not overpaid.
            Rather, local and state public employees are undercompensated. When we make comparisons controlling
            for education, experience, hours of work, organizational
            size, gender, race, ethnicity, citizenship, and disability,
            both state and local public employees earn lower wages
            and receive less in compensation (including all benefits)
            than comparable private sector employees.” http://epi.3cdn.net/9e237c56096a8e4904_rkm6b9hn1.pdf

            You chose your path and they chose theirs. The same as automotive workers taking bennies over wage increases 30-something years ago, public workers settled for less and enjoyed the safety of public service. If you are angry with the results? You gambled and you lost. Maybe we should look to the root causes of today’s issues rather than picking a scapegoat.

      2. kevin de bruxelles

        I have to agree with Craazyman, the summation of the statistics makes no sense. On Table 1 of the study it is shown that the category “less than high school” makes up only 1% of state employees, while these guys make up 4% of the private sector. This small number makes sense to me as from my experience, most “less than high school” people are in either in prison, selling drugs, working under the table, or on welfare. So it is clear that something else is skewing these numbers besides hoards of high school dropouts being employed by state government.

        From Table 1 it is seen that the majority of state workers fall in the Bachelor’s and Master’s categories. The Master’s is particularly interesting as only 5% of private sector workers have a Masters while 22% of public sector workers do.

        Of course breaking this down by degree implies that a Masters in Sociology or Public Administration is the equivalent to a Masters in Engineering or Mathematics but whatever.

        Perhaps the explanation for the strange final tally probably lies in the note that the numbers have been “adjusted for race, gender, and other variables in a conventional earning model”. Maybe they take into account the differences within a degree type here but the problem is I have no idea what this phrase means.

        1. Yves Smith Post author


          Um, I’ll wait for the engineers to pipe up, but I think you are dead wrong re the value of a masters in engineering v. a masters in sociology in the US. They’ve often bitched at how seriously underpaid engineers are unless they get a law degree (and I presume then do patent or other forms of intellectual property law). And the two PhD mathematician I know both taught in public schools. One graduated from Harvard in pure math, it’s one of the top programs in the world. He happens to have an altruistic streak and did it during and after completing his degree.

          So your assumptions about the caliber of person who chooses to teach shows quite a lot of bias.

      3. PeonInChief

        In many states both police and fire are expected to have college degrees. For police it’s often a degree in criminal justice, while fire personnel have somewhat broader choice (although I’d suspect that a degree in public administration wouldn’t hurt.

  6. hisgirlfriday

    I’m not being too cynical in assuming that if Gov. Scott Walker, R-Fox News, and Gov. John Kasich, R-Fox News, and Gov. Mitch Daniels, R-Fox News, successfully destroys the teachers unions in their states that we can expect Rupert Murdoch to be making a profit on new state contracts with Wireless Generation, the ed-tech company Murdoch bought RIGHT AFTER the Novemeber elections.


    “When it comes to K through 12 education, we see a $500 billion sector in the U.S. alone that is waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching,” said News Corporation Chairman and CEO, Rupert Murdoch. “Wireless Generation is at the forefront of individualized, technology-based learning that is poised to revolutionize public education for a new generation of students.”

    1. hisgirlfriday

      Just to add…

      Remember the last GOP attempt to “reform” education involved the Bush family directly profiting from No Child Left Behind from a company where Neil Bush partnered with News Corp.’s Bin Talal and good old Michael Milken (are you allowed to say his name without “junk bond king” in front of it?).

      “The $3,800 purple plug-and-play computer/projectors display lively videos and cartoons: the XYZ Affair of the late 1790s as operetta, the 1828 Tariff of Abominations as horror flick. The device plays songs that are supposed to aid the memorization of the 22 rivers of Texas or other facts that might crop up in state tests of “essential knowledge.”


      So not only are these douchebags getting our tax money, but they’re also getting to indoctrinate our kids that they should be horrified if the government takes any steps to promote American manufacturing at the expense of our ability to buy cheap foreign crap. Yay!

    2. Walker Lobby is gay

      That’s right, online programs will replace those teachers and students will go through the bag your own education line all by themselves. The self-checkout process also doesn’t need no stink’n pension plan or commie union!

  7. Extinct Species

    General comparisons of compensation by levels of education probably are not fair. Lots of different jobs that have similar educational requirements do (and almost certainly should) have different levels of compensation. Does a third grade teacher who gets a doctorate automatically get higher compensation? Or is it based on how good a teacher they are? (If I understand the chart correctly it looks like the public sector has a distribution skewed much more to the higher degrees relative to the private sector. Why would that be? Should it be?)

    Public sector workers have hurt perceptions of themselves by some of the stances they have taken and negotiated regarding their job requirements, grievance processes and compensation. This makes it much easier to paint their right to collective bargaining as a negative to the general population. The occasional instances of ridiculously high compensation packages feed this. They may be outliers but public sector workers should make it clear that they are as outraged by such things as the rest of the population and they should openly and loudly propose rules aimed at the prevention such abuses.

    I second US Uncut action. Public sector workers have significant economic clout. Pick some corporate buddies of Governor Walker and deal out some economic pain.

  8. Duncan

    “or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

    Read that last part again.” –

    They could have done that at the end of a school day, or on a weekend. I’ll concede that it wouldn’t be as “effective”, but if I were a taxpayer, paying for public education, I’m now not getting my monies worth because they “chose” not to teach for those days. Who’s footing the bill for daycare? Or, parents had to take a day off from their jobs for care, how is that right? Not exactly the era to take time off from work, especially if you’re an hourly wage worker and won’t get paid. Are the teachers still being paid for those days, oh that’s right, they were “sick”.

    “The study is awfully detailed” –

    Any study can be manipulated into one’s light of beliefs, while not discrediting the study, like any, I’ll be skeptical until I read it.

    “private sector workers don’t use sick days for personal business” –

    That’s a given, but in a State like mine, 40% of the private sector do not get “sick time” (abet low wages jobs), hence the attempt to pass (yet failed) “sick-day” Bills. Meanwhile, almost all public employees, regardless of level, enjoy this “benefit”.

    1. Yves Smith Post author

      You have not even read the study and you offer only ungrounded general broadsides. We are supposed to take your biases over a reading by someone who actually bothered to do real analytical work? You’ve basically said you’ll only accept analyses that confirm your prejudices. Next?

      It looks to be well thought out from a methodological standpoint and offers detailed explanations of what data series it uses and why.

      And it also discusses how public sector bennies compare to private sector in some depth.

        1. Yves Smith Post author

          Bullshit. I read the study before putting it up (and did not feel like reciting or cutting and pasting at length, those so minded can do so at the source). You admitted you hadn’t. And it discussed the basis for its data set choices and what they consisted of at considerable length.

          And if you are attacking the source, people on this site are well educated enough to reject ad hominem attacks.

    2. PeonInChief

      Shouldn’t all employees be able to stay home when ill? Indeed there’s nothing worse than someone who brings his cold or flu to the office because he doesn’t get sick days and can’t afford to take time off.

  9. Trestle Rider

    As I understand, the percentage of our GDP devoted to government is nearing 25%, which is a historical high reached once or twice in the past during wars.

    To argue for increased taxes instead of reducing the size of government seems ludicrous.

    Besides, if you tax businesses more, they will just pass the costs to the consumers or leave the state or country.

    When does government become too big? A good question for some of you.

    Apparently FDR and JFK understood that unions should never be allowed to be formed in government, it would allow too much concentrated power to shutdown the government if the elected leaders did not grant them more money collected from the public.

    I saw that some compared their struggle with Egypt. In Egypt, the people opposed an oppresive government. In Wisconsin, the goverment enmployees opposes the generous people.

    When will the unions understand that to grant them a raise means the private employee must be given a pay cut, either in the form of higher taxes or reduced descretionary cash in in the treasury to aupport the state.

    Lastly, I also never understand why liberals fear big corporations. Its the big government that always abuses the populace the most.

    1. Paul Tioxon

      Two thirds of corporations pay no taxes. If not each and every year, on many years, on a regular basis.



      Furthermore, many, after withholding payroll taxes, do not turn them into the government. Another source of cash on the balance sheet.


      A nation is as strong as its bureaucracy and its ability to collect taxes. If you want to directly assault the power of the government, the will of the people, and the modern standards of living, attack taxes, demonize taxes, make the compelling force of the IRS appear to be a NAZI like holocaust of wealth, extracted from lamb like fools, stupid enough to believe liberal propaganda that taxation if the financing of civilization. Repeat over and over, that the only real, permanent jobs come from the private sector, and that if the private sector is taxed too much, it is time to advocated armed insurrection or move to China or both. The fact that we are the third largest populated nation, with THREE HUNDRED AND TEN MILLION PEOPLE, is not analyzed too carefully, because just as we would need more homes, more stores, more farm production, more warehouses, more trucking, more electricity, we would also need more roads, more schools, more cops, more courts, more recording of deeds, more hospitals, more doctors and more nurses, more people to take of more sick and more elderly. In other words, a bigger government, to regulate all of the activity of more people squeezing into the same amount of space, with the same amount of resources. As the scale of the economy and population increase, not only in size but complexity, the scale of government will be commensurate.

      Corporations want to pretend that they create and sustain the social order, and that government has some how attached itself to the wealth making miracle of free enterprise. It is under the aegis of a democratically controlled republic that private capital exists at all, free from the burdens of a demanding aristocracy, church and military. It would appear, that two out of three have returned, with church trying for a comeback as well.

      1. Trestle Rider

        All the reasons you cite may be well and good, but government cannot outgrow the means to finance it. Folks in the US realize that all levels of government spending is out of control and is seemingly immune to business cycles, recessions, mis allocation, and any form of direct control. Specifically, there are vasts swaths of the people that think government is too big, too tyranical, too costly, too wasteful, too useless, and results in too much loss of liberty.

        1. Yves Smith Post author

          What evidence do you have that spending, particularly the type that involves public unions, is “out of control’? As we and just about every other person who has bothered analyzing this has pointed out, the big budget deficits we’ve had are the result of a collapse in tax revenues thanks to the financial crisis

          And if you want to point to profligacy, look no further than Bush. He increased military spending and cut taxes on the rich, remember? MIlitary spending is nearly half the Federal budget.

    2. DownSouth

      Trestle Rider said: “Lastly, I also never understand why liberals fear big corporations. Its the big government that always abuses the populace the most.”

      Yea, especially when you have big government of the big corporations, by the big corporations and for the big coroporations.

    3. hisgirlfriday

      “Lastly, I also never understand why liberals fear big corporations. Its the big government that always abuses the populace the most.”

      I didn’t realize it was a competition, but after the last ten years, how can anyone (conservative or liberal) not fear both corporations and government?!?!

      Why do you assume that big corporations are not in cahoots with big government? Do you think big government just forced $700 billion in taxpayer money on the big banks against their will? Do you think oil companies and defense contractors were disinterested observers in the government deciding to wage Iraq War?

      At least I can vote against the awful politicians though. I haven’t quite figured out how to vote out the banksters and the military-industrial complex yet.

    4. Walker Lobby is gay

      never understand why liberals fear big corporations.

      Ever here of subprime housing bubble, Enron, walmart, wall street, TARP… are you stupid?

      1. Trestle Rider

        Clearly the government must rule over the enterprises, a light, fair, but resolute hand. But perhaps there was a tendency for some enterprises and government to look the other way while the looting was going on for many, many years, since both were benefitting at the the expense of the middle class.

        Generally, with corporations, I can vote with my feet or wallet, not so with government. You say I can vote for the government I want? The people’s vote is co-opted because the politicians shower their special interest constituents with unsustainable gifts, including financial “victories” to unions involving benefits and wages. So much that the overall public vote is usually for more of the same, since the consequences were delayed or papered over with overly optimistic projections. Now that the sum of all the giving has clearly overreached, how to rein it in? The UK just laid off hundreds of thousands, Jerry Brown lops off 12.5b from the CA budget, and neither will be enough. The only way for the majority of the voting public to agree to rein in government is if some pain is experienced. That occurred in November 2010, even in Wisconsin, but now that their politicians are doing what they campaigned for, the big government crowd is having a complete meltdown.

        By the way, the derilict Wisconsin senators could not behave any more childishly.

        1. DownSouth

          Trestle Rider said: “Generally, with corporations, I can vote with my feet or wallet, not so with government.”

          That’s pure, unadulterated, neoliberal sophistry.

