Wisconsin Showdown: Private Sector v. Gov Unions

People supporting Wisconsin's government workers don't seem to understand they are actually supporting fiscal suicide.

Part 1: Wisconsin is not proposing anything unusual. Almost half the states have already outlawed government unions (i.e., right-to-work states). In all right-to-work states, a family can buy a 4/2 house in a safe neighborhood for less than $180K (at least as of 2011).

While correlation does not equal causation, higher government employment costs generally require higher taxes. Higher taxes tend to favor government workers, not private sector workers. In an ideal system, the private sector does not work to provide an ever-increasing share of resources to government workers; instead, the private sector maximizes the income of non-government workers while minimizing inflation and government costs that do not benefit the public at large.

It appears, however, that government unions tend to do too well in compensation negotiations, especially with Democratic politicians, which means that wherever they exist, they have over-reached. Voters don't usually notice the government's generous compensation schemes until there's a recession, which suddenly exposes the actual costs of government. Indeed, recent data shows that public sector unions lack real checks and balances and tend to work against the interests of the public at large. (See Economist articles cited at the end of this post, showing government workers have negotiated trillions of dollars of benefits for themselves--yes, I said "trillions," with a "t.")

Generally, the more powerful government unions become, the easier it is for them to use non-unionized workers (the general public) to benefit unionized government workers. (Imagine a government-sponsored snowball gaining more and more traction, sucking up compliant politicians along the way.) During a recession, when revenues decline, states that have allowed government unions tend to drive out all but very high earners and union members. This is because politically-connected and politically-protected employees (government unions) and people with unique skills usually have high job security.

Thus, as long as recessions and layoffs exist, if someone wants to own a home in a state with government unions, s/he must either join a union; have sources of income unrelated to the job market (inheritance, a trust); or make a very high income in the private sector. Since not everyone can make a very high income in the private sector, government unions appear to drive out non-unionized middle class and poor residents. Furthermore, as we will see in the second part of this post, not only do government unions tend to work against the interests of the public at large, they drive out jobs and increase unemployment by imposing higher costs on corporations and businesses.

Do you support home ownership for the poor and middle class? Then you ought to figure out whose side you're on--the government unions, who drive up taxes and costs for everyone else, or the middle class and poor, who deserve a shot at buying a home even if they're not in a union.

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Part 2: Let's assume we have two states, X and Y. In state X, gov workers must negotiate benefits that are reasonable, because the absence of gov unions forces them to accept reasonable, predictable compensation. In Y, gov unions exist, and they demand and receive millions more annually than in state X. During a recession, State X can more easily cut costs than State Y, which must cut services and raise taxes to pay gov unions. State X's financial flexibility is directly related with its refusal to allow collective bargaining for its government workers.

You are someone who wants to buy a home, an entrepreneur, or a business that is considering expansion. You realize that State X can offer you lower taxes and costs and therefore a better environment to grow your employees and business b/c it has fewer long term fiscal obligations and more financial flexibility.

You also realize that State Y has no choice but to come after businesses and/or potential customers (i.e., taxpayers) to pay off gov unions during a recession. In other words, state Y must raise taxes if its gov unions refuse to agree to substantial pay and benefit cuts. State X, on the other hand, can ask the highest earning members of its government workers to accept lower benefits and salaries, thereby avoiding higher taxes, which reduces the burden on the private sector. State X's ability to demand that its highest earners in the gov workforce accept pay cuts also allows the state to avoid laying off its newer or lower-earning members. Avoiding layoffs allows State X to maintain its services, whereas State Y must cut services or create disincentives for private sector expansion.

Thus, we can see that gov unions are capable of driving investment and private sector jobs to states that lack gov unions, creating a death spiral for states with gov unions (absent a quick economic recovery). In short, if gov unions negotiate unreasonable compensation or refuse to reduce current and long-term compensation during a recession, the state's private sector has an incentive to disfavor expansion in the state.

Bonus: more here, from The Economist ("Three Trillion Dollar Hole," October 14, 2010) and also here, from The Economist ("A Gold-Plated Burden," October 14, 2010):

CHUCK REED is the Democratic mayor of San Jose, California. You might expect him to be an ally of public-sector workers, a powerful lobby in the Golden State. But last month, at a hearing on pension reform held by the Little Hoover Commission, which monitors the state’s government, Mr Reed lamented his crippling public-pensions bill. “City payments for retirement benefits have tripled over the last ten years even though our workforce has declined dramatically, and we have billions of dollars in unfunded liabilities that the taxpayers must pay,” he said. Mr Reed estimated that the average cost to his city of employing a police officer or firefighter was $180,000 a year. Not only can such workers retire at 50, but some enjoy annual pension payments greater than their salaries. They are also entitled to cost-of-living increases of 3% a year, health and dental insurance for life and lump-sum payments for unused sick leave that could reach hundreds of thousands of dollars.

More here, on one particular difference between the private sector and government sector (data from 2008-2009).

