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Wisconsin Recall Results: Why Some People Don't Vote Their Self-Interest

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Oftentimes, contrary to our best hopes people of dubious character and ulterior motives find a home in the highest echelons of political office where they can influence policies that affect millions of lives. Yet, voters vote for them! Sometimes knowingly. Inconsistencies in human nature reveal themselves in our politics and economics. Some people are aware of these inconsistencies but elect to ignore them; others simply don't see them and are content to exit blissfully in the ignorance sanctioned by their political guru. Then there is a symbiotic relationship between them, the leader and the follower, the person holding office and the people who put them there. It is of interest that the people who spout the greatest contempt for government are the ones who would prevaricate the most and spend millions to control it. The most egregious insults to the public airwaves are the politicians who can utter, with a stare of conviction, two diametrically opposite statements to adoring audiences depending on venue. The growing incivility (coarsening if you will) of the public discourse is exemplified by the following: someone calls the president a liar (Rep. Joe Wilson in 2009 in Congress, and Harry Reid in 2004 on Meet the Press) or some other public official contends that some of her colleagues are members of the communist party or a presidential contender says repeatedly that the president made the economy worse and when a reporter calls him out on it he denies--on video--ever saying that. Add the verbal and visual misdirection and the SuperPacs' legal financial ability to pay for them and you have a combination that even the most avid political observer finds daunting to push back against. Isn't it fascinating that a false statement repeated ad infinitum takes on a patina of believability--for instance, birtherism, a slice of the population will never believe Obama is a natural born American no matter the evidence; and the alleged link between Saddam Hussein and 9/11 will never go away.

Once a former head of the RNC bragged publically that "government can't create jobs." If you don't like government, this is red meat tossed at the true believers, the faithful, and it is the sort of commentary that they revel in without question. But what does it say about U.S. postal workers, police officers, custom officers, firefighters and educators in public schools--they don't have jobs? And if you privatize the postal service, then presto like magic new jobs are created. These government workers in government jobs--owners of phantom jobs that did not exist--are suddenly, the day after privatization, in mail delivery jobs created by a purchase made by a job creator. As government workers, in bad times they are often told to go home and don't come back--the excuse is often to balance the budget. In private and public jobs, workers are a major cost, a nuisance that can be replaced with machines, robotics. And machines do not form unions. At the same time the top dog, the CEO who drove the company to ruins is awarded a severance package of staggering millions by members of the board he appointed. This is made easier by stripping industries of union representation.

The chart below shows a startling divergence between workers' wages and profit earners. The latter's income has risen substantially (see red line in chart below) over the years; while wages (see blue line) have flat-lined. The trend in wages from 1970 to 2009 has been as flat as a pancake and if this trend continues the gap between the two lines gets wider. One way this gap can get worse or persist is if the voice of workers gets completely sidelined. And that is exactly what seems to be gaining political momentum. Unions are weak and getting weaker in the wake of a determined and defiant number of governors that came into office in 2008 vested with an ideological mission with no place for unions. So, you can expect that with no advocates wages will remain flat, even in the face of productivity gains. "Productivity has surged, but income and wages have stagnated for most Americans. If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000." (Quoted from Mother Jones cited below)

 

If you are unhappy with this chart, please direct your ire at the Mother Jones ( click here ) where the data were compiled. I would concede, however, that anger could be generated toward me for the audacity to buttress my argument with this chart. Incidentally, here is another link that shows a similar pattern of divergence between corporate profits and employee wages-- click here

Another practical analysis of the chart is a story the underlying the lines tell. There are two groups--the job creators (perhaps one percent) derive their income from profits and of course workers who obtain theirs from wages. Now in the aggregate the total cost of production equals the total revenues from sales. Price times quantity sold is total revenue, that is price p times quantity q, pxq=TR. On the other hand, labor costs (major business costs) are wages times work per unit (generally hour)--of course, other costs include overhead costs and the cost of capital, rent and interest. Then what is left, the residual, is profit. Labor costs are volatile--except for unionized labor costs and other costs components such as rent and interest. The businessperson can raise revenues and profits by changing a number of variables. They can charge more for their goods and, thereby, increase revenues or they can hold price constant and try to sell more physical goods. Or, they can attempt to increase both price and quantity--sometimes that is possible depending on the sensitivity of the kind of goods they sell to the price. The problem with raising prices is that the firm ends up selling less, so revenues fall instead of rise if demand is price elastic. One intuition for this is higher prices, for goods can reduce consumers' incentives to buy them. This pricing strategy might not rebound to the benefit of the job creators. Another strategy that might be pursued is to keep wages depressed. Hence, the chart shows that might have been the strategy of choice. Now depressed wages signify insufficient purchasing power to support economic growth. That is, wage earners don't have the wherewithal to buy the goods they produce. But the higher profits that this strategy generates imply that profit earners (job creators) are now able to pick up the slack left by wage earners. However, job creators use profits to buy goods that are different from the goods consumed by ordinary consumers. They purchase high-end goods that cannot be universally consumed. They are not very interested in the products produced in large numbers for the masses. Or, the bulk of their wealth is tied to speculative activities or invested overseas. So they don't quite pick up the slack. The flat-lining wage trend is a bad omen for the future of the economy. Yet, we ordinary consumers are amazingly complicit in this by voting against our self-interest as was done in Wisconsin for the failed recall effort of Governor Walker who has been trying to make unions in the state redundant. Perhaps the only challenge to the near absolute power of employers is unions but we vote to see them go away. Such a vote tends to keep wages from rising and ensures that productivity gains are not shared with labor, thus reinforcing the already lopsided income and wealth distribution.