          Sometimes it gets stated along with the “one dollar = one vote” formulation.

          Our democracy, however, is not based on one dollar = one vote, but on one person = one vote. (At leaast it was until the Supreme Court’s Citizens United decision.) And the reason is simple: not everyone has the same number of dollars. In a democracy, one’s vote is not dependent on how much money one has.

          The one dollar = one vote ideology has a twin sister, and that is that people are capable of making rational economic decisions, but are not capable of making rational political decisions.

          But more than that, Trestle Rider’s statement is incredibly naive. Big corporations, even if they don’t control the government, have all sorts of ways of subverting the market. Ever heard of a monopoly?

          1. Trestle Rider

            Your comments remind me of the joke between a capitalist and a communist. The communist boasts to the capitalist saying, “In your system, man exploits man, but with communism, its the other way around!”.

            You say I should rein in corporate malfeasence with a strong government. Fine, but what will rein in the malfeasant government? Can’t vote them out because the public apparently only votes for whoever lines their pockets. Only way for such a system to get fixed is for a major financial disaster that cripples the system, which is still probably years away. But then, after the disaster, there may be nothing left to fix, and the idealogues will rewrite history anyway so none learn the proper lessons.

          2. Yves Smith Post author


            What about “Mussolini style corpocracy” don’t you understand?

            It’s concentrated corporate power that led to the corruption of government. We still have some tough cops on the beat (the FDIC in the financial arena, and remarkably, Gary Gensler at the CFTC takes his job seriously too) so all is not lost….yet.

            The Founding Fathers understood the value of checks and balances. You may not like unions or government, but having checks on unbridled corporate power is much better than the alternative. In the 1800s, railroads employed what amounted to private armies. In Latin America, ITT in its heyday was well known to assassinate inconvenient locals, including low level government officials, and I have this confirmed by ex ITT officers). In Russia in its plutocratic land grab, standing up to an oil company is pretty much a death sentence (I know one person who is evidently the only person to sue a Russian oil company in Russia, win, collect the money, and live to tell the tale). Killing someone in Russia the expensive way (you had not only to kill the assassin, but the person who was the direct contact with the assassin, and the second hit was the pricey one) was about $5000 in the mid 1990s, hardly a major cost for a major Russian company.

          3. skippy

            Crickets, nothing but the sound of….crickets.

            Skippy…hay how does economics amortize whack jobs and South African mercenary army’s, Blackwater et al, ohhh now I remember that’s booked to the public account…snicker.

            PS. I love it when you talk dirty, dirty war, dirty acts…thanks for the honest laugh!

        1. YankeeFrank

          is that all you have to come back with? really? Anyhow, I voted against Citibank by moving my business away from them and they’re still here sucking off the public tit. I guess my vote didn’t count. Do you really think you have power over international banks and conglomerates, and that they wouldn’t kill you in a second if you stood in the way of their profits? Your trust in the oil companies is touching, really… their are daily planes to Nigeria if you’d like to see how safe and reasonable they are.

  10. Jack

    Would you please show some of the likely large number of examples of how the Wisconsin State Government has abused its workstaff, requiring the formation of a public union to keep things fair and honest?

    1. Jack

      I really doubt that Yves can provide any example to my question about government employer abusive practices. That is because for each open teaching position receives hundreds(!) of job applications. There is LOTS of demand for the relatively scarce teaching job openings. And, with the enormous burden that Walker is proposing to dump on the backs of teachers, one can still expect overwhelming interest any teaching job opening because its much better than most other jobs out there locally. Of course, that fact may be lost on those who don’t live in Wisconsin.

    2. bob

      We could start with an abusive work environment. The boss, a short time political hack, comes in and blames all of the problems of the state budget on a very small subset of workers within the state.

      He then gathers national press attention and publicly demonizes said groups, and under that reality, attempts to strip them of their 1st amendment rights.

      Political hacks all over the country seize on this and then propel him onto the national political stage, where he can go on to collect yet another pension (state and now federal, at many multiples of what the teachers can collect), and tax payer funded health care.

      He also leaves behind a lengthy legal battle, and the costs, which will be borne by the tax payers of the state, and the unions, fighting to regain that which never should have been taken from them in the first place.

      And also, just a quick side note- How much would it cost to run background checks on just 25% of the teachers who would be lining up for their jobs? Who would do it? Would there need to be more employees hired by the individual school districts?

    3. Jerry

      Just last two weeks as a state employee, we now have to contract our supervisor if we need a bathroom break outside the 1/2 hour we get for lunch…..new law, we are fired if we have more than three consecutive sick days, each and every minute of our time is evaluated by a computer to determine how much “idle” time is exhibited…we work at a department where calls are processed so idle time is any time the person is not on a call for example, completing the paperwork for a call, asking a supervisor a question regarding a call..
      But what people do not realize these are the type of things people in the private sector are experiencing too because they do not have unions to protect them. Employers are ruthless these days and will continue to be until supply/demand is more in balance.

  11. Wild Bill

    Yves, it looks like you took a position and then tried to find the data to support it. On its face, your data seems good. Once exposed to the knowledge of the masses, it fails. This is the game TV plays, but they don’t have the response mechanism found here. It’s also how we went to war in Iraq.

    1. Francois T

      Wild Bill,

      It looks like you took the contrary position and try to promote it w/o any supporting data whatsoever.

      Pot calling the kettle…

    2. Yves Smith Post author

      Wild Bill,

      I did not “try to find” this study. All the folks on the right have are anecdotes about single examples of highly paid public sector workers. They seem to forget that John Thain’s driver was paid $230,000, more than any example cited of public sector alleged abuses, and your tax dollars went to his comp via the bailout of Merrill.

      There are so many more examples of this crap on Wall Street (start with the top brass and work down), and you are getting angry at unions? Even if the charges are accurate (and the data says this is questionable, particularly when you factor in that we are in a period when private sector wage raises have been flagging due to the impact of the global financial crisis on the economy; longer term averages would show a bigger gap in favor of private sector workers), you are aiming your fire at the wrong targets, in terms of who is really hurting your wallet.

      1. Olddeadmeat

        Our nation’s problems were not caused unilaterally by either public sector unions or megabanks or Democrats or Republicans.

        Nor can the present state of Wiconsin’s budget be considered in isolation. New Jersey, Illinois and California are not outliers – they are warnings.

        The problem is that our system of government makes it easy to promise more than can be delivered. Our workers now compete globally. Technological advances make jobs obsolete. Our nation is no longer assured of preeminence.

        Yves, you done a masterful job of identifying some of the largest contributors of the present crisis. The political powers that be have botched it badly. Business as usual is no longer possible. Republicans are fulfilling their role – holding public unions to account. Democrats are not–what has Pelosi been doing for the past 2 years to reign in wall street in between commandeering Pentagon flights for her family?

        There is corruption everywhere in the body politic – public unions are only a part. We need to CLEAN HOUSE – all of it – bankers, “regulators” everyone. But until you can objectively analyze the effect of public unions, I would suggest you leave that to more objective folks.

        Power must be distributed, not concentrated. Here we have a newly elected governor thwarted by an unelected minority that has the UNILATERAL POWER TO SHUT DOWN A GOVERNMENT FUNCTION AT WILL – without consequences, and without recourse by the victims.

        That is wrong, and proves the governor right to take this course of action – either privatize it and open it up to competition or take away that power or impose consequences.

        No one should have that level of power – it is unbalancing.

        Note – I am not excusing any other groups behavior, what’s wrong is wrong, so citing corporate misbehavior means nothing to my argument – sanction them too. What’s good for the goose is good for the gander.

        1. DownSouth

          Olddeadmeat said: “But until you can objectively analyze the effect of public unions, I would suggest you leave that to more objective folks.”

          And who would that be? Folks like you?

          Here’s my response to that.

          1. Olddeadmeat


            good video. sadly, I am not nearly as funny as I wish I was.

            My answer to your question – everyone is wrong, including me. :)

            but when everyone acts like only the other side is wrong is when we get into deep trouble.

            We’re in deep trouble.

        2. YankeeFrank

          It seems what you are really worried about is the power that workers actually have when they are organized — you single out public sector workers but the same applies to the private sector if and when private sector workers decide to organize and take the power that is theirs. Its unfortunate for corporations that they need workers. But reality is that without workers corporations can’t make any money, so workers do have ALL of the power — UNLESS their power is legislated away as you suggest it should be. I guess you’re not into the free market then. Workers, public and private, have a moral right to organize for their well-being. Corporations are not moral entities, they are not people — they only exist to leech money from the productive work of moral beings — people. Why you would side with abstract and amoral entities over human beings is beyond me, unless your views have been hijacked by propaganda spewing corporations.

          1. olddeadmeat

            Uh…no, YankeeFrank,

            There is a huge difference b/t private sector and public sector unions. Private sector unions don’t have the power to elect the guy sitting across the table from them. Private sectors unions don’t have the power to compel customers to purchase from them.

            Public sector unions have both, and what a difference it makes. They function to protect a empowered, entrenched minority from everyone else, and they protect indiscriminately. No responsibility, no accountability. They function to keep both the best and worst performing employees from being recognized as such.

            Never forget, public employees CARRY AND EXERCISE THE POWER OF THE STATE. What is immoral to my mind is permitting incompetence and corruption to be coddled and protected. That goes for cops, teachers, firefighters, doctors, everybody.

            At least the most egregious politicians can be voted out of office, except in Italy.

            A guy with badge can torture kids in Chicago for years, beat confessions out of them, and still the pension board gives him his pension.

            Talk about immoral.

            I’m not giving a pass to anybody else – first things first. The mechanisms for accountability have to be put back in working order everywhere. No one is exempt.

            There ain’t no sacred cows.

            But if you want to setup priorities, fine. Shakespeare was wrong – the first thing we have to do is hang all the bankers on wall street.

            But the rest of the house must be cleaned as well.

  12. Ellen Anderson

    People who lived through the last great depression knew that the urban families who survived best did so because at least one member had a public job. Public jobs don’t pay that well but there is some security. As someone pointed out on a previous thread, the public employees who settled for less money made a good bet this time around too.

    As for the unions – don’t get me started. Members of public unions voted for Reagan and Bush in droves. The eternal corporate persons started culture wars that they have been winning and continue to win. And people who tried to question our waste-based industrial society were washed away by corporate and union money. Both the unions and their corporate masters supported the interstate highway system and the paving over of America.

  13. Paul Tioxon

    Unions do not have to show damages to reveal why they are institutional survival organizations. In the age of consolidated state power and colossal corporate power, the lone individual standing on his merits is at a disadvantage of power that is obvious. The amount of resources one person can muster is limited to twenty four hours in one day. The personal knowledge vs. the institutional knowledge, human resources staff, specialists in not only labor law, but practicing on a daily basis the art of negotiating with one person. Apparently, the tea party mindset goes from seeing the government as a concentration gulag master extortion racket to the humbled financial basket case, all because the Union is organizationally more powerful in negotiating collectively for each employee, than each employee is capable of doing for themselves, all alone. For the tea party, the state seems to transform from master to victim over night, as soon as a austerity preaching republican gets into power. The attack of the republicans is an anarchist attack on the very structure of the state itself. By demonizing taxation, what makes the state possible at all, it seemingly cuts off the possibilities to negotiate the distinct option to tax corporations, with emergency surcharges to keep the state operations funded during an economic collapse. Corporate profits seems to be healthy eg Comcast just reported ONE BILLION IN QUARTERLY PROFITS, and they depend on discretionary income of consumers. It would seem taxes would be part of a financial compromise, mixed in with what the unions are willing to concede to help balance the budget. SPreading this out over the larger population, including the revenue side, not just the payroll expense side of the equation would seem more equitable.

    1. DownSouth

      Paul Tioxon said: “The attack of the republicans is an anarchist attack on the very structure of the state itself.”

      Well that’s certainly the Republican Party hype. But is it true?

      If we take a look at this graph, what we see is that from 1980 to 1992, under the Republican administrations of Reagan and Bush, federal outlays as a percentage of GNP rose. Then, from 1992 to 2000, under the Democratic administration of Clinton, they declined. Then, under the Republican administration of Bush II from 2000 to 2007 they rose.

      Unfortunately the graph ends with FY 2007, and I couldn’t find a more current graph. But I think we all know that in 2008 federal outlays as a percentage of GNP began to soar.

