Wednesday, June 6, 2012

Wisconsin PEU - The John Gotti of Unions?

Just how badly did the public employee unions miscalculate in Wisconsin? About as bad as bad can be. What they accomplished:
  • Spent 10s of millions of dollars in a losing cause
  • Exposed their extortion scheme to taxpayers everywhere
  • Put Wisconsin in play in November
  • Lost membership
  • Damaged their brand both locally and nationally
  • Proved that they are not invincible
  • Exposed their true identity (it's not all about the kids - it's about me)

Before John Gotti's rise, the mafia in New York purposefully kept a low profile because it was 'good' for business. They knew that in order to continue their various racketeering schemes they needed to keep their activities out of the eye of John Q. Public. You see the plan was simple - Bribe a few judges/politicians/police, threaten/kill any local yokel who starts to raise a stink and everything would be groovy.

Sounds like a good plan, however, when John Gotti Jr. took over the Family he made every effort to flaunt the fact that not only was he breaking the law but getting away with it as well. Because of his greed/ego more and more of the public began to take notice of the Family's activities and this forced public officials, who in the past turned a blind eye, to take notice as well.

The same can be said for the public unions in general and Wisconsin in particular. For 40 plus years, the public unions have quietly gained more and more access to the treasury. Their racket was not that dissimilar to the mob's. The dues forcibly collected from their members (read protection racket) were in part doled out to politicians sympathetic to their cause (i.e. getting more money through no bid contracts, ridiculously high tax funded wage/pension/health insurance for their members, etc.).

This scheme works out pretty well until the economy takes a downturn. That's when state and local officials have to tighten their budgets and the one glaring liability on the balance sheet is of course the lavish outpouring of taxpayer dollars to the PEU.

Now here is where it gets tricky. In Wisconsin, the unions had a choice to make. Either they quietly take a few cuts helping reduce the burden on the treasury and generating public support for being a team player, or you pull a John Gotti and go all in. Unfortunately for the unions they decided to go all in resulting in an unmitigated disaster.

There are about a billion post postmortems being written about the recall election, however, the point I want to make is that the unions in Wisconsin so badly misplayed their hand that it has now caught the attention of the nation. Their defeat was so sound that other governors will have no choice but to replicate in some way what Scott Walker accomplished in less than three years or be thrown out of office.

Why? Because now the average Joe is paying attention to just how excessively the public unions are compensated in their own states. Are the unions overcompensated? Maybe yes maybe no, the point is that the perception is that they are and this is entirely due to the overreaction of the public unions in Wisconsin. 

Every month they allowed the recall to play out in the national media more and more people started paying attention. John Q. Public looked at the sweet pension plans the unions received in Wisconsin and said, 'Hey why can't I get that deal?' Then John Q asks. 'Hey, why do they get that deal?' Then finally, 'Hey, why am I funding that deal?'

Oops - the cat's out of the bag now!

The mistake the PEU made is that they got caught reading their own press and convinced themselves that they were in the right. That is until they discovered that their message of literally free healthcare/pensions/high wages for their members was beginning to tick off the taxpayers who funded it. Tick them off so badly that in the last few months before the election Tom Barrett didn't mention collective bargaining once. And that was what the recall election was supposed to be all about in the first place.

So just like John Gotti overplayed his hand, the PEU did nothing less  - just more spectacularly. Moreover, similar to the Gotti case, once you get the attention of the masses you are pretty much toast. The only difference here is that Gotti's failure was regional; the other Family's in other cities were spared. I don't think this will be the case for the public unions around the country thanks to the short-sighted greedy unions in Badgerland.


  1. Hi Derek,
    caught your blog off a link from Linkiest. Great analogy, great read! Thanks, and I'll be back.

    1. Anon - Thank you very much for dropping by. Glad you liked the post and look forward to seeing you again.


I will leave it up to those leaving comments to moderate themselves. Keep in mind that this site is PG and comments should reflect this.