22 states refuse to allow collective bargaining: http://en.wikipedia.org/wiki/Right-to-work_law

Liberal Judges vs. Conservative Judges

I was thinking this morning about courts and politics. I've discovered I tend to get along very well with former military servicemembers and police officers. One of my best friends is a JAG (from ultra-conservative Orange County, no less). Another lawyer I respect is also a JAG. While I don't know many police officers, I've found most of them to be hard workers.

As an anti-war libertarian, I find it strange that I can easily socialize with people on opposite ends of the philosophical spectrum. (At least now I understand Ron Paul's comment that individual military servicemembers, as a group, contributed more to his presidential campaign than to any other candidate's.) I did some thinking, and I realized I get along with liberals because I favor change and diversity, and I get along with conservatives because I see the limits of the law in creating any real change. In other words, I am hopeful enough to get along with the liberals, but cynical enough to see the inefficacy of most liberal programs.

As attorneys, there comes a period of time when we get enough experience to see the system as it is, not as we want it to be. Think of the famous Gandhi quote--"Be the change you want to see in the world"--but minus the idealism. After we clean the pixie dust from our eyes, young lawyers look at our student loans and get back to work. (The potential for starvation helps clear the mind rather quickly.) We realize, sadly, that the law doesn't matter so much as the audience, and the only audience that much of the time is the judge, who gets selected randomly. Is it strange to think that the law relies so much on randomness? I assure you, at some point, you get over it, or you go insane. As fans of Trainspotting will appreciate, I choose sanity.

I have also noticed that conservatives tend to work harder. For example, I've noticed that judges who were former military servicemembers work the hardest. Even politicians who used to be military, like Chuck Reed, are known for working hard. Servicemen don't seem to lose their work ethic, and they bring it with them to every job, whether it's politics or the bench. Thus, while many government jobs are filled with "lifers" resistant to change and who do the absolute minimum required, the military is probably the one branch of government that demands you work hard, no exceptions allowed. As a result, when servicemembers finish their military commitment, they bring the same "hardcore" attitude to their civilian careers. In my experience, judges who are ex-military usually read the court filings and are well-prepared for court hearings, even if they don't reach a fair result or go overboard. Many other judges are quite content to show up and let their law clerks do most or all of the work, but that lax attitude doesn't seem to afflict most ex-military members.

Police officers tend to function like military servicemembers. They're also hardcore, and they respect hard work. (By the way, the police officers I've met usually hate Democrats, because they think Democrats are naive in thinking their policies or laws would have any effect on a child molester or a drug dealer trying to make a buck.)

So why do I tend to get along with cops and military servicemembers, even though I am anti-war and I favor more police oversight? I guess it's because I'm hardcore, too. I'm fond of saying, "I do what I say, I say what I mean." As I get older (cue Winston Churchill and his comment about young hearts and old brains), I've noticed that many self-proclaimed liberals tend to be big thinkers and big talkers but lack the capacity for actual sacrifice. For example, I recently saw a liberal activist with a T-shirt that said, "Anti-War." Well, that's great, but how does buying yourself a T-shirt help some little kid in Iraq? Personally, I would take that T-shirt money and donate it to kiva.org, the Red Cross, or some other organization. That's the problem I've seen with many liberals--they have strong views, but they refuse to sacrifice anything themselves. It's usually someone else who has to do the sacrificing--either the rich, the small business owner, etc.

As for liberal judges, I've found many of them tend to have a poor work ethic. While the conservative judges are at home reading the papers for court the next day, the liberal judges tend to be teaching law classes, giving seminars, publishing some legal treatise--i.e., something that allows them to impart their knowledge to the public.

Don't get me wrong--I love legal seminars, especially the ones that include judges. But other than one judge, who's in federal court, I don't tend to see liberal-minded judges prepared with insightful questions to ask. One time, I provided a liberal-minded judge with extensive legislative history relating to a law. I marked in bold and 14 point font all the relevant sections of the history that showed the judge that his law clerk's statutory interpretation was wrong. The judge practically freaked out (I could almost hear him thinking, "You don't expect me to read all this, do you?"), and--in my subjective opinion--may or may not have ignored the legislature's intent.

Maybe I'm a terrible oral advocate, but I've left court several times feeling like my hard work and research were a waste of my time and my client's time. Too often, there are no tentative rulings to focus the oral argument, or the judge does not ask me a single question. As a result, I've become critical of judges who rely solely on their law clerks, even when their clerks do excellent work. As far as I'm concerned, judges who don't personally read the legal briefs are stealing from taxpayers. It seems no different than a lawyer who bills for time never worked. A lawyer who tried to bill for unworked hours would be fired, so why should a judge be treated any differently? After all, judges are paid for their time and expertise, just like lawyers. Shouldn't they read the legal briefs, even if they have research attorneys?