      But was that because of something that public employees in Wisconsin did? Who was the greatest beneficiary of those increased government outlays beginning in 2008?

      I think a much more accurate statement than yours would be to say that Republicans are statists, but only so long as the state serves the interests of big corporations.

      1. Paul Tioxon

        Military budget declined under Clinton. Bush and Cheney gave us a new standing enemy for the standing army and perpetual war. Federal government expanded for domestic security purposes and war, more wars cyber, drone and good old fashion boots on the ground all over the world. It’s a small world after all, it’s a small world after all…it’s a small small world. And one where we need to build nations, after we invade, going on for ten years. It seems we can track down wikileaks better than Osama Bin Laden.

        All of military spending goes through a few cartels, that have consolidated after the peace dividend kicked in. SEe Carlyle Group investment strategy for buying into military contractors during peace dividend. Government spending and taxation is being painted into a very small corner where the military is still completely untouchable, apparently if Wisconsin teachers were torture instructors or drone programmers they too would operate behind the iron curtain of military sacrosanctness. Teachers, bad, greedy, knitting and chewing gum. Corporate employees, willing to do the work of 3 since downsizing of 1980’s. I have been talking to some of my friends in corporations and they tell me the ulcers, heart disease and tranquilizers for anxiety are just dumped into the water cooler to save money on prescription co pays from the efficient, real world corporate workplace. Sigh, it so sad to see English majors produce pie charts that are of dubious quality. The disingenuousness is so ubiquitous, ah the pathos.

        1. DownSouth

          Pathos plays no role in the personality makeup of the corportist.

          And the only ethos the corporatist knows is self-interest.

    2. Walker Lobby is gay

      Comcast just reported ONE BILLION IN QUARTERLY PROFITS

      Did they pay “any” taxes on that? I doubt it!

      1. Trestle Rider

        The people who worked their paid the taxes. The company provided the opportunity and employment for that to occur.

        1. walker's brain is filled with feces

          The company provided the opportunity to shelter itself from paying taxes to society, so that they can reward themselves — at the expense of the communities they steal from!

        2. YankeeFrank

          Oh stop. So the employees get a small amount of the “income” stream, and they pay all the taxes, and the wealthy and powerful corporation can’t pay any taxes or they will cry. What about the society, resources and people that created an environment where comcast could exist — does comcast owe anything to the support of the schools, hospitals, electrical and plumbing infrastructure, roads, etc. etc. etc. without which all their “profits” would not exist? I am so tired of this idea that corporations should not have to pay taxes because they pay employees, as if paying employees is something they do from the goodness of their nature, not because they require employees for there to be any profits at all. Corporations used to pay a lot in taxes, and guess what — it was a time of the widest and greatest prosperity this country and planet had ever seen. It seems to me that folks like you only see virtue in some huge megacorp’s shining towers on a hilltop, even if everything beneath is a violent, squalid slum full of desperate and sad individuals full of ignorance and stupidity. Strange world you inhabit — one I never want to visit.

    1. ready-mix

      I disagree — tax cuts have exacerbated the situation if you look to where the debt came from — Thanks go to Tom Thompson in 2001 — 3.2 billion smackers worth. The recession and more tax cuts just makes recovery that much more difficult. Business isn’t going to just come in and set up shop overnight because of corporate tax rates.






    2. Yves Smith Post author

      Straw man. My statement was ” The state budget is not in any kind of real peril.” and recite some of the elements of the surplus v deficit positions. Even if the outstanding items do have to be funded this year (before June 30, so in the next five months), deficit on the order of 1% of the total budget is hardly a cause for panic. I also debunk Politifacts later, see:


      1. Jas

        You specifically site “facts” to make it seem as if there is no deficit this year, before the most recent cuts take effect. This surplus has been disproven as it excludes shortfalls in Medicaid. I thought you would be interested in the real situation and I agree that cuts make the projected deficits worse. Using figures in you argument that are wrong make it easy to dismiss your point of view as overtly partisan. The truth matters. I think tax cuts in a deficit situation are a lousy idea but just recinding cuts and raising taxes is not the answer either although it is part of it. WI also needs to have a real discussion about where cuts need to be made and sharing the burden. Being heavy handed with the unions is distracting people from the real conversation.

  14. Jack

    People complaining about corporations paying their fair share DO NOT LIVE IN WISCONSIN! If Wisconsin was a closed system from which no one could escape, that would be a valid argument. Unfortunately, that is not the case. In the past 2-3 years, a number of major manufacturers have moved (or came within an eyelash of moving) operations to a lower tax state.
    -Mercury Marine
    Either the companies move, or the workers took major (50%-yex, that’s FIVE ZERO PERCENT) reductions in pay and benefits, AND the state offered major tax breaks to beg the companies not to move elsewhere.
    The reason is because Wisconsin has a very high tax burden in comparison to other states.

    In Wisconsin, we’ve done the “just raise the taxes” thing for years, and more corporations are leaving. The Wisconsin Governor, Assembly, and Senate have NEVER all been controlled by R’s. For the first time ever, the people of wisconsin have decided to empower its state congress to TRY SOMETHING DIFFERENT to staunch the exodus of companies leaving Wisconsin due to HIGH STATE TAXES. People arguing for government unions based upon arguments of companies paying “their fair share” are not experiencing the “boots on the ground” reality that there are no jobs being created in the private sector. That is why there are hundreds of applications for each teaching (government) job available.

    1. run75441


      You are tilting with windmills if you believe companies moving to another state is going to keep them in the US. Not the case and manufacturing jobs have been twindling for several decades now, mostly because of globalization and efficiency gains. The Labor giveaways will not stem the flow of moves and these costs are a small portion of the costs of manufacturing.

      Where do the state revenues originate? 90% originate from the citizens and little from Coporations. As a former resident, I knew this and you should also. We paid fr it through property taxes and personnel income taxes. Corporate taxes were 32nd in the nation in 2007 as shown by one of the local rags . . . “The Isthnmus” with which I am sure you are familar? Why did I pick 2007, because it shows there was not a history of over taxing coporations in Wisconsin.

      “Ernst & Young provides two methods for calculating Wisconsin’s business tax rank compared with other states. One calculates total business taxes as a percentage of total personal income. The other takes total business taxes as a percentage of private-sector gross state product ‘ that is, the total value of private business activity.

      In 2005, Wisconsin ranked 31st among the states using the first method and 33rd using the second. This approximates Forward Wisconsin’s claim, based on data from the Federal Reserve Bank of Boston, that Wisconsin’s business taxes are ‘lower than those in 35 other states.'” http://www.thedailypage.com/isthmus/article.php?article=6214

      And in 2010 going into 2011? 25th in Corporate Income Taxes.

      “While the state’s business climate rankings are low, taxes on business do not appear to be the major factor. By several measures, business taxes in Wisconsin are middle of the pack or better.

      Our mix – graduated income tax rates, relatively low sales taxes, no sales tax on food, high property taxes – hits different groups in vastly different ways. It means higher tax burdens for the rich than in all but a few states. It keeps tax burdens relatively low for those at the very bottom. But once workers reach $30,000 a year, their total tax burden jumps faster than in any other state.” http://www.jsonline.com/news/wisconsin/90546309.html

      Pay your taxes rich guy! The issues are not the taxes.

  15. ready-mix

    There are plenty of studies giving the same basic graph about private and public pay as shown above. I’ve seen the data for the professional degree — lots of (well paid) lawyers in private sector. I think one still has to go back to where the debt has come from for a meaningful solution to be found. I have no confidence whatsoever that conservatives will ever seek to undue the debt they have consistently run up on the public credit in the last 30 years. Even less so for libertarians who believe fundamentally that government is to blame for everything and far less for the Koch libertarians who are basically corrupt — ideology merely hides willful corporate lobby. It’s obvious tax increases would contribute to debt control but they don’t negotiate that. So we are left with the most minor and harmful implementations of policy. Wisconsin workers have had enough and I commend them for negotiating in good faith and understanding what shouldn’t be negotiated. Looks like pension and health are going to be issues as the public workforce ages and simply because someone else’s representative didn’t support a private pension doesn’t mean its acceptable or to tolerate.




  16. RueTheDay

    There’s no way that compensation chart is accurate.

    Every single category except “less than HS” shows private sector making more than public sector, sometimes significantly more. The “less than HS” cohort is the lowest paid in both sectors, but the difference is small. Yet the overall section at the far right shows public sector overall being slightly higher than private sector overall.

  17. John

    The propaganda machine is working intensely on both sides, god only knows the real truth. The bond market will be the ultimate judge, jury and hangman if there is a funding problem.

    1. Paul Tioxon

      John, you must be a moderate. Apparently, you people are what everyone else must conform to in order to see reasonable. What’s it like to be blind and deaf in order to maintain the dead center of the dead center?

  18. rd

    One of the biggest issues is the abysmal state of government financial budgeting and reporting. As a result, statements about financial conditions of governments are nearly meaningless, ehether good or bad.

    A classic example (which also is common in the private sector) is pension plans. They use 8% projected returns whether interest rates and PEs are at sky-high levels or at rock bottom. It is clear today, that interest rate income cannot possibly be used to help achieve 8% rates since even junk bonds are lower than that. Shiller has also shown that the current level of PE ratios historically does not come close to 8% annual returns. We need to get to a much more rational method for project pension plan capitalization requirements.

    Until we completely reform government accounting, it is likely that very poor decisions by the right and left will continue to be made.

  19. eugene

    Long ago, I learned each side uses some study or another that justifies their agenda. So I learned to rely on what I see. I’m retired now but I never met a public employee, doing the same job, that didn’t have better pay/benefits than I did. When I did work in the public sector, far too often 1/3 to 1/2 the staff were standing around at any given moment. In one job the director sent around an email stating people could’t knit on the job anymore. And from friends working in the public sector, I hear the same stories at present. As far as teachers, some statistics: 1/4 of Americans are illiterate, another 1/4 can’t read a newspaper article/understand what they’ve read and 30% of college graduates can’t understand a complex article. It’s common for cashiers to be unable to do simple math. So lets not fool ourselves about what a great job they’re doing.

    Union workers are employed for life. I have a good friend, director of a state hospital, who had career long frustrations with his inability to do anything about unionized laziness. Like a painter taking all day to paint half a door. I drive by public workers with the most common factor of one working to 3-4 standing around watching. In my area, I routinely see county trucks plowing snow when there’s no snow to plow. Got lots of these stories. Why? Got me.

    I see union contracts with built in pay raises. I live on Social Security and haven’t had a pay raise lately.

    And don’t get me started on the military. Any person who has ever been there can tell stories for hours.

    To me, we’re way to focused on “union rights”, etc,etc and not focused at all on “we’re paying for this”. And we’re totally forgetting that our taxes will be increased to pay for these pay/benefit packages the rest of us don’t have. Let’s come out of intellectual world and live in reality. The reality is we’re broke. But if you want your taxes to go up so a few can continue to ride the gravy train, so be it.

    1. ready-mix

      The reason studies are more important than personal observation is that they are far more likely to uncover trends and effects of entire systems so that one can argue or generalize about a particular subject. They are also more objective (less bias) and open to argument. Taxes have been going steadily down which is contributing to deficits. I’d like to have safe roads, bridges, water and people not dead on the streets. I think it’s worth the investment.


    Viola! Being nice to your best buddies means you need to go after someone else.

    The second major canard i

    Is the union boss just one more ruler to skim off the profit? Just one more government? Just one more layer of Schweineschmalz? Do we need to dump more of rulers? Do all of them rulers from both sides of tracks meet for a chat at Vail when peones like we go for a night-light-downhill at Aspen?

    Who knows? One thing for sure, “The private sector has been engulfed by the public sector.” Has the stuffing of ballot boxes become a fine art? Has it become the most thriving industry of the World? Is the art now perfected right here at home by the PR industry and the expensive TV advertising industry?

    U B Judge.

    U B Thurgood

  21. gs_runsthiscountry

    Now I am trying to digest and research this little nugget posted in the Milwaukee Journal-Sentinel Business section this morning. I have so many questions on this one…Venture Capitol and Fund of Funds? State sponsored.

