In their 1984 book Tyranny of the Status Quo, economist Milton Friedman and his wife Rose take a look at the effect of the conservative revolution of the late 70’s early 80’s with the election of Ronald Reagan, Britain’s Margaret Thatcher, France’s Francois Mitterrand and Germany’s Helmut Kohl on the economies of their respective countries. Many of these leaders after their election imposed what seemed to be radical changes in direction for their respective economies. The question is: would any of these leaders have been elected if their post-election plans had been known beforehand? Why not spell out a move to socialism like Mitterrand implemented in France? How about the elimination of New Deal alphabet agencies like Reagan?
The Friedman’s generalized that all administrations, whether federal, state or local, have a six to nine month window to enact major changes; if it does not seize the opportunity then the window shuts and further changes come much slower or not at all. The corollary to that is that not only must a politician get elected, they must have a highly detailed plan of what they want to accomplish in place before the election so they can turn that into policy after the election. The Friedman’s give a most revealing example from a provincial election in British Columbia that explains this sometimes puzzling behavior:
“A recent election in a Canadian province illustrates our generalization in a rather different way – one that brings out clearly a major reason why the generalization is valid and bears particularly on the prospect of reelection. William R. Bennett was recently reelected for his third term as premier of British Columbia. Immediately after his reelection, he announced a sweeping program to reduce the role of provincial government: he proposed to cut the number of government employees by 25 percent and to reduce the spending on a wide range of programs. In addition, he abolished outright a number of politically sensitive commissions. There has understandably been an outcry of rage and frustration from threatened civil servants and other groups directly affected by his actions.
“Now, Mr. Bennett could have introduced these measures before the election and not immediately thereafter. Why didn’t he? The answer is so obvious that it is embarrassing to spell out, yet it is crucial to understanding the generalization with which we started and the tyranny of the status quo. Any measure that affects a concentrated group—either favorably or unfavorably—tends to have effects on individual members of that group that are substantial, occur promptly, and are highly visible. The effects of the same measure on the individual members of a diffuse group—again whether favorable or unfavorable—tend to be trivial, longer delayed and less visible. Quick, concentrated reaction is the major source of the strength of special interest groups in a democracy – or for that matter any other kind of government. It motivates politicians to make grandiose promises to such special interests before an election – and to postpone any measures adversely affecting special interest groups until after an election.
“Had Premier Bennett spelled out his intention to cut personnel and funds before the election, he would have aroused immediate and vocal opposition from the special interest groups affected—and only lukewarm and far less vocal enthusiasm from the taxpayers in general. By waiting until after the election to spell out his program, Premier Bennett could hope that the bad effects on the concentrated groups would dissipate before the next election while the good effects on a broad constituency would have time both to take effect and to be recognized as the result of the measure he took.”
How does Friedman’s Generalization and Corollary apply to events of today? Let’s fast forward to today in Wisconsin and Ohio. Had Wisconsin Governor Walker and Ohio Governor Kasich announced their plans to restrain or eliminate collective bargaining for public sector employees and sought the legislatures to rewrite the rules of the game in midstream, chances are that the uproar from public and private union members and their families would have been enough to keep them from office. Instead they waited until after their election to announce their plans and move forward.
In Walkers case, he has stood front and center in this debate and has taken the brunt of the anger his budget balancing act has generated. Kasich, on the other hand, has stood in the background as the Ohio Senate and Senate Bill 5s sponsor fielded the heat from organized labor protesting his moves. The Ohio Senate passed the measure with every Democrat and six Republicans voting no, it now moves on to the House for sure approval. The Democrats in Wisconsin are still in a secured location in Illinois waiting out the governor and delaying a vote.
If the opposition can delay changes past the six to nine month window, then chances are good that the proposals can be defeated or modified to be less draconian. All the evidence needed to support that is the break-neck pace of major legislation in the first few months of the Obama Administration. If the minority could have slowed the pace, they could have captured enough time to change the legislation more to their liking and given more consideration to the effects on their special interest groups or killed the bills altogether.
The financial situation the two states are in is not unique as almost every state has some sort of budget crisis looming for either this fiscal year or an upcoming cycle. The question then becomes two-fold: if Ohio and Wisconsin are successful in this strategy of union-busting budget balancing, will other states follow? Are public sector unions in peril? Both these leaders are betting with their careers that the course they are on will return their states to solvency while the pain from the protests will be forgotten with the next election cycle. If they have to throw a few legislators to the wolves, so be it. Chances are that whatever positive results may be made will not be realized before 2012, so you can bet on a few senators and house members going home after the election.
The flames fanned today will put Ohio and Wisconsin in the eye of the hurricane at least through November of next year. 2012 is going to be a big year.
Through the Mill 