Before addressing some differences between conservative and liberal judges, it's important to note that I am generalizing--there are liberal judges who are hard-working, and conservative judges who appreciate nuance. At the same time, I have noticed some distinct patterns among liberal judges and conservative judges. In my experience, conservative judges tend to read the papers; either ask relevant questions or none at all (think Clarence Thomas); tend to work hard; tend to avoid legal seminars and other outside legal activities; and have a well-run, efficient courtroom (i.e., if someone starts repeating arguments already stated in the papers, they get cut off).

The downside to conservative judges is when they're good, they're great, but when they're bad, they're the Devil's spawn. Really horrible conservative judges, for example, think they're the only thing standing between anarchy and civilized society. As a result, if the bad conservative judge hates your case, you and your clients will get sanctioned or will suffer somehow. Another characteristic of terrible conservative judges is that if you don't suck up to them, you will pay for it. The legal system has many technicalities, and a bad conservative judge can make your trial or legal motion Kafkaesque if he feels like you're not giving him appropriate respect; in the alternative, he may just dismiss your case, knowing that your client probably doesn't have the resources to appeal.

In contrast, liberal judges tend not to sanction parties, even when they richly deserve it. Say what you want about "sympathetic" judges, but when it comes to avoiding embarrassing scenarios, I'm putting my money on the liberal judge. At the same time, generally speaking, liberal judges tend to believe their compassion and wisdom absolves them from reading every paper that is filed. Perhaps that is a reasonable perspective. After all, most law/research clerks are quite good, and they summarize the legal papers very well. The downside to relying on law clerks is that it takes a long time for a new lawyer to get any respect from some liberal judges. If a new lawyer is good, but the judge never reads his papers, the new lawyer will never get any respect.

When I first started out, I could tell who read my legal briefs by the level of respect I got from the bench. Typically, due to my youthful appearance, if a judge hadn't read my legal briefs, he would act like he was doing me a favor when I won. In contrast, the judges who had read the papers knew I wrote well, and they would treat me no differently than anyone else. Over time, I realized that most of the judges who read my papers happened to be more conservative. I really enjoyed not being treated differently just because I didn't have 40 years of experience. After all, if your papers are well-written, and you cited the proper case law, why should the number of years you've had a bar card matter?

Again, I realize this post relies on generalizations, but I hope you've enjoyed it. One last comment: if you get the chance, vote for female judges. There aren't enough of them in court, and, just like in real life, the more women around, the less likely it is that the men do crazy things. According to the Federal Judicial Center's History Office, only 25% of Article III judges are female, and only 1% identify themselves as Asian Americans. (Source: Shawna Wilson, Oct 2009, Young Lawyer.) I don't know the exact state court statistics, but a similar gender imbalance probably exists in California state courts.

P.S. I just realized a shorthand way to summarize my entire post. Have you seen the early episodes of the TV series, Scrubs? If so, think of Bob Kelso as the average liberal judge--the one who doesn't practice medicine and lets other people do much of the work--and think of Dr. Cox as the average conservative judge--the one who looks like the a**hole, but who's really the main person holding up the place. I'd probably play Dr. Dorian, who, "despite his numerous flaws, quirks, and personal insecurities," is shown to be a very competent doctor. Well, at least that's what Wikipedia says.

P.P.S. Make sure you read Ken's comment. Overall, he may be right that there are only two categories of judges: judges who require strict, slavish compliance with evidentiary rules, and judges who don't. But Ken's comment also tells you that judges have wide discretion in interpreting the evidence rules, which should tell you that the rules are too convoluted. The more convoluted the law, the more the legislature is allowing judges to potentially decide outcomes based on individual preferences.

Let me give you two examples of a judge administering evidence rules differently. In one trial, opposing counsel had numerous emails that hadn't been verified, i.e., no custodian of records appeared, no declaration, just a bunch of emails sent by some employees. No one was disputing that the employees had sent the emails. Opposing counsel waited the end of his examination before asking the court to admit the twenty or so emails into evidence. The judge, knowing my objections would require tedious parsing of the emails, glared at me, almost daring me to tick him off by making an objection. This was a bench trial (no jury), so I didn't object to the emails. The judge admitted the emails into evidence. The judge glaring at me won't show up anywhere in the record or transcript.

In another case, I had numerous emails to introduce. All emails were given to me by the corporate defendant. All the people who had sent the emails used corporate email accounts. No one was disputing that the plaintiff had sent these emails. A company employee admitted on the stand that no one had hacked into the server, and there was no reason to believe the emails had been altered or forged in any way. Opposing counsel came from a large law firm and objected several times to the emails. The judge refused to admit the emails into evidence.

What's the difference between scenario A and scenario B? I don't know what to tell you. One was a jury trial, and the other one was non-jury, but that should not have made any difference. By the way, the same judge presided over both trials.

[Update: about a year after the trial in which the judge refused to admit numerous emails into evidence, I had another jury trial with a different judge. This trial also involved several important emails. I was able to get the emails admitted into evidence.]

(A federal judge, the Hon. Judge James Rosenbaum, has tried to come up with a solution, FRE 808; however, other than one law review article, I don't see much else on this new proposed rule of evidence.)