    My gut reaction is, let us count the ways for outside money to flow both directions. How wide open is the door for abuse and mismanagement. Are the Koch Bros. involved with this? And, what happens when this State Sponsored Venture capitol starts to divest itself after sucking start-ups dry. Why is there an effort in syndicating Venture Capital money monies here in Wisconsin. I thought conservatives and republicans were about smaller government and privatization, silly me i must have been mistaken.

    any comments from others here welcome


    Walker pushes to form venture fund
    Kanavas to head effort; administration wants action started by March 1

    By Kathleen Gallagher of the Journal Sentinel


    “This fund should be structured so that professionals are investing the money, not government employees who may have an interest in picking winners and losers,” wrote Culotta, Walker’s senior policy adviser for economic development.

    More: http://www.jsonline.com/business/116519953.html

    1. Walker Lobby is gay

      “This fund should be structured so that professionals are investing the money, not government employees

      Those pros are no doubt good buddies of walker! They also just passed some laws there that allow the pension funds to play with more casino leverage, so makes sense that walker wants to profit from his position and use his teabagger connections.

  22. Brian

    Wait a minute: the opposition shows a chart, let’s say of budget gaps (at least what you claim the gov is pretending to ask) and you proceed to not accpet it on face value; but when a chart that supports your belief is shown it’s uncritically accepted?! Certainly Ms. Yves’ analysis is very good in some areas, but over the course of time this issue involving public workers and governmental budgets has proven to lack objectivity. So honestly, you are going to accept a chart, as if it speaks for itself, without questioning how it was complied? Would you extend such willing acceptence if the oppsition did the same?

    1. Yves Smith Post author


      Unless you can tell me what is wrong with my analysis, your charge that I am “lacking objectivity” is groundless.

      Has it not occurred to you that pretty much everything you read in the MSM has a corporcrat slant? This blog (among other things) is in the business of debunking that.

      Just because the corpocrat party line on unions happens in this case to align with your prejudices does not mean it is any less laced with propaganda. I happen to have grown up in a family where my father regularly dealt with unions as a manager and later top manufacturing executive. I spent most of my childhood in towns where he managed the biggest local employer, a manufacturing plant. So my experience here is not abstract. I strongly suspect yours is.

      1. Paul Tioxon

        Past Internship Placements

        We select newspapers that provide fulfilling internship experiences in large metropolitan areas or medium-sized markets. These newspapers assign a mentor to provide guidance and help you develop your skills. In past years, internships have been available at the following papers:

        Gaston Gazette – Gastonia, NC
        The Monitor – McAllen, TX
        Shelby Star – Shelby, NC
        Valley Morning Star – Harlingen, TX
        Orange County Register – Orange County, CA
        News Herald – Panama City, FL
        Odessa American – Odessa, TX
        New Bern Sun Journal – New Bern, NC
        Free Press – Kinston, NC
        The Brownsville Herald – Brownsville, TX
        Times-News – Burlington, NC
        Pittsburgh Tribune-Review – Pittsburgh, PA


        The Koch Summer Fellow Program is made possible by the generous support of the Charles G. Koch Charitable Foundation.

  23. Mickey Marzick in Akron, Ohio

    Budget shortfalls and taxes are two sides of the same coin. And we focus on the trees again and miss the forest – COLLECTIVE BARGAINING. This is real issue. That Wisconsin, Ohio, and many other states have similar legislation pending to eliminate COLLECTIVE BARGAINING by LAW is the culmination of 40 years of neoliberalism. To think is otherwise is myopic, if not plain stupidity.

    Initially, this process began with the deindustrialization of the North [1970s] in the private sector which eliminated millions of unionized middle-class jobs. This loss of revenue [employment and corporate] is the structural basis of the present crisis. The financial crisis has only brought this the fore. But more importantly, union membership was simply eliminated by market forces, making overt union-busting unnecessary. Declining employment – decreasing union membership – declining electoral base of the Democratic Party.

    Without this structural shift, we wouldn’t even be at this point. It took 40 years of rightward ideological/political drift in conjuction with these economic changes to precipitate the fiscal crisis of the state – the starving of the beast – at local, state, and federal levels. The financial crisis was only the coup de grace in this historical process.

    Throughout this process, as steelworkers, autoworkers, rubberworkers, machinists, etc lost their jobs by the millioms, the public sector unions sat on their hands and watched, believing that it couldn’t happen to them. Now it’s their turn…

    The public vitriol and furor directed at public sector unionized employees is palpable. Comments on the WSJ testify to just how much vitriol there is. For it is both antigovernment and antiunion – two themes of the same REACTIONARY choir that began to sing the virtues of globalization and deregulation 40 years ago. Unable to “decertify” public sector unions, outlawing their right to bargain collectively is the next best thing.

    COLLECTIVE BARGAINING and the right to organize [Wagner Act 1935] are one of the two pillars of the New Deal, with Social Security the other, crumbling before our eyes – the two targets of reactionaries since each’s inception. It is only now that assaults on either have become “reasonable”. 40 years ago no prominent politician would have proposed dismantling either. He would have been seen as a “nut case”. But now Walker and Kasich appear to be reasonable men. Ask yourself how this came about? The groundwork began before many of you were even born. To single out events of the last 10 years is to miss the historical antecedents that brought US to this juncture.

    And a juncture it is – for both Democrats and Republicans. Because if collective bargaining is eliminated by legal fiat, whatever differences there may be between Democrats and Republicans will be inconsequential. If this isn’t a litmus test for the Democratic Party what is? Why aren’t Obama and other prominent Democrats in Madison in solidarity with public sector employees denouncing Walker et al for even proposing such antidemocratic policies? There is no further room for compromise or additional concessions. It’s time to take a stand. Which side are you on?

    The velvet glove of authoritarianism is morphing into the iron heel of MARKET TOTALITARIANISM. The ROAD to SERFDOM lies before US.

    1. DownSouth

      RIGHT ON! Mickey.

      I’d just add that there was nothing inevitable or natural about any of this. This happened because political decisions were made that made it happen. These decisions were intentional, deliberate and malicious, all part of a larger, global neoliberal agenda.

      And the decisions were bipartisan. The Democratic Party is very much part of the problem. It is not the solution.

      Neo-Nazism, neo-Stalinism, whatever you want to call it, it’s upon us. It’s all part of a Fitchean orgy of nihilism that was a long time in the making. The neoliberal nightmare that the U.S. visited upon the southern hemisphere has finally come home to roost.

      1. Mickey Marzick in Akron, Ohio

        But doesn’t it seem like a closed discussion between two old men who have watched this descent into darkness for most of their adult lives?

        Is anyone else listening to our conversation?

        I refuse to become ensnared by the debate on “numbers” because the NUMBERS GAME is THEIR GAME. The moment you start to play it, their outcome is usually a foregone conclusion.

        There comes a time when the “numbers” no longer matter, but principles do. This is that time!! It’s an opportunity to unmask this friendly fascism once and for all. Perhaps Americans are beginning to get it… But forgive me if I remain a bit jaded by political exile in a country I no longer know or understand.

        Vaya con dios. Tenga cuidado!

    2. Trestle Rider

      Most of the public supports private company collective bargaining, as opposed to government unions, and also only if the following two restrictions are achieved:
      a) the employees have a choice whether to join the union and contribute dues, b) the choice to join is opt in, rather than defaulted in which forces a difficult opt out process.

      Most of the public does not support unions in government. How can you bargain against the public? It is not as if they are deciding how to slice the profit up to the optimum benefit. There is no profit in government, only judicious adminstration of collected monies from the public.

      1. Mickey Marzick in Akron, Ohio

        But then you invite the free-rider problem discussed by Mancur Olson in “The Logic of Collective Action.”

        If I don’t have to join the union or pay union dues but get the benefits of union membership anyways, why should I join? That’s why the “closed shop” exists because some Americans are always looking for a free ride on someone else’s dime. Cheap, ignorant, low-life mother fuckers who are too stupid to think long-term, incapable of seeing the bigger picture, and mired in the eternal present. Yeah – you hit a nerve!

        It plays right into the hands of management – a divide and conquer strategy to atomize the labor force into self-maximizing stooges in a war of all against all… with only one winner. And it usually ain’t them!

        Keep riding that trestle in the hope that you get to the other side of the chasm…

  24. Bernard

    yes, it is fascinating to watch the attack on unions and the poor who collectively fight the rich and government/corporate abuse. the howls go to such levels Fox has surely won this investment battle.

    cause it is all about the MONEY. lol

    it is telling to watch the absence of the President, a supposed left of center,LOL. do nothing so he wont get “involved.”

    enough unions sold themselves out by buying into, with no returns, the propaganda machines of the Right. figuring they could buy into the next and newest “owners” of America, the unions didn’t fight when they had the chance. now they are all but toast due to the Corporate owners of America, DOJ, BOA, Wall St. and the rest.

    to watch the union haters here is most instructive as to how well the Big Lie St. Ronnie heralded as a spokesman for Corporate Business.

    America is getting its’ due for sucking up to the lies sold by smart Marketing men, aka the Big Lie… Government is the Problem.

    for they have succeeded in their Big Lie!!!! surprise surprise. now Government is the Problem aka known as Obama, Republicans, Democrats Supreme Court.

    all bought and paid for by Business and their successful PR campaign.

    St. Ronnie and the grifters have stripped this country bare.

    i’m glad i won’t be around to see the revolution from the poor and the newly made poor. Egypt told Americans you can overthrow even the most despotic rulers, it is a long battle and takes time. and Business kills their enemies eventually.

    to see such hatred towards unions is just a reflection of the hatred the Right has mobilized and is proof hatred is a teachable sickness. God, such envious, hatefilled, greedy, selfish, idiot zombies. well taught and versed in the screed of “My way or the highway” Republicanism. American Taliban, in its’ purest form.

    as is plainly evident, you reap what you sow. and god these Corporate Satans are really good at their job.

  25. RA

    Republicans claim that tax-cuts pay for themselves, then how come the recent tax cuts in Wisconsin are resulting in red-ink? Are they claiming that it takes longer than 2 years that the current cuts are targeting?

    I am not sure I understand what is wrong with having to vote for union membership every year? Isn’t that one of the items Walker is pushing for?

    In my opinion Republicans have a point that we need to bring spending under control and we can’t just keep on kicking the can down the road. Where I think they are wrong (unless they can prove it otherwise) is on the tax-cuts for the rich and inflicting all the pain on the people who are most vulnerable.

    Democrats have a point that we need to cut in a prudent fashion. A family would not stop spending on their kids education just to balance their budget. Such a balanced budget might provide a short term gain but would create more damage in the long run. What democrats need to learn is NOT to make promises that can not be met in the long run but then you can not blame them because the election cycles don’t provide any incentive to think long term.

  26. XRayD

    Yes, states do have budget woes – and while for some states like California and Illinois, they have been in the making for years – clearly for many other states, the current woes are a consequence of the man made financial crisis and its attendant fall out.

    Just as savers and responsible home owners, employees, and new entrants to the job market and retirees have all paid and continue to pay the price for the shenanigans of the Banksters on Wall Street and the so-called peoples’ representatives in Washington, it is now time to go after unions and retroactively revise the pensions and benefits of government workers and make them pay too in the name of fiscal sanity, no less!

    1. False Profit

      Re: “it is now time to go after unions and retroactively revise the pensions and benefits of government workers and make them pay too in the name of fiscal sanity, no less!”

      ==> Whoa, whoa, whoa … it’s “time to go after unions” ? Huh? Did anyone go after the bankers that caused this mess.. your saying that we all continue to pay the price” … which implies that … because no one went after the bansters, they will continue to fuck everyone over — but for God’s sake, let’s go after the unions, because they are evil? What are you talking about? Where was your passion to go after wall street, where is your passion to attack the banksters? Why focus on unions as the bad guys, when many people are being impacted by wall street corruption? It isn’t the unions or teachers destroying America … wake up!

      Why don’t we all go after bankers from wall street and retroactively revise their pensions and benefits??? Huh???

      Re: “and retirees have all paid and continue to pay the price for the shenanigans of the Banksters on Wall Street and the so-called peoples’ representatives in Washington”

  27. Paul Tioxon

    Take a look at what University research about public pensions reveals.

