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Showdown

California and New Jersey. Big state, small state. Opposite sides of the country. Exceptionally different states, but with some significant similarities. Especially politically.

In the past few years, both states suffered exceptionally bad economic downturns. And both states chose to toss out their corrupt Democratic machine governors and replace them with populist Republicans -- Arnold Schwarzenegger and Chris Christie.

Now that their fiscal crises seem to be on the verge of utter collapse, both governors are proposing radical measures to save their states. And now, both governors are being threatened by the source of some of their respective states' biggest fiscal problems.

In both states, some of the biggest expenses are the state employees. In salaries and benefits, they are massive fiscal liabilities. And especially in pension benefits.

Naturally, the unions representing these public employees are fighting back. After all, this talk about "cutting costs" is money that won't be going into their voluminous pockets. And -- as is typical of unions -- they're going the thug route.

In California, they're making threats (slightly veiled) against Schwarzenegger and his family.

In New Jersey, they're being slightly more subtle. They're making "joking" prayers for Christie's death, and the teacher's union had a rather unique response to this week's public vote on school funding. They decided that all students would have a mandatory homework assignment: to interview their parents about the election, if they intended to vote in it, and why.

Let's put this in more descriptive language: you're a parent. Your kid comes home and says that they have to ask you if you plan to vote, why you intend to vote (but not "how;" that should be readily inferred from the answer to "why"), and report that information back to their teacher -- or the kid gets a failing grade on their 'homework."

The message is clear: screw the secret ballot; we're going to find out who's with us, who's against us, and if you don't tell, we'll punish your kids.

That didn't go over too well. New Jerseyans (New Jerseyites? Whatever) turned out in record numbers, and shot down hikes in school spending all over the state.

One solution I've heard batted around for both states has some appeal to me. The governors invite the heads of the public sector unions (who, to my mind, have no right to exist anyway, but they're here and gotta be dealt with) and told that payroll and benefits and pensions are now combined into one single budget item. Then invite them to suggest how best to divvy up that lump sum -- how much to retirees, and how much to current employees. And also have a chart showing just how big a percentage of the entire state's budget that represents -- it's usually the majority.

This is not simply a game, or a way to provide political cover for both governors. It's meant to send a simple message to both the unions and the public -- the states simply don't have infinite resources. There is only so much money to go around, and "taking it from the taxpayers" is no longer an option.

Public employees tend not to worry about tax burdens. They are the beneficiaries of increased state spending. They know that whatever they pay, they get at least a hefty hunk of it back. It all balances out, pretty much, for them.

Alternately, both states could just collapse financially. That's never happened before, and the amateur political scholar is intensely curious to see how that would play out.

But it isn't a simple theoretical exercise. Literally millions of people would suffer, and suffer badly, should that happen. And while I do believe that "people tend to get the government they deserve" and the voters of those two states have been enabling the scumbags (largely Democratic, but I'm certain a few Republicans played their parts) for years, I'd still hate to see that many people devastated by the all-too-predictable consequences of their decades of mismanagement and short-sightedness.

I only hope it's not too late for those two states, and those two governors can achieve the nigh-impossible.

If not... what's that old Chinese curse about interesting times?


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Comments (16)

Interested in how it would ... (Below threshold)
bobdog:

Interested in how it would all play out?

Simple. Both states voted Democrat. Union jobs are at stake. There's not a moment to lose!

Try to tell me this is NOT how it will play out:

In a nationally televised speech, Obama would declare another "fiscal disaster" (what are we up to now? Crisis Number 35?), trot out some stupid anecdote about poor Louise, a destitute, legally blind, black Lesbian handicapped teacher with Parkinson's and 16 grandkids, and wail about the looming crisis we all face if California and New Jersey are allowed to fail. He would weep on television for all of the police and fire jobs that will have to be eliminated to make the union pension payments.

Congress, in turn, would declare a fiscal crisis and jam through yet another porkbarrel "Rescue" bill, on a strictly party line vote, and shovel several hundred billions -- on a loan basis, of course, to be paid back with interest some day -- into the states' pension funds and union management salaries.

Back in California and New Jersey, unions will threaten to strike for higher wages, improved medical care, more time off, and better pension benefits, all of which will be granted by their state legislatures.

Saved in the nick of time. Disaster averted.

Illinois pulled this rabbit out of a hat a couple of years ago, threatening to fire police and firemen all over the state, release prisoners, and toss mental patients and old people out of shelters all over the state. Predictably, most of the tax increases went right into teacher union salaries and pensions, which continue to be massively underfunded.

Slicker than a game of Three Card Monte on 42nd Street.

New Jersey has a Governor w... (Below threshold)
Justrand:

New Jersey has a Governor with BALLS! And so they have a fighting chance.

Out here in the People's Republic of Kalifornia we have a neutered RINO who refuses to buck the out of control Legislature. WE are doomed!

"I only hope it's not to... (Below threshold)
JLawson:

"I only hope it's not too late for those two states, and those two governors can achieve the nigh-impossible."

Seems to me like Christie's going about it the right way. He's explaining that the state is out of money, that raising taxes will cause more buisness to go away, and that there MUST be a cutback if the state's economy is going to survive. And it's going to hurt - here's why it's hurting, and how we got to the point where it hurts so much, and what has to be done in the future to keep it from hurting again. For decades the people have been lied to - told there's always more money from somewhere - and there's now no money left, no chance of getting more, and the ONLY thing to do is cut way back.

