New Directions in GOP Political Economy

How capital smashes labor, in two sentences.

Quite subtle, actually:

Public-sector collective bargaining is unhealthy and distorts democracy because it enables workers to influence the government which negotiates with them; but

Unlimited and secret corporate political campaign contributions are necessary to democracy because they enable corporations to influence the government which regulates them.

Discuss.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.

31 thoughts on “New Directions in GOP Political Economy”

  1. “Unlimited and secret corporate political campaign contributions are”, I’m fairly certain, illegal. Unless perhaps we’re talking about in kind contributions by media corporations… Perhaps you’re confusing contributions with independent expenditures?

    What would be the business parallel to a public sector union? A cartel among government contractors, I suppose.

  2. Brett, I may regret asking this, but why should political contributions be secret? What are those people afraid of? That I would show up at their door, asking for money?

  3. Simple/Crazy – the way the Republican brand knows it can pull in base and unassuming votes every election cycle! (Remember, if Obamacare were outlawed, only outlaws would have Obamacare!)

    Simple/Crazy – best political rhetoric and strategy for an electorate vastly uninformed to begin with. No collective wisdom here, say and do and rule the way we want to, we are the haves and you are the have nots who are ill-informed, so who cares who in government we buy!

    But you trade unionists, yes, it sounds dirty merely saying trade unionists, you are collaborating in public, must be troublemakers, parasites, socialists. You Middle Class, you should know your miserable place and die there!

    Sean and Dan Stanley, I agree with your quick observations.

  4. I think Brett is correct – this is not a strong analogy and I’m also pretty sure Zasloff is simply wrong about the content of current campaign finance law.

    NCG, I think you didn’t actually read Brett’s post.

  5. Just to clarify one thing: “unlimited and secret corporate political campaign contributions” can be to an independent exependiture committee. They are still political campaign contributions — just not to the candidate’s committee. Giving money to American Crossroads, or any other 527 for that matter, is still a political campaign contribution. Trolls will have to do a little better than that.

  6. It is now possible to give an unlimited and undisclosed amount of money to Americans For Fluffier Kittens, and for AMFK to then spend the money promoting your favored candidate or position and defaming the opposition. Even better, it doesn’t have to be your money; if you are a corporate honcho, you can give your stockholders’ money, instead, especially because there’s little scrutiny and because even a big political expenditure has no significant effect on the bottom line of a big company (though there is some risk of disclosure when you play with the company’s treasury, so you are less guaranteed of keeping your fingerprints off of your propaganda there. Brett is technically correct that this money cannot be directly controlled by the candidate, but that’s picking nits. We do now have unlimited, anonymous campaign spending.

  7. I have problems with the whole notion of public sector unions necessarily having a conflict of interest with government. Just because they are a constituency paid by government, they are not guaranteed any other special privileges than private constituencies, which Jonathan correctly points out.

    It is a slippery slope fallacy to assume that because unions can argue for better pay, and better pay can buy more representation, thereby acquiring better pay, a corrupt feedback loop is created. The obvious problem with this is that there are numerous checks on union power, not the least of which is the fact that government officials are democratically elected. This argument generally rests on the notion that political speech is necessarily corrupt.

    Yet, this applies just as well to private political speech. Enter Jonathan’s suggestion that private corporate speech has just been given an enormous boost, generally by the same folks who are now decrying unions.

    Another argument on the right – one I heard just today – is that unions were responsible for the destruction of private sector jobs, and now they’re doing the same to the public sector. This is absurd in numerous ways. For starters, even assuming that unions were responsible for job losses due to pay demands, workers would never have been able to compete with third world labor. Yet what happened to the productivity gains when those jobs were done more cheaply? How has that “trickled down”? And if there had been no unions, and if workers somehow would have been able to compete, where would the productivity gains have gone then?

    Yet the public sector can’t outsource its services. So how would unions be able to destroy that sector? Are public workers making too much? I think that’s pretty subjective. I certainly don’t feel like they are getting anything more than they deserve. Are other workers getting what they deserve Probably not. But whose fault is that? By cutting taxes on the rich, are those “productivity gains” going to trickle down too, just like they did in the private sector?

