The intense recall elections that are taking place this week and the next in Wisconsin are in my view a harbinger of further levels of political dislocation in the United States. In the ordinary course of politics, it is rare that voter dissatisfaction is so intense that citizens are prepared to overcome the arduous procedures needed to force the issue. But the sad truth about the United States is that there are ever greater levels of polarization in the electorate than at any recent time.
The movements have come from both sides. The conservative wing has become more libertarian and thus has little patience with the power of unions which they (and I) regard as contracts in restraint of trade that prevents the orderly provision of goods and services. Yet, as the Wisconsin struggle over public unions reveal, the rapid decline of unions in the private sector is perceived as a mortal threat to the entire structure of labor relations that was put into place with great fanfare in the 1930s for the private sector, and which was extended to public service unions in the 1960s.
What is so clear is that there are no obvious compromises that allow the two sides to get together. In more recent times, the battle between the pro- and the antiunion forces took place within the existing legal structure, such that the usual solution was to lower (or raise) a wage, reduce (or extend) holidays, and so on down the line. But today the battlefield is over the legitimacy of the structure, not the deals made under it.
As the split becomes wider, so too the costs to spring into action become lower, with the immense rise of social networking devices that can be used to crystallize dissatisfaction on both sides of the line. The reports that the Wisconsin battles have generated as much heat as a gubernatorial election should not come as a surprise. These are not statewide figures, but are confined to those districts where the passions run hot.
Surely, some of this will spill over into the national arena. I have already written that the source of the huge uneasiness in financial markets over the deficit stems from the simple realization that the two parties really have very little in common and don’t like each other to boot. But the source of the decline in the United States stems from the ability of the Democrats this last time round to put forward an agenda that maps their preferences, but which imposes hidden costs on society that are manifest most recently in the disappointing job reports that go hand in hand with deficits.
We are in for grim times. Unless we free up labor markets, all the stimulus and all the protest will not do the slightest good.