    Look at the bias for fabricating ticking time bombs. Every kook pseudo intellectual false flag and misdirection is employed to create the business model of cutting payroll and payroll costs as the simple, only solution and even the total cause of the problem to begin with, for state spending in the US. Poor tax collection, low actual tax rates and uncountable tax loop holes preventing taxes from ever existing as an actual problem for profits, since many corporations do not pay taxes. And of course, my favorite lie that is only brought out to confuse and just at critical juncture of some discussion: “You know, by increasing taxes, you are only causing the poor consumer to pay more, because all taxes are passed on in the form of higher prices.” Why oh WHy then, do businesses always complain about tax uncertainty, cost of regulation uncertainty, in the with holding of capital investment. If they know that they always will pass on the cost of everything and anything, why not just go ahead and invest, start hiring and bring the economy back to prosperous levels. The with holding of taxes is same as the with holding of capital for re investment. Capital is used as a weapon, to discipline the labor force, and control the political process through means that they control, when they clearly do not control the ballot box. An economic depression is business voter suppression. When the supposed superior model of administration, in the form of the private-for-profit-business model collapses, with insolvent banks, bankrupt car makers, the rational choice is to choose with the ballot box, the institutions that have not failed so miserably. Yet, the clamor from the right is use voter anger and divert it to public employees, as if they caused any of the problems that cause unemployment, foreclosure, wars of choice and an annual TRILLION military budget for non existent enemies.

  28. F. Beard

    The first is that the collapse in tax receipts was the result of the global financial crisis. That’s the 800 pound gorilla in the room that everyone seems to ignore. Yves Smith

    If we could eliminate the boom-bust cycle then we would not have these problems. That would require fundamental reform in money creation. But also, a bailout of the entire nation with debt free United States Notes combined with a 100% reserve requirement on the banks would temporarily fix things till the reform was implemented.

    But second, as a very good article by Richard Wolff in the Guardian stresses, is that corporations no longer pay their fair share of total taxes (emphasis his): Yves Smith

    More importantly, imo, is that corporations can borrow at artificially low interest rates from the government backed fractional reserve banking system. Without that privilege, corporations would be compelled by market necessity to share wealth via new stock issue rather than loot it via the counterfeiting cartel.

  29. profoundlogic

    To any of the hypocrites in support of Walker and his crony corporate bail-out politics…

    Unless you are home-schooling those beautiful children of yours while you are collecting your white-collar paychecks, it might be a good idea to keep your opinions to yourselves, less you be outed for talking out of both sides of your mouth. When you are educating your own children, cleaning your own homes and mowing your own lawns, perhaps then we can take your rants more seriously.

    It’s comical that people like Mish will rail on unions as the scourge of the earth, yet neglect to mention the real reason for deficits in budget coffers. The budget shortfalls were caused by massive control fraud and Ponzi economics, plain and simple. Now that the crooks are getting a free pass in lieu of handcuffs, corporate and monied elites want to obfuscate the truth. Try as they might, they can’t keep the charade going forever. Union members striking in Wisconsin (with more to come) realize that shared sacrifice is necessary in order to balance budgets at all levels. They also realize they’ve been thrown under the bus for political gain.

    Handing out huge tax breaks to the same corporations that nearly crashed the global economy isn’t going to bring about sustained economic recovery, and attacking union employees will only bring more attention to the growing disparity between the middle class and those who seek an even greater concentration of wealth to further their agenda.

    The events in Wisconsin underscore the importance of a united front which is necessary to bring down a corrupt system which is destroying middle class families and America in general. The public may finally be waking up to the new realities of politics in America, where the terms “Democrat” and “Republican” are simply two variations of a broken, corrupt system which serves neither the Republic or its democratic principles.

  30. power to the people!

    Re: “The public may finally be waking up to the new realities of politics in America, where the terms “Democrat” and “Republican” are simply two variations of a broken, corrupt system which serves neither the Republic or its democratic principles.”

    Very nice; I agree totally with you!

    1. profoundlogic

      At least Yves is open to debate and backs her arguments up with facts. Apparently “Mish” likes to take his toys and run home (remove your post) when you call him a union-bashing hypocrite. I can only assume he’s not home-schooling or cleaning his own house.

  31. Curious and uninformed

    As I have watched the debates over the past three years on various economic and financial issues, and projecting possible solutions to the broad range of problems, I am finding myself in need of much more information than can be readily gathered. The commenters on this website seem to be an informed and sophisticated group, so maybe help can be found here, at least in terms of finding sources for additional information for my research.

    First, if one of the basic problems is that state and local revenues have not kept pace with budgets and spending since the banking collapse, I need to find those states and cities that in 2005-06 said to themselves ‘there is an enormous problem headed our way and we need to batten down the hatches, the real estate situation is unsustainable, we see a problem with mortgage backed securities and derivatives, and we don’t want to get caught in the storm when revenues decline.’ In other words, I’m looking for the states and cities that budgeted more conservatively in anticipation of problems to come.

    Second, I’m looking for those states and cities that very deliberately have analyzed the provision of services to make sure that tax revenues have been efficiently used. Considering that state-local tax revenues go mainly to a) primary, secondary, and post-secondary schools, b) police, fire, ambulance services, c) judges and jails, d) roads and bridges, e) healthcare, and f) general administration and regulation, I am looking for well-disciplined comprehensive audit and management oversight reports on the delivery of these services, including findings on whether such services can be most efficiently provided by state-local administration, or can be competitively bid for private providers.

    With helpful guidance and information such as this from the sophisticated readers of this website, I can help companies and families decide where to locate. Otherwise, real people solving real problems based on emotionally charged opinions and varying degrees of fear will probably be unable to do much other than repeat their mistakes. And, the politicians and bureaucrats, who thrive on creating division in the name of making peace, will successfully enhance their power and influence.

    1. DownSouth

      Curious and uninformed said:

      I am looking for well-disciplined comprehensive audit and management oversight reports on the delivery of these services, including findings on whether such services can be most efficiently provided by state-local administration, or can be competitively bid for private providers.

      What is this, the invastion of the neoliberals?

      The drive to privatization is just one more plank of the neoliberal platform.

      So let me get this straight. The same politicians who lack the integrity to negotiate a contract with public labor unions so that the people’s interest is protected somehow, as if by magic, get transformed into pagagons of probity when negotiating with private purveyors?

      You might want to ask the rank and file of Latin America how that magic worked out for them.

  32. mezcal

    Found, ironically, in the sidebar to an article in today’s Links post.

    “She added a kicker that is also making the rounds: Walker and fellow Republicans in the Legislature this year gave away $140 million in business tax breaks — so if there is a deficit projected of $137 million, they created it.

    Maddow and others making the claim all cite the same source for their information — a Jan. 31, 2011 memo prepared by Robert Lang, the director of the nonpartisan Legislative Fiscal Bureau.”

    “Meanwhile, what about Maddow’s claim — also repeated across the liberal blogosphere — that Walker’s tax-cut bills approved in January are responsible for the $137 million deficit?

    Lang’s fiscal bureau report and news accounts addressed that issue as well.

    The tax cuts will cost the state a projected $140 million in tax revenue — but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.

    Here’s the bottom line:

    There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion. Walker’s tax cuts will boost the size of the projected deficit in the next budget, but they’re not part of this problem and did not create it.

    We rate Maddow’s take False.”


    1. Yves Smith Post author

      This is a straw man. We are not Maddow. Please deal with what we wrote and respond specifically to it

      We linked to Lee Sheppard at Forbes who reaches the same conclusion, and she happens to be a tax expert, that the Walker tax gimmies to corporations are a substantial drain.

      And what baseline would Politifact suggest using? If the budget ex changes in 2010-2011 is projected to produce a modest surplus or per including other charges a modest shortfall (not all of which may come due in 2011 as it concedes, governments like private businesses try to defer payables), and tax receipts are depressed due to the state of the economy (Turbo Timmy is now talking about 3-4% growth in GDP for 2011) you’d expect the fiscal situation to improve in 2011-2013. Did you miss the part in the post where we talked about the states being the result of the economic impact of the global financial crisis, aka a deep recession? That means when the recession abates, the budget situation should improve because the economy is stronger.

      That means the tax breaks would hit in a budget that should be expected to be no worse, likely better than the 2010-2011 forecast ex other changes in the budget. That provides further proof for the thesis that the budget hysteria is a complete fabrication by Walker.

      I’d rate Politifact’s ability to do financial analysis a big FAIL.

  33. Pixy Dust

    Yves, I know this is off-topic, but maybe not. The other day you posed an important question by essentially asking why liberals are so ineffective at being heard. Let’s face it – OUR representatives are inadequately funded during campaign season. OUR representatives don’t represent “the American People” in conservatives’ well-scripted word-parsed jargon. OUR representatives represent Us – the American Lilliputians. But unfortunately our representatives have to compromise our interests to get elected and get anything done on our behalf. And we don’t thank them enough when they do.

    We all know that campaign finance reform is essential in order to return to a legitimate, honest, democratic campaign process, but that is a debate that must occur at the state and local levels.

    The democratic party is the big tent party with many interests that sometimes conflict and lead to impotence. The conservative republican party – as your astute blog community knows – represents global corporations. They are certainly well-funded masters of newspeak who appeal to hard-working people and small business owners whose interests they continually undermine. And as is obvious, conservatives play on fear and anxiety in the religious fundamentalists’ psyche because those are the very people who continue to put them in office.

    While I am not a marketer, I’ve spent my career working directly and indirectly with marketers. What I see in the Democratic (and Green) party is continual missed opportunity. Most American Lilliputians are too over-worked and anxious to engage in the political process. They spend their time away from work self-medicating and turning to simple mass-entertainment where no thinking is required.

    Now conservative republicans have seized President Obama’s optimistic mandate of hope and change to further drive the wedge between the shared interests of middle-class Americans. They’ve masterfully turned that optimism into self-doubt and self-defeatism. They’ve hijacked our shared sense of self-determination and capability, and turned it into a process of tearing down each other and destroying the only thing we all have that unites, serves and protects our interests. Government has become a dirty word. Our personal representatives have been reduced to “politicians” – a nasty word meaning they only look out for their own sinister interests. When they’re not acting as “politicians” it’s because they’re “socialists”. Yet conservatives use the words “us” and “we” interchangeably in their own dialog, driving the wedge further and deeper to distance us from ourselves.

    Liberal and progressive Democrats, and Greens, can use our optimism and numbers to whimsically turn conservative rhetoric on its’ head before it does more damage and harm.

    This morning I watched C-Span for a few minutes and caught a conservative’s well-scripted routine. It was fun and comedic, offering a perfect opportunity to highlight his overly confident talking points. Therefore, fresh off my Pixy Press Gazette is my first editorial foray into journalism. Hope you don’t mind.

    Jim Jordan, (R) Ohio, Proudly Admits to Not Paying Taxes.
    In a philosophy similar to Wall Street’s, he says he loves spending other peoples’ money.

    In an interview with Susan Swain on C-Span this morning, Jim J. said specifically “Politicians don’t pay taxes.” How he knows the tax status of other politicians is unclear. Nor did he specify whether he means “Your Representatives” when saying “politicians”.

    Jim also gave the hands and fingers gesture indicating quotation marks when he said “Obama wants to close corporate ‘loopholes’,” clearly indicating he doesn’t believe loopholes effect the federal budget deficit.

    Whew…sorry for the long entry. Holy pig snouts am I tired. It takes a lot out of a pixy to write so many words. But journalism sure seems fun and there is so much opportunity. We pixies know no sorrow. Only love for life and especially people. Now I’ll read your entry for today. Thanks for your work.

    Happy Sunday Yves, where everyday is pixy day.

  34. Rice Bingham

    Finally, after decades of oppression under the unelected Dictatorship of the Walker regime, the citizens of Wisconsin are rising up, and casting the boot heel off their collective necks!

  35. sbranda


    While I agree with your overall sentiment here, I do want to point out that your reading of the memo from the Legislative and Fiscal bureau needs some correction. The $56 million surplus is measured against appropriations for the 2010-2011 fiscal year. However at the end of page 3, the memo outlines some appropriations shortfalls that add up to $140 million.

    That said, a $140 million shortfall on a 13+ billion dollar budget doesn’t sound like a singular crisis that necessitates union busting. It would be interesting to know how common these types of shortfalls and how states typically resolve them.

    1. DownSouth

      Yep. $140 million divided by $13 billion is about 1%.

      That’s not much more than a rounding error.

      Of course the neoliberals never engage in “distorting the issues with spin and misinformation.”

        1. Yves Smith Post author

          I debunked Politifact @ 4:48 PM (don’t believe everything you read on the Internet :-)


          You cited $140 million earlier, based on Politifact, which per your second reading is not correct. I saw those figures and could not tie them to your earlier comments.

