February 20, 2011
TIME FOR THE THIRD MODEL:
The Madison Blues (Walter Russell Mead, 2/18/11, American Interest)
The Battle of Madison is part of a national struggle over the future of American society. The public sector unions and their allies believe in what I’ve called liberalism 4.0, the twentieth century’s dominant set of progressive ideas. It was the ideology of a society made up of big unions, big corporations and big government. The Big Three car companies, Big Three networks and the Big One phone company (back when AT&T had a legal monopoly on providing telephone service) were held in check by government regulation and union power rather than by free competition.Technological change, global competition, and the rise of a more dynamic economy have wrecked the old social model, but old institutions, old habits of mind and old interest groups don’t disappear overnight. In many ways, public sector unions and government employees are the last great citadel of the Blue Social Model and what we see in Madison (as well as Ohio and Tennessee) is a way of life fighting for survival in the last ditch. We should not be surprised that the battle is fierce, the tactics ruthless, the polarization intense: this is not just a struggle between interest groups, it is a conflict over basic ideas about how the world does or should work.
Regardless of what happens in Madison this week, it is a hopeless battle. 4.0 liberalism and the Blue Social Model aren’t immoral and they helped many Americans enjoy roughly two generations of unprecedented prosperity — but they are unworkable in the contemporary world. States that don’t make the kind of changes that Wisconsin seeks will face the problems that loyally blue Illinois does now: staggering pension bills that undermine the state’s credit and cripple its ability to attract and hold business. An article in the New York Times, that bastion of blue thinking, mocks Illinois’ latest plan to pay its current pension bill with a $3.7 billion bond issue. Note reporters Mary Williams Walsh and Michael Cooper, Illinois “is essentially paying a single year’s bill by adding to its already heavy debt load. That short-term thinking is not unlike Americans taking out home equity loans to pay for cars and vacations before the housing bust.”
However much money the public sector unions fling into the maw of Democratic party politics, the old system is going down. Workers will actually do better in states that act quickly; the longer the day of reckoning is postponed, the higher the bill will be, and the more savage and draconian the cuts will have to become.
But if the blue social model and 4.0 liberalism are losing, what will take their place?
The de-unionization of a civil service that never should have been allowed to organize in the first place and defined contributions instead of defined benefits.
