Monday, January 11, 2010

WFP: Es Su Familia?

In yesterday's NY Daily News, Errol Louis castigates the Randy Mastro-led lawsuit against the Working Families Party: "The nationwide campaign to attack, discredit and defund left-leaning political groups arrives in New York City this week when a trial over obscure, technical issues of campaign law begins on Staten Island. A gaggle of Republican political operatives and their lawyer, former Deputy Mayor Randy Mastro, have sued the campaign of newly elected Councilwoman Debi Rose and the Working Families Party, charging violations of campaign law."

Louis doesn't think much of the lawsuit's substance-which revolves around the party's setting up of a profit making campaign arm called Data and Field Services: "In reality, the legal issues are anything but clear. It takes a lot of research to determine whether, for instance, the amount charged by WFP's subsidiary for voter lists or street campaigners is below "fair market value" compared with what other companies charge. But it's already obvious that partisan politics - specifically, a Republican hit job on the WFP - is the purpose of the trial."

Fair enough, and perhaps he is right, but the larger issues is political: "The attack on WFP is an extension of a national campaign to cripple groups like ACORN and politically active labor unions like the Service Employees International Union.These and other progressive groups have registered millions of new voters, unionized workplaces and pushed successful campaigns for living wage laws and other liberal measures. That makes them Enemy No. 1 to conservatives."

Well, we wouldn't say that that's the definitive nature of the conservative critique of the WFP-one that devolves from what Louis refers to only as, "other liberal measures." What the WFP represents is the philosophy of an expansive government-and its constituent elements come (although not exclusively) from public sector unions such as AFSCME, the UFT and the TWU Local 100. The goal of the WFP, then, is to protect the public sector from any shrinkage.

This world view leads inevitably to a strong stance against policy measures that would strengthen the private sector-in particular, lower taxes and less regulation. Concomitantly, the WFP favors the kind of high tax environment that supports an enlarged public sector. In our view, however, this is an approach to governance that is proving to be an anathema to the large majority of Americans-who, more and more, are identifying themselves as conservative.

Herein lies the danger of the WFP tail wagging the Democratic dog-it inevitably pushes the Democrats further left while the electorate is headed in the opposite direction. And even if this is less true in NY State than it might be elsewhere, it is a direction that exacerbates the economic climate in the state by the party's insistence on keeping the size of government as it is-along with the public sector work force, and the high wages and benefits that supports it.

It is the same philosophy that animates the editorial page of the NY Times-and the paper's view of the federal stimulus package that has failed to deliver on its promise to stem job losses in this country. The Times, and we believe the WFP would enthusiastically aver, calls for more of the same government job creation that would worsen the ability of the economy to recover: "The private sector alone is unlikely to create enough new jobs, even as the economy recovers. Employers are more likely to add hours to the truncated workweeks of existing employees than to hire new workers. They may also prefer to make temporary workers permanent rather than add new staff."

No mention here of the fact that the vaunted-but failed-stimulus package passed last year was designed to keep the unemployment rate from rising above 8.5%. In this world view, nothing succeeds like failure. And if at first we don't succeed, well, keep trying more of the same tax and spend.

As the Times suggests: "Responding to the jobs report on Friday, Mr. Obama reminded Americans that $2.3 billion in tax credits — passed by Congress last year as part of the fiscal stimulus — would soon begin to spur the creation of some 17,000 green technology jobs. He also called on Congress to approve another $5 billion in spending for more clean energy manufacturing. And he urged lawmakers to move on legislation for several job ideas he put forth last month, including a plan for public-works employment and bolstered small business lending. That’s a start, but now he has to get Congress to act."

What's missing entirely from the Times editorial-and it speaks directly to the WFP's philosophy as well-is any discussion that the stimulus not only failed utterly to deliver on what its sponsors promised, but might have also made the economic recovery prospects that much worse. With debt rising and health care mandates on the horizon-not to mention the possibility of an expensive cap and trade bill-businesses are skittish about expanding, and investing in job creation.

This is exactly the point that Charles Gasparino makes today in the NY Post:

"So, despite all the money spent on stimulus, the economy continues to lose jobs and unemployment remains at a staggering 10 percent. That grim news appeared to catch the Obama administration by surprise last week -- but it shouldn't have. The number-crunchers at the Treasury Department have been celebrating what appears to be the end of the Great Recession as told through rising GDP, higher business profits and a buoyant stock market. But owners of small businesses -- the usual engines of economic growth -- are still refusing to hire back workers as they normally do when the economy turns up from a sharp decline. So, despite all the money spent on stimulus, the economy continues to lose jobs and unemployment remains at a staggering 10 percent. That grim news appeared to catch the Obama administration by surprise last week -- but it shouldn't have. Talk to them, and they'll gladly tell you why: Having weathered the recession, they now fear the administration will choke off the nascent recovery and increase their costs through higher taxes to pay for the myriad of programs President Obama has in store for us, including the hyperexpensive health-care overhaul."

And what about the, "bolstered small business lending," that the Times advocated? As Gasparino underscores: "If the president wasn't so busy looking to score cheap political points when he met with the heads of the big banks last month, he'd have listened to their warnings on this very issue. At one point, JP Morgan CEO Jamie Dimon politely interrupted Obama's monologue on how the banks should be lending more to small businesses to explain that many businesses simply don't want to borrow to expand their operations and hire more workers. "Jamie basically said the demand for loans is way down because businesses, particularly those that are making money and can qualify for loans, simply don't want to borrow," said one person with direct knowledge of the conversation."

So our beef with the WFP devolves from its support for the very tax and regulatory policies that have crippled the state's-and the nation's-economy. The more government and its work force expands, the higher is the tax burden on businesses and homeowners. This is especially true in a dangerous economic downturn. In the end, a pro government growth policy amounts to the kind of zero-sum game that will lead to the demise of entrepreneurism-the real source of true job creation in a free market economy.