          Regardless, this is not a large shortfall on a $13 billion budget and hardly warrants the hysteria being created around it. And if he was so concerned about Wisconsin’s fiscal health, why did Walker has put through FURTHER tax breaks which make the situation worse for the state?

  36. RJ

    The chart is simplistic; just grouping jobs by degrees is all but pointless. A BSEE integrated circuit designer is not comparable to a BA gym teacher.

  37. razzz

    Pardon me Yves but your slip is showing.

    The pending bill does not seems to unreasonable…

    Eliminate collective bargaining rights for most public workers. So while unions still could represent those workers, they would not be able to seek pay increases above those pegged to the Consumer Price Index unless approved by a public referendum.

    Unions also could not force employees to pay dues and would have to hold annual votes to stay organized.

    Local police, firefighters and state troopers would retain their collective bargaining rights.

    Public workers would have to pay half the costs of their pensions and at least 12.6 percent of their health care coverage. That represents an average of 8 percent increase in state employees’ share of pension and health care costs.

    Unemployment is lower than the national average in Wisconsin, draw your own conclusions and the State with a couple tweaks can actually have a balance budget.

    President Regan set the standards dealing with walkouts, the public unions must conceded.

    1. DownSouth

      Oh well, I guess if Saint Ronnie “set the standard” that’s tantamount to them being engraved in stone and carried down from Mount Sinai, just as we see in this video.

    2. Yves Smith Post author

      Trends are not set in stone, particularly ones started in the Reagan era. The leveraging up of consumer balance sheets that resulted from his inattention to worker wages and his promotion of the notion that anything that resulted from “free markets” had to be virtuous resulted in increasing consumer debt and more frequent and severe financial crises. Because that started in the Reagan era, you are presumably also of the view that that development was salutary and should continue.

      You are also misrepresenting (via selective omission) the basis of the dispute between Walker and the state workers. They had ALREADY offered concessions that were significant and have agreed to his proposed budget cuts. Read that twice. This dispute has NOTHING to do with finances, it is all about union busting. The unions are not fighting over the need to make adjustments in the light of the state of the economy, the dispute is about their collective bargaining rights. And you understate greatly the impact of his proposed legislation on that.

      Per Ezra Klein:

      The proposal doesn’t stop there, though. “Contracts would be limited to one year and wages would be frozen until the new contract is settled. Collective bargaining units are required to take annual votes to maintain certification as a union. Employers would be prohibited from collecting union dues and members of collective bargaining units would not be required to pay dues.” These rules have nothing to do with pension costs or even bargaining. They’re just about weakening unions: They make it harder for unions to collect dues from members, to negotiate stable contracts or to survive a bad year.

      The best way to understand Walker’s proposal is as a multi-part attack on the state’s labor unions. In part one, their ability to bargain benefits for their members is reduced. In part two, their ability to collect dues, and thus spend money organizing members or lobbying the legislature, is undercut. And in part three, workers have to vote the union back into existence every single year. Put it all together and it looks like this: Wisconsin’s unions can’t deliver value to their members, they’re deprived of the resources to change the rules so they can start delivering value to their members again, and because of that, their members eventually give in to employer pressure and shut the union down in one of the annual certification elections.

      You may think Walker’s proposal is a good idea or a bad idea. But that’s what it does. And it’s telling that he’s exempting the unions that supported him and is trying to obscure his plan’s specifics behind misleading language about what unions can still bargain for and misleading rhetoric about the state’s budget.


  38. JITWAL

    Please do not say unions are not overpaid.

    It is just silly to state such nonsense. Why be part of a union if it is not helping you get more benefits and pay?

    I believe folks say such dribble out of some misplaced sense of compassion.

    Public service employees are entitled to market rates like the rest of us tax payers. If a city or state paid below market rates, then nobody world work for them. I am not willing to pay a premium for union workers. I want to pay market rates.

    1. bob

      What’s the market rate for a firefighter now?

      What’s the market rate for a firefighter when your block is on fire?

  39. Pixy Dust


    a = Bill Gates = $54,000,000,000

    b = Pixy = $0

    c = a + b % 2 = $27,000,000,000

    Woohoo! Pixy’s rich!

    d = Average US Median Household Income = $52,029

    e = b + d = f

    f = 2010 tax bracket for US Median Household Income = 13.45%

    f = c X 13.45% = $3,631,500,000

    Uh oh. Pixy’s not so rich.


  40. Fatcat bazooka

    School systems are unionized daycare centers

    The reason taxpayers pay for babysitting is because they don’t want to spend time contributing to the well being of their kids, and so they all leave up to these paid pros that have a daycare union. Regardless of what that mess is, the fiscal revenue mess is not about societies inability to educate, it’s about fatcat lobby groups that want control of the kitty. The fatcats don’t give a shit about the kiddies and that is an irrefutable truth that can’t be swept under any rug, in any American city!

    1. Pixy Dust

      School systems are unionized daycare centers
      Daycare centers are medical facilities.
      Medical facilities are waste disposal plants.
      Waste disposal plants make fertilizer.
      Fertilizer is caca.
      Caca is right-wing talking points that lived in the house that Jack built.

  41. Recycled Teabags

    The solution to all this nonsense is to break schools everywhere into two systems: One system would be composed of teabagger children, indoctrinated by righteous ultra right wing nazi-like retarded fascist “teachers” which would not be unionized — and then the other camp, where children would be educated by unionized teachers that teach peace and love and arts and sciences. Unfortunately, the test scores could never be compared, because the teabag children would obviously cheat like their parents and “teachers” — all of whom would game the system by both inserting “well-educated” volunteers that would use their deep pocket influence to distort all the test (and pay) data, and then protest the results, and then inflame as many people as possible. Teabaggers need to eat more shrimp from the Gulf (PLEASE)!!!!

  42. Nimrod


    I agree with you re: Walker but you’re a bit misinformed about the Wisconsin budget surplus/deficit figures. The tax cuts that Walker recently rammed through the legislature don’t take effect until next fiscal year. They’re effect is not included in the current fiscal year deficit figure quoted by Walker. The quote below (from here: http://host.madison.com/wsj/news/local/govt-and-politics/article_92e0c7e2-3bd8-11e0-861d-001cc4c03286.html) explains the Walker’s deficit math:

    That’s the question being raised by skeptics who cite a Jan. 31 Legislative Fiscal Bureau memo projecting a $121.4 million surplus in the state’s general fund on June 30, the end of the current fiscal year.
    But that figure doesn’t include significant bills that are coming due soon, including about $200 million that Wisconsin has been court-ordered to repay to the state’s medical malpractice fund, and $58.7 million in tax money owed to the state of Minnesota, the LFB said.
    If the entire amount — $258.1 million — were to be paid by June 30, the agency said, the general fund would have a deficit of $136.7 million: the figure Gov. Scott Walker has been citing as one reason for seeking to eliminate most public employee collective bargaining rights.

    1. Yves Smith Post author

      It is not clear that those payments will fall due this year. Please read the actual memo, not reports based on it. Wisconsin is apparently starting down Minnesota on Minnesota’s unilateral revocation of the tax treaty, which is the payment that Minnesota says Wisconsin owes to it. And since states can’t be taken to Federal court, how exactly is Minnesota gonna make Wisconsin pay? Send in Minnesota state troopers with guns to demand the dough? Minnesota has a wee enforcement problem, meethinks.

      Re the $200 million, the circuit court has yet to issue an amount due to the state. The case was remanded back from the Supreme Court in July of 2010. I am wondering (since the case was apparently overturned on appeal) whether the circuit court is sitting on it (which means it will take more legal jousting to get them off the dime). The point is that whether this payment will fall due in the 2010-2011 budget cycle really is up in the air. And as we indicated above, given the projections for economic growth for 2011 (3-4% GDP growth), if these payments don’t fall in this fiscal year, they would take place when the economy, and thus tax receipts, would likely be stronger.

      And as we pointed out, Walker put through corporate tax breaks that make the situation (whatever you think the base line to be) $140 million worse.

      1. IOU

        Of course, this latest giveaway would be in addition to his $4 billion in tax breaks to the rich and big business he’s already proposed. He has yet to explain how he plans to pay for any of these plans, especially troubling given Wisconsin’s existing $3 billion budget deficit. Would he just shut the entire state down, like forever? Would Wisconsin declare bankruptcy? Would he kick everyone off BadgerCare and sell the public school buildings, or what? How else could he make up $7 billion in deficits?

      2. profoundlogic

        “And as we pointed out, Walker put through corporate tax breaks that make the situation (whatever you think the base line to be) $140 million worse.”

        Maybe Walker is preparing for a 2012 run, or a more lucrative position with the vampire squid. He seems to be adept at his backwards accounting skills. If you don’t like the numbers you have, just change the numbers, or in this case give away enough money to your friendly lobby-heavy constituents until there actually is a budget shortfall and you can pin the tail on another donkey.

        Banana Republic indeed!

  43. RS

    the figure Gov. Scott Walker has been citing as one reason for seeking to eliminate most public employee collective bargaining rights.

    1. one reason for seeking to eliminate

    2. most public employee collective bargaining rights.

    Walker has one reason to shut down collective bargaining rights? Was this fully disclosed during the election????? Do tell, please!

    1. razzz

      That’s why he was voted in, Walker with his positions were no secret. Ultimately, voters decided on which direction to head and I don’t read where many voters are complaining about the pending legislation. Just the outside forces nationwide in jeopardy of losing power and money whine about it.

  44. Fr0sty

    Absolutely, let’s tax corporations more, then we can boast the highest corporate tax rates on earth, rather than just the second highest. USA! USA! We’re number one!!! While we’re at it, let’s tax rich people more too. Instead of 95% of total personal income tax, they need to pay 100%. If we doubled the tax rates on the rich and corporations, we could wipe out the 2012 budget deficit in one fell swoop! Then instead of taking the equalivalent of around 10% of GDP the government could have 20% or more! Oh wait, that’s only true if the GDP doesn’t shrink so rates might have to be even higher.

    Next, the government could force corporations to hire more people, because those bastards only care about their bonuses, not the people and that’s why they’re not hiring, everyone knows that! Then the government could force corporations to stay in this country, rather than relocate to more favorable business climates. We could call it treason even, and execute them! That’ll show them! The government could also forbid all the rich people from leaving because you know rich people, they’ll want to keep their money and probably try and move somewhere they aren’t going to be taxed as much. Better yet, why doesn’t the government just take 100% of everything and then give it back to us in a socially just way? I don’t want to have to pay for education or think about things like health insurance or saving for retirement. I’d rather just have the government do it for me, even if I have to give up some freedom. Everyone wins right?

    1. Leave America if you can't contribute!

      Re: “While we’re at it, let’s tax rich people more too.”

      Who there Nelly, what about just trying to get rich people to pay some tax, and start a step at a time, versus letting rich people and corporations continue the game of fucking over all the other Americans that are paying for “their” socialized infrastructure! It would be a real nice change if rich people did contribute!

    2. teabaggers move to China!!

      Re: “While we’re at it, let’s tax rich people more too.’

      Yes, that would be really nice if rich people and corporations would contribute to society by paying some tax (anything is better than the evasion that currently is happening). I realize that some corporations evade taxes and then the people in these pirate corporations also want to evade taxes, so if that means that lots of rich people will move to China, I support that 100%! I guess tax evasion is a big part of the teabagger movement, so why not take that to China as well?

  45. Teabaggers want war

    Tennessee Education Association lobbyist Jerry Winters testified before the committee that the legislation would create “chaos.” He said “people need a collective voice to express their concern.”

    Democratic Sen. Charlotte Burks of Monterey agreed.

    “This bill is terribly bad timing,” said Burks, who voted against the measure. “I think the teachers need to feel that they have every bit of support they can muster.”

    Winters said the legislation, as well as other education reform proposals this session, unfairly targets teachers. He said lawmakers should focus more on issues such as school safety and parental involvement.

    “They’re setting teachers up to fail,” he said. “Let’s at least pat people on the back a little bit and say job well done.”

  46. Michael H

    To all of you Koch shills supporting the pig Walker, what are you planning to do when they outsource your private sector job to India or China?

  47. Huggy

    Them companies are evil that provide you with food clothing and shelter? We need more California style government? Are all of you just joking or do you really believe what you have written?

  48. Huggy

    Info to Michael H above. All the jobs have been outsourced that can be outsourced. Now the idea is to bring in legal aliens for the jobs that require education and illegal aliens to take all the unskilled jobs. As far as I can tell the Unions are supportive of this. Viva la NAFTA.