  8. This past year, the Chamber of Commerce functioned as a slush fund for corporate donations. It was secret in the sense that most could not see where precisely the money was coming from when it ended up with the C of C.

  9. Zasloff…

    You are ripping the phone right out of Governor Walker’s hand.
    Did you listen to that radio drama?
    Who says Orson Welles is dead eh?

    Have you ever heard a more efficient debriefing between a one-star governor and his billionaire Admiral? Walker was absolutely stunningly brilliant. The eager, but restrained acolyte, who dares to stand ever so humbly on Reagan’s shoulders, and files his report with such brutal sureness, that it ought to be model for success in business schools. The Admiral only has to grunt here and there, and the presentation continues on, formal, measured, analytical, precise. The young kid has talent. Invite him to Christmas dinner talent. Like a Capra movie: Cigars and snow outside, servants, brandy, the Board and Mr. Murdoch and his Chinese wife. Quite the soiree…

    And on a close moral tangent…

    Has there ever been such a recorded conversation in American history before? That Governor Walker shows his face in public after being exposed as a billionaire’s eager sycophant is absolutely stunning. But there doesn’t seem to be a hint of shame anywhere in sight. That’s an interesting insight; and might be argued, measures how debased American Democracy and character have become. Think about it: If Walker is not recalled we are living in a overt oligarchy. Where governors are openly beholden to billionaires. And that’s a far different beast than a covert oligarchy. This is a big step. A telling moment in American history. And it is starting to look like a big fail….

  10. koreyel: I’m trying to remember the last time a GOPer showed any shame for getting caught with a hand in the cookie jar or with trousers dropped. Tom Delay’s mugg shot comes to mind but shame or contrition? I can’t recall it happening in recent history.
    These guys believe they should rule by devine right and this democracy stuff has just been an inconvieniant bump in history that God and the iron fist of unlimited money will shortly straighten out.

  11. Eli, the argument is essentially that public sector unions are in a tacit conspiracy with the politicians they ‘negotiate’ with: Rather than being an arms length negotiation between government employees and people representing the interests of the taxpayers, unions in the government sector function as a way for the group of politicians they support, (Henceforth referred to as “the Democratic party” to launder tax revenues. Democrats ignore the public interest, (Or simply rationalize that electing Democrats IS in the public interest, and so anything that furthers that end is, as well.) putting a heavy thumb on the scale in favor of unionization, (Accepting card check, for instance, instead of letting the workers have secret ballot votes.) and then taking a dive in the subsequent bargaining, in return for a substantial fraction of the dues money being diverted to the Democratic party, and campaign workers. (Often working during their nominal hours.)

    Sure, it’s an inefficient way of converting tax dollars to campaign funds, but money laundering IS usually inefficient, and who cares, it’s the public’s money, not the politicians’ money.

    Now, you probably think that argument is a load of crap, at the same time as thinking that the exact same argument is true of, say, defense contractors… But it’s still the argument I’m hearing expressed.

    As for the analogy to corporations, a public sector union consists of everybody supplying a particular sort of labor to a unit of government getting together, (With mechanisms for policing dissenters who might otherwise opt out.) and negotiating for higher pay, better benefits, easier work conditions, and help in enforcing the organization, using the threat of denying that unit of government ALL labor of that particular sort.

    If the government is going to buy widgets from a private sector corporation, (Photocopiers, say.) it’s unlikely in the extreme that all manufacturers of said widget will band together in a cartel, and demand from the government better prices and assistance in enforcing the cartel, with the threat of otherwise making sure the government can’t buy any photocopiers from anybody, even competitors who refused to join the cartel. And in that unlikely instance, the organizers of said cartel would end up in jail.

    So an analogy between unions and corporations is pretty weak, in as much as if the government decides it doesn’t want to buy HP printers at a monopoly price, it’s not going to find that Citizen or Brother refuses to sell it printers, and Lexmark’s corporate headquarters get firebombed the day after they submit their bid.

  12. it’s unlikely in the extreme that all manufacturers of said widget will band together in a cartel, and demand from the government better prices and assistance in enforcing the cartel, with the threat of otherwise making sure the government can’t buy any photocopiers from anybody, even competitors who refused to join the cartel. And in that unlikely instance, the organizers of said cartel would end up in jail.