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Name calling is another behavior of politicians that is fraught with inconsistency. For instance, a very popular female talking head referred to President Obama tangentially as the devil. She really said, "The Devil is not just in the White House, it's in the details." Granted the statement might be hyperbole, but among her legion of listeners this is true--the president is the Devil. Further, quite a few religious men have voiced their opinions about the president's "Devilhood." It is astonishing gullibility that leads to inconsistent reasoning here. From what I know of the devil, he is a terribly powerful being--who once sat on the right hand side of God. Now with that kind of power what's to stop him from carrying out his nefarious plans for the United States? Who could stop him? Santorum? Santorum was plagued throughout the 2012 Republican primaries by comments he made in 2008 at the Ave Maria University regarding "Satan planning to attack America." Then the solution to the work of the Devil is to make Obama a one-timer, to filibuster every opposition bill before the Senate, to block his appointments, to repeal Obamacare, to push for voter ID (suppression), and to bust unions.

Now in the political theater there is a long list of names assigned to the president. Among them I list socialist, fascist and Hitler. Socialism is about the ownership and operation of the means of production and distribution by society or community rather than by private individuals. But individual freedom is not constrained. Fascism is characterized by rigid one party dictatorship, a forcible suppression of opposition; all private economic enterprises are controlled by the government. Well, the Fascism and Nazism ideological labels are very similar, they are both dictatorial in aspiration, but fascism is about an all-powerful state--the state is everything and individualism is subsumed in it. Nazism is all this too but it emphasizes race--the Aryan race and no other race would be accepted into its society. There is no contradiction here. It is doubtful that someone of his ethnic composition would be accepted into the kind of society Hitler envisioned or in fact would volunteer to have any part of it. Despite his foreign policy bona fides (getting rid of Osama bin Laden), the president is accused of being a Muslim and interested in destroying America. And even Glen Beck weighs in by calling President Obama a racist. These contradictory and inconsistent views some people hold of the president tie his hands and make it extremely difficult for him to enact and implement policies that would more rapidly get us out of the political and economic quagmire in which we find ourselves.

Ed Schultz went off the rails following the results of the re-call election in Wisconsin for failing to understand why union members would vote against their own self-interest. And why would anyone, including some current beneficiaries, wish to cast a vote for someone promising to dismantle Social Security, Medicate and Medicaid, even when that person's parents, and grandparents are current beneficiaries of these "socialist" programs. I don't enjoy the benefit of having answers to these contradictions that inhabit the human psychic. Perhaps, it is human nature that leads to wage/profit disparities, name calling, union busting votes and/or acceptance of the future dismantlement of the social safety net. The behavior (at times inconsistent) of voters might be assigned not to malice or gullibility, but to strongly held ideological views that trump logic.

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Seymour Patterson received a Ph.D. in economics from the University of Oklahoma in 1980. He has taught courses and done research in international economics and economic development. He has been the recipient of two Fulbright awards--the first in (more...)
 

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This is one of the best written articles I... by Michael Bonanno on Monday, Jun 11, 2012 at 11:39:40 AM
why have so many Wisconsin union members opted out... by Doc McCoy on Monday, Jun 11, 2012 at 10:43:26 PM
"the argument can be made that unions are no longe... by J. Edward Tremlett on Tuesday, Jun 12, 2012 at 10:37:52 AM
Sorry Ed, I have no sympathy for those who respond... by Sherwin Steffin on Tuesday, Jun 12, 2012 at 6:23:11 PM
Another way to look at it, supplied by my brother ... by J. Edward Tremlett on Wednesday, Jun 13, 2012 at 8:08:47 AM
... you and I are Mike and Ike on the "3rd party v... by J. Edward Tremlett on Wednesday, Jun 13, 2012 at 8:10:23 AM
When you get an answer, please let me know!  ... by Mary Pitt on Tuesday, Jun 12, 2012 at 11:26:18 AM
Lying, cheating and collusion. Wisconsin's paper... by Carol Davidek-Waller on Tuesday, Jun 12, 2012 at 2:56:24 PM
even as the republicans are selling us out to the ... by zon moy on Tuesday, Jun 12, 2012 at 11:58:35 PM
that "leading Democrats is like herding cats," and... by Mary Pitt on Wednesday, Jun 13, 2012 at 10:31:49 AM
Peephole seem to be myopic, they often sacrifi... by Reza varjavand on Wednesday, Jun 13, 2012 at 9:07:32 PM
People seem to be ... by Reza varjavand on Friday, Jun 15, 2012 at 9:58:12 AM