    1. Michael H

      Your real enemy should be the banksters, politicians and corporate lobbyists behind the $14 trillion bailout of Wall Street, not the unionized garbage collector making $40,000 with overtime. However, in order to deflect anger away from themselves (and the trillions they’ve stolen), the banksters, politicians, and corporate lobbyists would like to convince you that the unionized teacher or garbage collector is your real enemy, and that they are really on your side.

      Judging by many of the comments here, their strategy seems to be working.

      1. Michael H

        Recently spoke to my Mother on the phone, and she asked me if I’d seen all those protestors in Wisconsin and wasn’t it terrible. I didn’t try to argue with her. In her defense, she is 93 years old, suffers from advanced dementia and lives in a nursing home where the attendants keep the TV on FoxNews 24/7.

        But, unless they are Koch shills, what excuse do many of the commenters here have for siding with pig Walker and against the union workers who are simply fighting for collective bargaining and the right to organize?

    2. NaluGirl

      All of the jobs that can be outsourced have been outsourced???????????????????

      Obviously you have not been paying attention. Over the past 15+- years more and more jobs that were thought to be safe have been vanishing.
      It started out as low-end manufacturing jobs, now we are seeing engineering, technical, developemental, IT and even service jobs are going.

      Or maybe you have been paying attention, but live in Chindia.

  49. Froglegs

    Go read Politifact.com dude, there is not a surplus unless you ignore the entire last half of the report that those numbers are taken from.

    Walker is union busting, no doubt, but spreading already discredited misinformation is not going to help your cause.

  50. Buckwheat

    Republicans have a vested interest in busting public unions as explained in this article:


    to wit: “Congressional Republicans are using scare tactics to push a bill blocking bailouts of state pensions as a way to undermine government unions…….It’s not been lost on the Karl Rove crowd that the only group that was able to keep up with them in federal campaign spending was public-employee unions…..the ultimate goal of the Republicans is to prompt local governments to eliminate traditional defined-benefit pensions and replace them with 401(k)-like contributory retirement plans…”

    I don’t have any evidence to back this opinion up, but I would not be surprised to find out that destruction of state and local public employee unions – all over the country – is the latest effort by Republicans at the national level to gain advantage in the 2012 Presidential race and beyond.

    1. gs_runsthiscountry

      The end game in all this is wage compression. And compression of our quasi-caste system here in good ol US of A.

      Examine closely at the 4 min mark as Greenspan is speaking in 2007.


      To paraphrase, American happiness is a measure of how far one as to reach to that next rung on the corporate ladder.

      That is a can-of-worms open to debate and intellectual conversation. However, one thing is certain, if that indeed is the end goal, there would be a hell-of-a-lot of pain getting there. And i highly doubt the top 10% of this country would feel any of that pain.

    2. Palin and walker 2012@aol.com

      the latest effort by Republicans at the national level to gain advantage in the 2012 Presidential race and beyond.

      They do need a few billion and this destruction or disruption of unions would be like a way to increase their leverage. Then of course they need to dupe as many rubes as possible to vote for Palin and fall for all the media campaign with fear and sex. I’m still not sure America on the whole is really that dumb, but if the teabagging nazis take down the unions and steal the election, what else can they do besides mobilize the military against the taxpayers?

  51. Michael H

    Wisconsin workers respond to “fat ass” Limbaugh’s insults on the Ed show:

    MSNBC’s liberal opinion host Ed Schultz went to Madison, Wisconsin for a broadcast on Saturday, to talk live amid an assembled crowd of protesters. He took the opportunity to play the words of Republican radio talker Rush Limbaugh, who in recent days had called the workers “freeloaders” and “parasites,” and suggested they were leading an “anti-democracy movement.”


    1. I love limbaugh 2

      Re: “http://www.rawstory.com/rawreplay/2011/02/wisconsin-workers-respond-to-fat-ass-limbaughs-insults-on-the-ed-show/”

      Please, please … give limbaugh a break, the dude can barely walk or talk, and he has vast health problems and is obviously just angry and venting. Go to any retirement home or dementia facility, this is a normal thing in the social gerontology field and there are a lot of complex dynamics that can cause a person to be really fat and to rant and say mindless things. Essentially it is really sad that corporations pay for his circus act, becsuse he is suffering from neurological imbalances — and if he was categorized as being retarded, many people would find that offensive, yet, because he is sponsored and promoted as entertainment, his “fans”look the other way in denial, pretending that what they here is some sort of sound that has an attractive resonance, but obviously that ringing sound that vibrates is the sociopathic sound of a flute being played by corporate pipers that hope to distort the way people think. As I recall he has a fairly serious drug problem, which combined with alcohol and obesity doesn’t bode well for his fan base or the corporations that are exploiting his conditions.

      1. Buckwheat

        “Please, please … give limbaugh a break, the dude…..is obviously just angry and venting.”

        You – do not – understand. Rush may be venting, but he’s not angry. He’s brilliant. He gets paid $40 million/yr to spew his drivel. He has mastered the art of hate mongering so well that he’ll probably end up a billionaire. He just needs a steady supply of intellectually challenged, white supremacist tea partiers to keep paying his employers bills. The day may come when he also needs a quick exit strategy from the US, once we dumb voters (collectively speaking) realize how far astray we’ve been lead by Limbaugh and others like him.

  52. Dan The Man

    “Weapons of mass destruction”
    “Too big to fail”
    “Axis of Evil”
    “If we don’t fight them over there, We’ll have to fight em over here”
    “The economy would be in worse shape if we didn’t bail them out”

    How many times do you morons need to be lied to!!!

  53. Dan The Man

    Tea Party Alert
    Guys currently the executive to avg employee pay ratio is 300-1 with your help getting rid of unions we could raise that ratio to 400-1

    I would also like to discuss a topic that has been destroying the very fabric of this country, its called minimum wage.

  54. slaves are peeps too

    minimum wage, maximum wage, slavery and fatcats. Obama says those fatcats are bad, then takes lobby money from them and pushes their agenda and helps increase wages for fatcats. It’s like the wrong button keeps getting pushed!

  55. Quilted Northern toilet paper

    What corporations sponsored Walker? Boycott time. If I lived in Wisco, I’d make sure I didn’t help out that sucker in any way!!!

    According to Wisconsin campaign finance filings, Walker’s gubernator­ial campaign received $43,000 from the Koch Industries PAC during the 2010 election. That donation was his campaign’s second-hig­hest, behind $43,125 in contributi­ons from housing and realtor groups in Wisconsin.

    Who are the corporations that need to be reviewed? Anyone have info on other companies?

    Among Koch Industries’ better known subsidiaries across various industries[15] are:

    * Georgia-Pacific paper and pulp company, maker of Brawny paper towels, Angel Soft toilet paper, Mardi Gras napkins and towels and Quilted Northern toilet paper.
    * Invista, a polymer and fibers company that makes Stainmaster carpet, and Lycra fiber, among other products.
    * Koch Pipeline Company LP, that owns and operates 4,000 miles of pipeline used to transport oil, natural gas liquids and chemicals.
    * Flint Hill Resources LP, that operates oil refineries in six states.
    * Koch Fertilizer, LLC, owns or has interests in fertilizer plants

  56. Fattigmann

    ‎5 states do not have collective bargaining for educators and have deemed it illegal. Those states and their ranking on ACT/SAT scores are as follows:

    South Carolina -50th/ North Carolina -49th/ Georgia -48th/ Texas -47th/ Virginia -44th

    …If you are wondering, Wisconsin is currently ranked #2 … Governor Walker, are we now in a race…

  57. Wes

    I do NOT mean to be rude or offensive, and I know this is a more left leaning progressive type of site, but I must say something that has always seemed obvious to me since I began myadult life.

    Taxes are primarily government theft by force. Now I know that many of YOU believe its a social contract, or our duty or its must be done, but that does not change the fact that money is taken from someone who earned it by force and given to someone else. AKA Theft.

    And I was taught from childhood, that theft was wrong, no matter who does it or what their intentions are.

    So whenever I run across an article that seems to put forth the argument that a bankrupt government that cannot pay its bills just needs to steal MORE money to fix the problem, I am stunned.

    When I cannot pay my bills I immediately realize I must have spent too much money and I cut my spending. Now I know that the cable guy and the local restaurant owner might not like it but they must learn to live with it, as I must.

    We are not just a little bit broke, we are absolutely and completely hopelessly unable to ever pay a fraction of the promises that governments all over the nation have promised, and the solution is just to steal more from the people who earned it?

    Again I mean no offense, I am a libertarian so I dislike government theft from anyone, rich or poor, and I am just curious and interested as to why you believe this?

    I am on this site NOT as a troll, I am genuinely curious and interested in hearing apposing views.

    1. gs_runsthiscountry


      First, i consider myself a center leaning libertarian. I wouldn’t believe so reading some of my own writings the past week. I believe there are some aspects of gov that are necessary and should be regulated and controlled by government. (i.e police, fire, military, infrastructure etc.) For example, the idea of privatized roads its poppycock. Anyone, especially truck drivers, that used the “Skyway” outside Chicago years ago knows what happens. High fees and not maintained. Just using that as an example, unless people have no problem with a toll every 100 yards of interstate in this country.

      It boils down to this, both parties are bought and paid for republican and democrat. A libertarian still can get on the ballot in many states. The tea party is a joke, republicans, dick army and Koch bros et al hijacked them already and will slowly outlive their usefulness. As an aside, Barry Rinholz wrote a great piece 2-3 months ago in this vien.

      We have come to a point where it is not about partisan politics any longer, in essence two sides of the same coin, its about realizing what side you are on. It is the working class vs the upper class. I think until the upper-middle class understands they are under attack too, and not one of the elite, the theft, that is the greatest wealth transfer in history, will continue.

      The single worst damaging thing that happened to this country was not the current crisis, it was Citizens United. Citizens United will go down as the single worst Supreme Court decision this country as ever seen. Until it is repealed, or another piece of legislation is put in place to counteract, the theft will continue.

      1. Trestle Rider

        Not just working class against elite class, but pampered class, meaning the bottom 50% who do not pay any meaningful taxes, and the elites, and the ever shrinking middle class. Both the pampered class and the elite class conduct policies that deconstruct the middle class, piece by piece.

        1. gs_runsthiscountry

          The working poor and retired on fixed income are getting hammered with ZIRP, rising rent, food and basics, arguably a tax on another level. However, you are correct, while being penalized, the working poor don’t pay taxes, they are net takers from the system. Those tiered above middle class don’t pay (or much lower) taxes either, if you account for available tax shelters and ability to move money around etc.

          I considered myself middle class (I am now one of those net users of the system, as I am back in college and unemployed) My effective tax rate when I was working, last full tax year, was 16%. Now, it is effectively zero!

          But, how many people, those that we would phase as rich, paid 16% “effective” tax rates? Nothing was more eye opening that filing my taxes last year. I was happy when I signed my taxes, upon my30 min drive home from my CPA I became for furious. Already knowing the system is one thing, having it slapped in your face was a whole nother’ realization.

          I will say this, I firmly believe both parties are responsible for keeping entitlements for the poor in place. The fact of the matter is, tossing the poor a bone, or cookie or two keeps them in line. If you want an example, look no further than what is going on in North Africa. And, Hugo spoon feeds the masses just enough to suppress civil unrest. Meanwhile, do Venezuelans even have electrical power today? Although, they may have enough to eat. Ultimately, the rich don’t care about entitlements for the poor, because they are not paying it, the middle class is. And, there we have it, the misdirected anger at the middle class instead of where it belongs.

          When will we get rid of entitlements for those of on the bottom (myself included) When will we get rid of exemptions for those at the top. When will this country flatten the tax code?

          The answer is WE WONT. The envelope has been signed sealed and delivered, and addressed “Citizens United v Federal Election Commission”

    2. Dan The Man

      Nobody is saying they like taxes regardless of this we are taxed. What people don’t like is the unequal distribution of pain. The working poor of this country whose lives have been destroyed by an elite class do not want to reward this same class a 3rd time with lower tax rates.

    3. Buckwheat

      Wes: Taxes are just dues that we pay for the society we live in. If you’ve ever availed yourself of police or fire protection (even if that just means a lower homeowners premium) or driven on a public road, then you’re getting at least part of what you pay for. Taxes aren’t forcible theft. If you don’t like paying them you can leave the country or drop out of society. In my experience, its easy for people to complain about taxes until they have to live without the things taxes pay for. Go live in Haiti for awhile. Live like the local, non-tax paying locals do. Then come back and tell us how nice it is to not pay taxes.