    And is it also unlikely that all oil companies would band together to fight for special tax breaks, by supporting (usually) Republican politicians who will favor such breaks? Is it unlikely that all pharmaceutical companies will band together to maintain their various privileges by supporting (usually) Republican politicians who will favor such privileges? Is it unlikely that all the firms in any industry would band together to reduce regulation of their industry by providing support and contributions to (usually) Republican politicians who will favor such reductions?

    And just because there is competition in some areas of government contracting doesn’t mean there is competition in all areas, or much of it. How many airplane manufacturers are there, after all? And do those individual companies not seek political advantage? What are all those lobbyists doing in Washington, do you think?

  13. Bernard didn’t even mention the military industrial cartel colluding with the “Defense Department”, nor the odd fact that other than Madoff, nobody at the top in the financial services sector has served or will serve time for blowing up the economy; indeed profit further now.

    And then we have the telco/cable collusion on net discrimination, and hum, the “entertainment” cartel.

    Brett’s primary function here (and now again at Crooked Timber, successful labor mobilization chafes him dreadfully, much to our amusement) is the preservation of the perks and prerogatives of the US’s oligarchical incumbents. That’s it. That’s what he does.

    His campaign, however, falters completely. If the oligarchs could inject a little market competition in their tools, we’d get more variety here, even possibly with enhanced competence. But that’s not what they do, sigh.

  14. Labor unions, generally, represent people on the lowest rung of a bureaucratic hierarchy. Managers, even on the next lowly rung up, are normally barred from union representation. And, although a union may require union dues from everyone it represents, its capacity require the cooperation of either its members or its beneficiaries is limited to the point of non-existence.

  15. Brett, the second argument you are making, that unions represent a sort of cartel that is able to monopolize their industry, is circular. Of course they are a monopoly! They are employees of the state. The state is not then buying widgets from different companies but buying services from individual employees, all of whom are paid a set wage. Now, I suppose you could argue that the state should privatize this process, so that each locality could bid for service contracts. In a way, this is exactly what the movement towards pay-for-performance in the teaching sector is. (Interesting, as a teacher myself, I’m quite familiar with the issue and find it seriously problematic, and – you guessed it – my union is doing an excellent job making that case in the capital.) But honestly, implementing a contract bidding process for teachers, firefighters and police seems ridiculous.

    OK, so they are a block of workers. If this block organizes, it does so in response its employer (the state), just as any group of workers organizes in response to its employer. Are all unions then cartels? When workers threaten to strike, the employer is indeed in a bind – its only option is either to negotiate or to hire replacements. So far, the state is no different than a private employer.

    But what about elections, which determine who is in a position to negotiate with unions, and which unions can influence? You call this a form of laundering tax revenues to unions. This seems a very precious narrative. The fact is that all elected officials can be influenced, and by your logic any favors they do for special interests, which effect tax dollars would be a form of money laundering. As others point out, if a lawmaker grants a tax break to a particular industry, that industry is essentially collecting tax revenue. If that industry had any influence over the lawmaker, it would thus be “laundering”. (I hope you will not here argue that a tax break is different than a government spending(!), as no money is changing hands. Not only are tax burdens being shifted to other parties, but the balance sheet of the receiving industry is improving, as it now receives for free the government that everyone else is required to pay for. And yes, we all have a duty to pay for our democratic government, blah, blah, blah…)

    But this analogy is taking advantage of a false comparison with the private sector, in which it is assumed that without public sector unions, public workers would

  16. “You call this a form of laundering tax revenues to unions.”

    No, I call it a form of laundering tax revenues to politicians, through unions. A subset of politicians act to clear the way for unions, by, (For instance.) recognizing unions as exclusive representatives of workers by virtue of easily coerced card checks, rather than the secret ballot. They then take a dive in negotiations with those unions, while nominally representing the interests of the taxpayers whose agents they’re supposed to act as. In return, the unions divert a portion of the extra money they get to the use of those politicians.

