Labor and State Democrats Tie the Knot Tighter

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Supreme Court Justice Louis Brandeis once commented that each state could “if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Over the weekend one could glimpse this laboratory function in full operation with California Democratic leaders declaring for a state with strong union influence while other states are going in a different direction.

California Democrats at their state convention in San Diego tied the knot with labor all the tighter cheering a strategy they believe will “fix” California’s dismal fiscal woes through higher taxes. In contrast, on Saturday, economist Arthur Laffer presented a different picture in the Wall Street Journal writing that states loosening union ties are leading a pro-growth rebellion.

Ironically, while Congresswoman Nancy Pelosi told the San Diego convention that the Democratic Party is “free of special interests,” California Labor Federation leader Art Pulaski and California Teachers Association president Dean Vogel also spoke from the podium. Former Speaker Pelosi chose to ignore the connection of the party with the powerful union special interest.

Meanwhile, Assembly Speaker John Perez, among others, spoke to the convention’s labor caucus. Members at the convention greeted different tax increase proposals enthusiastically. Whether they will agree on a specific proposal, conventioneers made it clear they wanted taxes increased.

In Laffer’s Journal analysis, he points to Indiana’s recent move to become a right-to-work state. He states that a number of economists show that “the economies in states with right-to-work laws grow significantly faster than those in the forced-union states. They also have higher unemployment growth, attract more residents, and have more rapid growth in the state and local revenues than in forced union states.”

Laffer might have been thinking of California Democrats when he wrote, “Democrats, for better or worse, have staked their future on tight partnership with the unions.” He notes that half the union members today are public sector employees.

And, he brought his argument home to California: “In some of the most ardent pro-union states, such as California, the unfunded liabilities of public employee retirement plans are pushing those states toward financial collapse and intolerably high tax rates.”

Every indication from the weekend convention is that California Democrats intend to keep to the same course. Given the change in direction other states are taking, Justice Brandeis’s description of the states being “laboratories of democracy” will be played out in this current economic environment.

California will be measured against other states that do not follow the pro-labor union line. Consequences from the political actions taken in the various states will be measured.

Laffer, himself, is an interesting indicator. After years living in the Golden State he moved away, the specter of higher taxes being a prime reason. If the Democratic Party supported tax increases pass, how many will follow his lead?

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