  58. skippy

    Union busting ya don’t say!

    If that were the case where the hell is the AMA, Bar Association, ADA, AICPA, et al…EH!

    Skippy…Raw Naked Class Warfare…methinks…look they made a real nice pit, just get in it so they can *save America* for frick sack, the oligarchs have sooo much more important stuff to do, its for your country OK, sacrifice is the common mans job, get in the pit of patriotism[!] bring the hole family, invite neighbors and friends, its good for the soul, do it now!

  59. Bunny Pumpkin

    The graph is total biased B.S., just check the rightmost column :-)
    BTW, What’s the unemployment rate among public parasites? Why they retire at 55?
    Your blog will be deleted from my Bookmarks. I’m tired of “useful idiots” Cheers!

    1. Dan The Man

      Boehner is my hero too, all we have to do is find another 637 Billion from the working class and we can pay for the 700 Billion in tax cuts to the ultra wealthy he passed. Hey cuts have to be made these are tough times.

  60. Theo

    What a hoot! It is almost impossible to define and enumerate the marginal product (revenue or productivity) of any job; but to define the product of service workers is impossible. Teachers know this -and it causes those that care a great deal of distress! But clerks and marginal workers – the “working class” – know this as well: I screwed up; I was not blessed, I am hated by God. Whatever! Why can I not get anywhere?!!
    We are in seriously dire straits. Everybody that can has to feel the pain. I sometimes think that no one realizes what a deep hole we are in. Blame and retribution is an on-going thing. But right now we need to cut and re-arrrange. I don’t think that “Tea-Party” people are necessarily against unions; they are against systems that are close enough to their lives that they can influence for being ‘spoiled’. the legal remedies against the banker-boys-girls have largely failed. But the idea of being captive to the unions is hard to swallow – as we are not one great big union.
    (Boehner, et al, comes up with a big (?) $63 B in cuts as the Vp suggests spending $68B on a train.)
    Read the material. Popup a spreadsheet. Show that we are ‘knowledge workers.’

  61. Paul Tioxon

    “First they came for the Communists, but I was not a Communist so I did not speak out. Then they came for the Socialists and the Trade Unionists, but I was neither, so I did not speak out. Then they came for the Jews, but I was not a Jew so I did not speak out. And when they came for me, there was no one left to speak out for me.”

    Dietrich Bonhoeffer




  62. mb hayes

    I’ve created a blog post with links to primary documents that should help you understand the numbers in Wisconsin. http://mbreads.blogspot.com/2011/02/wisconsin-budget-numbers-links-1.html.

    The numbers are all estimates and as far as I can tell, the $3.6 billion deficit number for the next budget given by the Governor is on a worst worst case basis. In the same document that gives this number, a second estimate puts the deficit at $645 million. Both of these estimates are based on agency requests and the governor and legislature absolutely will reduce the amounts during the budget process. The current budget(2010-11) had close to a $6 billion deficit at the beginning of the process.

    It looks like that budget(2010-11) has a $121 million surplus with two large obligations looming. Wisconsin owes about $50 million to the state of Minnesota for payments concerning a tax reciprocity agreement. In addition, in the 2007-09 budget, $200 million was transfered to the general fund from a segregated fund. The Wisconsin Supreme court found that transfer to be illegal and it looks like those funds will have to be returned. Add it all up and the current budget has about a $130 million deficit.

    Wisconsin’s budget is about $30 billion a year. So that is $60 billion for the past 2 years. (It is a bit more than that, I’m simplifying the numbers) 0.150/60 billion = 0.0025. 0.0025 x 100= .25% shortfall. That is some pretty decent budgeting considering the fiscal mess we’ve had for the past years.

    To Yves and all who know this area. The Wisconsin Retirement System has $79 billion and the state agency administers it with $30 million taken as fees. (the rate is set by legislation)

    What I found interesting, In 2009, $204 million went to the board’s administrative expenses that by statue are not included in the budget appropriations for the agency. “These types of expenditures include custodial and banking fees, legal fees, investment consulting fees, and external management fees.”

    What are those fees for? Is this typical? Can someone detail how these payments work? I’d love guidance on how to find the documents that show who received these payments.

    Based on the Wisconsin Pension System Report and the Dean Baker Pension document, Wisconsin’s pension system is close to fully funded. Baker says 99.8%. On pg 50 of the Wisconsin Report, you will find a chart of the total unfunded pension liabilities which shows that this obligation was greatest in 2000 and has steadily declined through 2009 to 10% of what it was in 2000. On the same page, it says that the State of Wisconsin has NO unfunded pension liabilities. It also says that 1223 of the 1469 entities (municipalities, school districts) have NO unfunded pension liabilities. Looks pretty good to me! Am I missing something?

    This entire budget crisis is mostly about medical costs. We should be discussing those numbers and the medical industrial complex. Making this about Wisconsin State employees, municipal employees and teachers is unfair.

  63. mb hayes

    I’ve created a blog post with links to primary documents that should help you understand the numbers in Wisconsin. http://mbreads.blogspot.com/2011/02/wisconsin-budget-numbers-links-1.html.

    The numbers are all estimates and as far as I can tell, the $3.6 billion deficit number for the next budget given by the Governor is on a worst worst case basis. In the same document that gives this number, a second estimate puts the deficit at $645 million. Both of these estimates are based on agency requests and the governor and legislature absolutely will reduce the amounts during the budget process. The current budget(2010-11) had close to a $6 billion deficit at the beginning of the process.

    It looks like that budget(2010-11) has a $121 million surplus with two large obligations looming. Wisconsin owes about $50 million to the state of Minnesota for payments concerning a tax reciprocity agreement. In addition, in the 2007-09 budget, $200 million was transfered to the general fund from a segregated fund. The Wisconsin Supreme court found that transfer to be illegal and it looks like those funds will have to be returned. Add it all up and the current budget has about a $130 million deficit.

    Wisconsin’s budget is about $30 billion a year. So that is $60 billion for the past 2 years. (It is a bit more than that, I’m simplifying the numbers) 0.150/60 billion = 0.0025. 0.0025 x 100= .25% shortfall. That is some pretty decent budgeting considering the fiscal mess we’ve had for the past years.

    To Yves and all who know this area. The Wisconsin Retirement System has $79 billion and the state agency administers it with $30 million taken as fees. (the rate is set by legislation)

    What I found interesting, In 2009, $204 million went to the board’s administrative expenses that by statue are not included in the budget appropriations for the agency. “These types of expenditures include custodial and banking fees, legal fees, investment consulting fees, and external management fees.”

    What are those fees for? Is this typical? Can someone detail how these payments work? I’d love guidance on how to find the documents that show who received these payments.

    Based on the Wisconsin Pension System Report and the Dean Baker Pension document, Wisconsin’s pension system is close to fully funded. Baker says 99.8%. On pg 50 of the Wisconsin Report, you will find a chart of the total unfunded pension liabilities which shows that this obligation was greatest in 2000 and has steadily declined through 2009 to 10% of what it was in 2000. On the same page, it says that the State of Wisconsin has NO unfunded pension liabilities. It also says that 1223 of the 1469 entities (municipalities, school districts) have NO unfunded pension liabilities. Looks pretty good to me! Am I missing something?

    This entire budget crisis is mostly about medical costs. We should be discussing those numbers and the medical industrial complex. Making this about Wisconsin State employees, municipal employees and teachers is unfair.

  64. mb hayes

    I’ve created a blog post with links to primary documents that should help you understand the numbers in Wisconsin. http://mbreads.blogspot.com/2011/02/wisconsin-budget-numbers-links-1.html.

    The numbers are all estimates and as far as I can tell, the $3.6 billion deficit number for the next budget given by the Governor is on a worst worst case basis. In the same document that gives this number, a second estimate puts the deficit at $645 million. Both of these estimates are based on agency requests and the governor and legislature absolutely will reduce the amounts during the budget process. The current budget(2010-11) had close to a $6 billion deficit at the beginning of the process.

    It looks like that budget(2010-11) has a $121 million surplus with two large obligations looming. Wisconsin owes about $50 million to the state of Minnesota for payments concerning a tax reciprocity agreement. In addition, in the 2007-09 budget, $200 million was transfered to the general fund from a segregated fund. The Wisconsin Supreme court found that transfer to be illegal and it looks like those funds will have to be returned. Add it all up and the current budget has about a $130 million deficit.

    Wisconsin’s budget is about $30 billion a year. So that is $60 billion for the past 2 years. (It is a bit more than that, I’m simplifying the numbers) 0.150/60 billion = 0.0025. 0.0025 x 100= .25% shortfall. That is some pretty decent budgeting considering the fiscal mess we’ve had for the past years.

    To Yves and all who know this area. The Wisconsin Retirement System has $79 billion and the state agency administers it with $30 million taken as fees. (the rate is set by legislation)

    What I found interesting, In 2009, $204 million went to the board’s administrative expenses that by statue are not included in the budget appropriations for the agency. “These types of expenditures include custodial and banking fees, legal fees, investment consulting fees, and external management fees.”

    What are those fees for? Is this typical? Can someone detail how these payments work? I’d love guidance on how to find the documents that show who received these payments.

    Based on the Wisconsin Pension System Report and the Dean Baker Pension document, Wisconsin’s pension system is close to fully funded. Baker says 99.8%. On pg 50 of the Wisconsin Report, you will find a chart of the total unfunded pension liabilities which shows that this obligation was greatest in 2000 and has steadily declined through 2009 to 10% of what it was in 2000. On the same page, it says that the State of Wisconsin has NO unfunded pension liabilities. It also says that 1223 of the 1469 entities (municipalities, school districts) have NO unfunded pension liabilities. Looks pretty good to me! Am I missing something?

    This entire budget crisis is mostly about medical costs. We should be discussing those numbers and the medical industrial complex. Making this about Wisconsin State employees, municipal employees and teachers is unfair.

    1. Impeach Walker Now!

      State Senator Mary Lazich (R-New Berlin) didn’t sound any alarms in the recent audit, so why is there a financial panic? That is interesting that Walker is pushing an agenda for teabaggers to cause nationwide trouble. They need to impeach him immediately!!!

      The Legislative Audit Bureau is a nonpartisan legislative service agency that assists the Wisconsin Legislature in maintaining effective oversight of state operations

      The only problem in Wisconsin is Walker — IMPEACH him!

  65. Impeach Walker & Boycott

    The most recent impeachment of a governor occurred on January 14, 2009, when the Illinois House of Representatives voted 117-1 to impeach Rod Blagojevich on corruption charges;[19] he was subsequently removed from office and barred from holding future office by the Illinois Senate on January 29. He was the eighth state governor in American history to be removed from office.

  66. Dave

    The “public” are rightfully pissed that they have no one representing their best interests. Congress works for themselves and for corporate America, both parties have helped create a lucrative system that addresses their own needs, Organized Labor (of which I am one) have learned how the system works and have managed to protect their interests, while those who are responsible to “the public” were too interested in their own interests to negotiate from the perspective of what is best for citizens in general.

    Now, politicians (especially Republicans) are trying to use envy and outright hatred to destroy the only organized labor groups left capable of defending their own intersts so that Big Business and Big Money will have absolute free rein over the nation.

    Anyone who uses fear, resentment, hatred and envy as a tool to manipulate citizens is not a friend of democracy. They are simply trying to divide and conquer.
    There is a very old saying that comes to mind.
    Sow the Wind. Reap the Whirlwind!

    I am ashamed that our political leaders have stooped to tactics that I fear will result in actions by extremists of both parties that will put liberty at risk and will present our own police and firefighters with increased workloads and attendant risks.

    Having lived (and worked)through the turbulent 60’s I have seen up-close where fear/hate mongering gets us and I am ashamed of our political leaders that they are all but egging the mobs on today. The likely result will be the loosing of the fringe nut-cases on both sides taking inappropriate actions that they see as the only possible response. Innocent citizens and public safety workers will be again directly in the line of fire.

    The change from the 60’s to today is that the exxtremists are now better armed, more likely to go to extremes and feel more “entitled” to act on their wacky beliefs.Shame on our politicians for not bringing us together as a nation in these perilous times.

    Forgive them Lord, for they have no sense of shame.

Comments are closed.