One thing I like about Governor Scott Walker is that he reclaimed the excellent English word “forward” – which is the state motto of Wisconsin – before President Obama decided to use it as the theme-word for his 2012 campaign. I also like Walker’s policies and the quiet, dogged way he works. But the “forward” theme is important. Wisconsin has moved forward, and it needs to move further forward. How? By getting government off people’s backs.
I wonder, myself, how much further Wisconsin could have gone by now if it had a better regulatory environment. In 2011, Forbes ranked Wisconsin 35 out of the 50 states for regulatory environment. The Small Business & Entrepreneurship (SBE) Council ranks Wisconsin 24th overall in its Small Business Survival Index, but says Walker has been making improvements. Wisconsin ranked 34th in the SBE Council’s 2011 study in “Taxation,” with high personal income taxes, corporate income and capital gains taxes, property taxes, and fuel taxes.
Walker has indeed made efforts to streamline and reduce regulation; he’s getting a lot of criticism for it. But the bureaucratic, statist regulation favored by progressivism is well entrenched in Wisconsin and has been for a long time – Wisconsin having pioneered it. The Badger State has a ways to go to be a more jobs- and business-friendly environment. If you want to know why “only 30,000” jobs (see more below) have been created in Wisconsin (while unemployment has somehow managed to drop from 7.7% to 6.8% under Walker), look to the regulatory and tax environment.
I wrote last year, during the legislative crisis in Wisconsin, about the importance of the showdown with the unions for the future of government and progressivism in the US. My thoughts from that period remain pertinent:
Because political “factions” often objected to being regulated in the manner proposed by progressives, the creation of agencies was intrinsic to the progressive agenda. The agencies were sold to the public as a means of taking the corrupt politics out of issues that ought to be decided straightforwardly by disinterested experts. The progressive idea has always been that this stable of public experts should be insulated from the demands of interest groups – even if the interest group in question is a majority of registered voters.
The Wisconsin Republicans are challenging that idea directly. The vociferous political left isn’t wrong about that: the crisis in Wisconsin is a power struggle for the future of government, not just a clash of this year’s fiscal priorities. If the voting public can, in fact, deny professional autonomy – in this case, the option to organize for collective bargaining – to public employees, the essential premise of progressivism is badly undercut. Public employees, in their professional capacity, would not then have a “right” to anything the voters don’t choose to accede to.
But there is a danger in focusing too exclusively on the benefits and negotiating privileges of the government-worker unions. It is certainly important to prevent them from bleeding the productive private sector dry, but that alone won’t balance the budgets in most badly overspent states (e.g., California, New York, Illinois), nor will it release the states’ economies to revive and flourish.
Government-worker benefits aren’t going to go away, and even cutting them on the margins won’t relieve California, for example, of a meaningful amount of its unfunded pension obligations. The future “pie” has to be enlarged. And in that regard, authorizing government regulators to overregulate is even worse than suffering government-worker benefits to over-increase.
Spiraling state debt and credit downgrades are symptoms of overregulated economic atrophy, as much as they are of fiscal irresponsibility. We could afford a lot more public expenditure – without going into debt – if we reduced the regulatory burden on the economy. (We also wouldn’t need as much public spending, even by the standards of our welfare state.) But we haven’t lifted the regulatory burden on a national basis for nearly 30 years; we have only increased its weight. Besides the environmental measures linked above, Wisconsin under Walker has joined a few other states in lifting some regulations on the telecommunications industry, but the colossal juggernaut of government regulation has barely been touched by most state reform efforts, including Wisconsin’s.