There will be much screaming and crying - but if the choice is cutting back or having an entire state that resembles Detroit, which will the people actually choose? (Because it seems that in NJ they still have a choice.)

The Governator? Not so much. He's got too many people who're emotionally invested in what got the state where it is today. It's going to be VERY hard to override them, and businesses and 'the rich' are already finding other states to set up that are more to their liking. Will the voters turn things around? Will the politicians ALLOW them to turn it around?

Wait and see... and watch as another fine example of the law of unintended consequences paints itself right in front of our very eyes...

Not to worry, California is... (Below threshold)
Matt:

Not to worry, California is to big to fail. Since the IMF bailed Greece, it will likely bail out California. Can the other 49 states vote to require CA to secede from the union?

Both of these states are sh... (Below threshold)
Hank:

Both of these states are shining examples of what happens with liberal democrat governance.

It's best summed up by the title of a Reason Magazine article everyone should read: How public servants became our masters.

See: http://reason.com/archives/2010/01/12/class-war/

This is also the model Obama is using for the federal govt.

Unions used to serve a purpose when most unions were in the private sector. They've long since outlived their purpose. They're going to be the financial death of the country. I'd suggest a trip to Greece for an up close look into what our future may hold.

Why doesn't the citizenship... (Below threshold)
914:

Why doesn't the citizenship just bring thier pitchforks, storm the castle and stick the piles of shit with rusty tines, toss it onto the manure wagon and dump it in a gravel pit?

Oh yeah, were somewhat civilized

"Can the other 49 states vote to require CA to secede from the union?"

Yes but that still leave's 7 states out in the dark.

The difference between Ca. ... (Below threshold)

The difference between Ca. and NJ is one Guv played a man in movies while the other acts like one in real life.

Unions = Brownshirts. Sieg ... (Below threshold)
Michael:

Unions = Brownshirts. Sieg Obama!

RE: "I only hope it's not t... (Below threshold)
kevino:

RE: "I only hope it's not too late for those two states, and those two governors can achieve the nigh-impossible."

Not possible in CA, and there is no reason to: CA is "too big to fail". Why should they struggle to dig themselves out of the mess that they created when Washington will fix their problems for nothing.

The probability of NJ solving it's fiscal mess is better, but not much better. Yes, they have a governor who wants to straighten it out, but Democrats control just about everything else, and they'll fight to the end. And when NJ sees CA getting bailed out (and CA will fail first), then NJ politicians and the many of the citizenry will opt to sit back, relax, and let Washington solve their problems, too.

Why struggle when Washington will make it all better with no effort? It's the liberal way.

I'm not optimistic. 10,000 ... (Below threshold)
bobdog:

I'm not optimistic. 10,000 teachers descended on the state capital just today in Springfield, Illinois, demanding "their money". Rush spent some time talking about it this afternoon. It seems they want more of it. Again.

The state is already insolvent, largely due to public salaries, healthcare and pension liabilities, withholding tax refunds from taxpayers, and the state is unable to pay its bills. And teachers are demaning "their money".

These same teachers will be in the front of the line complaining about tax increases, made necessary by their own incessant demands for more and more money.

Like a nest full of hungry baby birds.

Screw 'em. I want MY money.

One thing I regret about mo... (Below threshold)
SCSIwuzzy:

One thing I regret about moving back to PA last year... I didn't get to vote for Christie.
But since I still pay them 5k in property taxes every year, I can still hope to benefit from his administration.

I don't worry about CA beca... (Below threshold)
jim m:

I don't worry about CA because there is no way the dems or the GOP will let it fail.

It should fail. Screw the poor people of Ca. They voted for this shit. They made their state the cesspool of corruption and the socialist hell hole for businesses that it is. Businesses are fleeing the state. The government is trying to screw those who haven't or can't leave. For people like me in a health care field, they have made it impossible for me to find work there with the impossible licensing rules. I couldn't move there and do what I do even if I wanted to. I have loads of family there but would never dream of moving there.

They have voted for rules that have crushes business. They have voted for rules that have killed productivity. They have a bloated government and unions that don't give a rat's ass about the public except that they want the public to pay more taxes.

I have no pity for Ca. If they want to fix it maybe they should start selling their assets. Maybe they could sell San Diego and southern Ca to AZ. Maybe OR would like some of No. Ca?

Best thing that could happen for those areas would be for just that to happen.

Jim m's prescription is har... (Below threshold)
Jay Guevara:

Jim m's prescription is harsh but fair.

California has patriotic Americans, such as myself, and we're going to get screwed along with the liberal cockroaches who moved here and caused this problem.

Nevertheless, California has to take its medicine, and should not be bailed out under any circumstances. Maybe the liberal cockroaches will learn something (damned unlikely) or move elsewhere (great - I hear Tierra del Fuego is lovely) and give us Americans back our beloved state.

California may be the first... (Below threshold)
Jim Addison:

California may be the first to suffer the worst of fiscal crises, but will hardly be the last. Many states have these unrealistic employment levels in government, with unsustainable benefit packages and pensions they will never be able to pay.

Many of us as young people out of college remember our first credit cards, running up bills to the point where we said, "Whoa! this is adding up!" and coming to grips with reality. The problem is our federal government - and many state governments, despite having balanced budget requirements in their constitutions - never learned the lesson. They continue to spend as if tomorrow never comes, bringing the mail and new bills.

The longer we put off setting the accounting in order, the more painful it will be for more people.

Unions are too big to fail ... (Below threshold)
olsoljer:

Unions are too big to fail - maybe the government should run them. (s)

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