Regarding Wisconsin, Pat Moynihan saw it coming. But did the last of New York’s grand public intellectuals also divine the limits of the modern American welfare state?
The proximate cause of Wisconsin’s high drama is clear: an entitled class — public-sector employees — is pushing back hard against an emerging economic reality. Their privileges — wages and benefits unreasonably superior to those earned by their private-sector counterparts — are no longer tenable.
And there is the more basic question of whether the employees’ function is sustainable in the modern economy.
Unionists elsewhere, sensing the threat, are rallying to them — anxious that the turmoil in Madison’s capitol rotunda portends permanent change for them.
The crisis proceeds from the deep recession of 2008, and the stunning dropoff in government revenue that accompanied it.
No state was immune; nor were few localities.
Some governments — California, Illinois and Connecticut — are in denial. This won’t get them very far.
Some — New York, city and state — are finessing the problem; that, too, is a stopgap.
And others — Wisconsin and New Jersey in particular — have confronted the issue, both rhetorically and substantively.
Even so, the long-term goal for all seems to be to get past the instant crisis, to secure a little breathing room . . . and to hope that the wolf now clawing at the front door eventually just wanders off. But what if the fearsome beast climbs snarling through the bedroom window?
Moynihan’s prescience regarding all this can be found in “Daniel Patrick Moynihan: A Portrait in Letters of An American Visionary” — a recently published collection of the late senator’s correspondence, edited by scholar Steven R. Weisman.
Moynihan saw complex social issues as public-policy challenges; he didn’t always have solutions, but he rarely flinched when describing problems.
In 1964, as an aide to President Lyndon Johnson, he was the first to diagnose the crackup of the African-American family — then in its early stages but today devastatingly obvious to all but the most obdurate.
His candor earned him the anger of contemporaries, Johnson included — but he was right, and knew it.
As it turned out, LBJ wouldn’t be the only president to be disadvantaged by Moynihan’s intellect. By 1993, having encountered NYU economic professor William J. Baumol, the senator was entertaining serious doubts about the efficacy of Bill and Hillary Clinton’s nascent health-care reform scheme.
“Baumol started out by asking himself why the costs of the performing arts always seemed to be rising” Moynihan wrote. “I remarked that if you want a Dixieland band for a campaign rally today, you will need the same [number of] players you would have needed at the beginning of the century. Productivity just hasn’t changed much.”
But per-player costs — salaries and benefits — had risen dramatically, and the price of that Dixieland band along with them.
So, too, the price of health care, the senator argued. An already labor-intensive industry was becoming even more so with each technological advance — driving per-patient productivity ever lower and overall costs inexorably higher.
The same, he said, is true of what he termed the “stagnant [public-sector] services” — including “education high and low, welfare, the arts, legal services, the police. This means that the [costs] of the public sector will continue to grow.”
But will they continue to grow until government can no longer squeeze sufficient money from the wealth-producing sector to sustain the demands of the wealth consumers? And did that happen in the summer of 2008?
Wisconsin Gov. Scott Walker seems to think so. Or, at least, he’s intent on a little turnabout — squeezing the public unions hard enough to bring their compensation into equilibrium with Wisconsin’s tax base, and forcing enough reform on them to keep things in rough balance going forward.
That’s all. Madison may be a lot of things, but a Ludlow Massacre it most certainly is not. Yet it is unclear whether Walker’s way will be enough.
ClintonCare foundered in no small way on cost concerns, essentially as identified by Moynihan. ObamaCare lumbers forward oblivious to cost. It is a vast investment in the “stagnant services” undertaken at a time when America must compete economically in a world where expensive medical therapies generally are notional or nonexistent.
Despite the sophistries of its supporters, ObamaCare seems no more sustainable for Washington than it is for Madison, Trenton or Albany — which must pay much of the bill and which can’t print money.
And if they could, they’d have to spend most of it on existing obligations: unfunded public-employee pensions, retiree health-care and so on.
Part of the solution is to replace the Dixieland band with an iPod and loudspeakers. Hence, Wisconsin. But more is needed.
Moynihan, ever the partisan warrior, advised Democrats to adopt “approaches to public-sector spending that [represent] good-faith efforts to keep costs from rising more than necessary.”
His party didn’t listen, but his counsel remains sound — and not just for Democrats.
As the unknown unfolds, restraint is more important than ever. Whether it is obtainable is the question. mcmanus@nypost.com