    And I will gladly admit that, to the extent corporations are allowed to donate to politicians, they are also susceptible to being used as a conduit for politicians’ money laundering. The problem is endemic wherever politicians control the disposition of funds. But we’d still never permit businesses to form cartels in the same way labor does.

  17. “A subset of politicians act to clear the way for unions”

    A subset. I see, one or two nefarious labor supporting politicians, say? And then this cabal achieves Victory! As in Wisconsin, with large Rethug majorities in both houses and the gov as well. It would appear that Brett’s theory is rendered inoperative by simple factual counterexample.

    And we have that odd bit that the Rethug Governor has decided simultaneously to implement no compete sale of state assets to Koch corporate entities.

    There’s money laundering going on here, and it’s the Republicans who are guilty.

  18. “But we’d still never permit businesses to form cartels in the same way labor does.”

    And businesses are different than public labor unions.

    What you are essentially asking is that public workers give up their voice in Washington – something we apparently refuse to do with businesses. You argument rests on the notion that any voice public labor unions has, is essentially corrupt, and so must be silenced. That creates a very special class of worker indeed. I know you hate government, but this sort of scapegoating of middle class workers who are often times doing some of the most demanding jobs in society (jobs which, by the way, you take advantage of daily), is something I profoundly disagree with.

  19. So, remind me again, why are Republicans against public campaign finance? It could significantly decrease the importance of private fundraising. Candidates just need enough to make a certain amount of noise about their ideas to change the game. And Republican candidates can use it to. Brett, you must be for it from the way you talk here. Or are you going to stick to that whole small government obsession?

  20. I’m a member of a public employees union. I haven’t had a raise in three years, and I was furloughed last year, taking the entire year’s budget hit from the legislature in one month’s paycheck, with only a couple of weeks’ notice.

    I spent 60 hours on the public’s business (that is to say, my work) last week and 60 hours this week, most of it on the road, traveling across the state to implement a program I personally created WITHOUT ANY BUDGET to help create jobs and find/remove burdensome regulations that hinder economic productivity in our most challenged rural settings.

    For this, the Republican legislature wants to lop my salary, slash its already tiny contribution to my under-funded pension (of which I already fund 2/3 out of my own pay), and make me pay for my health insurance benefit — which by the way, is far more expensive than it has to be, because it was arranged under a no-bid, secret sweetheart contract arranged by a cadre of powerful legislators with Blue Cross, a “not-for-profit” corporation that is among the richest and most powerful lobbying entities in the state.

    So, please, enlighten me as to how I’m able to bargain on both sides of the table and launder money? What exactly am I getting away with here? Or, are my union and I simply failing to exploit our massive power?

    I’d really love to know.

  21. I’d really love to know.

    Not me. That post is a thread ender…
    More right-wing flim-flam after that would just be embarrassing, discourteous, and small boy huffing and puffing….
    But then again, after hearing Governor Walker motor mouth on and on…
    His complete lack of self reflection, or even the slightest trace of self doubt about anything in his tidy universe…
    I suppose there is no hole that doesn’t want digging deeper for these types…

  22. Betsy,

    You obviously don’t understand.

    Brett will be along to explain it to you shortly. Try to be patient.

  23. A Ballad

    My name is Scott Walker, and thither I twit;
    I dither to hither, then wither and sit.
    I say to my workers, “You tire me out!
    I need some more coffee, some donuts!” I shout.

    The police are against me! The firemen, too!
    So cut off their salary, then they will stew
    Deep in their poverty, while here I sit!
    No one can evermore call me a twit!

    I make all my money from my own hard work.
    My life put at risk by these union jerks,
    Who sleep all day, sleep at night, then sleep some more,
    ‘Til they will say, “Please, sir, may I have some more?”

    Hell, no! I have scrambled and played the game right!
    My fortune is made, and now I see the light!
    Oh, Ronnie, why cannot these poor people see –
    If I was called Jesus, they’d crucify me!

  24. Koreyel…

    I have to borrow your paragraph starting with, “Has there ever been such a recorded conversation in American history before?”

    Beautifully turned paragraph and my lowly rabble-rousing union supporters in Milwaukee will love it…hope you don’t mind.

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