The editor’s opinion from Marketplace, Northeast Wisconsin’s business magazine. (Obligatory disclaimer: Most hyperlinks go to outside sites, and we’re not responsible for their content. And like fresh watermelon, peaches, pineapple, grapefruit, tomatoes and sweet corn, hyperlinks can go bad after a while.)

July 28, 2008

“Reform” and reform

This is shaping up to be a somewhat dull election year in Wisconsin. There are no statewide races and only a couple of compelling open-seat legislative races, and at this point the only drama seems to be whether the Republicans can hang on to one house of the Legislature, or if the Democrats will control both the Assembly and the Senate.

That’s not the case with our neighbors to the north, Michigan. On Election Day Michigan voters will decide (assuming the referendum isn't thrown off the ballot in the court system) the fate of a constitutional referendum that would reduce the number, salaries and benefits of elected officials, legislators and judges, reconfigure the state’s judicial system, and change election law.

On the face of the proposal, this incredibly lengthy proposal includes many seemingly worthy initiatives. The Michigan Senate would lose 10 of its 38 senators, and the Michigan House would lose 28 of its 110 representatives. Two Supreme Court justice positions and seven Court of Appeals positions would be eliminated. Pay for Michigan’s governor, lieutenant governor, attorney general and secretary of state would be cut 25 percent, judicial pay would be cut by 15 percent, and pay for legislators would be cut by the 38 percent they voted for themselves in 2002. Elected officials would have to disclose their income and assets annually. The benefits of all elected officials would be reduced to the same that Michigan state employees get (which evidently are not as luxurious as the benefits of Wisconsin state employees). Elected officials would be banned from lobbying for two years. Redistricting of legislative districts would be taken out of the legislature’s hands to an independent commission.

This seems to be working with Michigan voters, 70 percent of whom favor the proposal, including 73 percent of Republican voters and 67 percent of Democratic voters, according to its sponsor, Reform Michigan Government Now.

Michigan voters clearly want something done because their state is, well, the Edsel (for younger readers: replace "Edsel" with "Yugo") of state economies. Michigan has lost 300,000 manufacturing jobs since 1999. Michigan was the only state to lose net jobs during 2007. The state's June unemployment rate was 8.5 percent (Wisconsin's was 4.9 percent), and a forecast earlier this year that Michigan's unemployment rate would hit 8.9 percent in 2009 now looks optimistic. Michigan also has one of the worst housing markets in the U.S., with, as of earlier this year, one out of every 20 mortgages either in or near foreclosure.

In such an environment, consider this: If you think Wisconsin elected officials are overpaid, consider that Michigan’s governor makes 30 percent more than Wisconsin’s, Michigan’s lieutenant governor makes 72 percent more than Wisconsin’s, Michigan legislators (who are full-time, and there are 16 more of them) make 68 percent more than Wisconsin’s (who are considered 60-percent full-time-equivalent), and Michigan’s Supreme Court makes 20 percent more than Wisconsin’s.

There is, however, a complication worthy of a potboiler novel. An intern for the Mackinac Center for Public Policy, a free-market think tank, discovered, on a United Auto Workers union Web site, a PowerPoint presentation, “Governmental Reform Proposal: Changing the rules of politics in Michigan to help Democrats.” (I think this intern has just assured himself lifetime political employment.) Reading the first few slides shows that the authors of the PowerPoint basically believe Michigan’s system is broken because it didn’t produce the results the authors wanted, and is likely to produce results the authors do not want: “Labor and tort ‘reform,’ erosion of civil rights and environmental protections, budget cuts, [and] privatization.”

The PowerPoint punchline is on page 11: “In 2008, use the public’s very negative mood and high level of discouragement about state government (the worst in 25 years) to enact a ballot proposal which comprehensively reforms state government, including changing the structural obstacles to Democratic control of state government in 2012–2021.” What follows is almost exactly the Reform Michigan Government Now proposal.

This part is unintentionally amusing: The estimated $4.911 million of the campaign is estimated at “less than half the cost of trying to beat an incumbent GOP Supreme Court Justice,” more than what is “spent every four years trying to win the House and Senate, usually unsuccessfully,” and less than half of the cost of a presidential-election-year “coordinated campaign.” If Michigan voters pass this, “it will reduce the cost and increase the prospects of winning the State Legislature every cycle.”

The point about the Supreme Court bears noting. Michigan's Supreme Court ranked dead last in a University of Chicago Law School study, based on "judicial independence from political or outside influences, its numbers of published opinions, and how often the court's decisions are referenced in rulings by other courts." The Public News Service noted that Michigan's Supreme Court "seems to be especially supportive of businesses, based on how it has split on many business-related decisions." (Wisconsin's Supreme Court ranked eighth in the University of Chicago study, and 24th in a U.S. Chamber of Commerce study, where Michigan ranked 33rd.)

Not surprisingly, the Mackinac Center opposes the proposal, having discerned that the PowerPoint "leaves little doubt that the Reform Michigan Government Now ballot initiative is a partisan power play. The most important features of the scheme are the redistricting commission and the removal of two Republicans from the Michigan Supreme Court. Nearly everything else in the proposal seems to be calculated to make the entire package more attractive to voters. ... While we have no objections to partisan politics as such, it is essential to call attention to partisan ploys that are presented as neutral good-government reforms."

The proposal's motives become more transparent when one notices that the proposal to reduce the size of Michigan's top two court levels is designed to weed out Republican judges. Then again, suddenly Michigan liberals have some hesitation about the proposal, one of whom is concerned that controversy over the proposal might actually affect the presidential race, as well as, interestingly, Michigan's Washington Democrats. Also noteworthy is that the PowerPoint author(s) mention the unpopularity of Michigan's Democratic governor, Jennifer Granholm, particularly after she got a tax increase passed one year ago, and yet also mention the lack of obvious Democratic successors for Granholm.

The final irony: Legal challenges have been raised to the vote (there is apparently a reference to a nonexistent part of Michigan's Constitution), which places Michigan’s judges in the strange position of having to decide whether a referendum that would reduce their own numbers and salaries is legal.

There is a more central issue here. It came to me when I was watching "All the King's Men," the Academy Award-winning 1949 movie based on the Pulitzer Prize-winning Robert Penn Warren novel about a Huey Long-like politician whose interest in reform metastasizes into an interest in driving the state's political machine. Reform is never successful if reform is centered around "who," as in whom to replace. Newt Gingrich engineered the Contract with America, which gave Democrats their worst congressional defeats in 50 years. Republican control of Congress lasted just 12 years, due in large part to Republicans' emulating most of the worst abuses of Democrats during their half-century controlling Congress.

Some would argue that voters shouldn't decide to reduce their representation. I don't buy that, particularly if the voters feel they're not being represented by their elected officials. (A friend of mine who has worked extensively in politics thinks Wisconsin should go to a one-house legislature, like Nebraska.) There are some good provisions, such as reducing pay and benefits of elected officials, and an independent redistricting body, as long as it was truly independent. But merely getting rid of the bums, whether by vote (the preferred route) or by term limits (which Michigan has, and which some commentators believe are part of the problem), won't change very much. Even though Michigan's elected officials are clearly overpaid, it's not who they are or how many there are, it's what they are or are not doing. An economy in recession, which Michigan obviously is, needs tax increases like flooded land needs a rainstorm. (The simile of 2008.)

As Mackinac Center president Lawrence Reed puts it, "Ask any resident what ails Michigan, and 'we have too many judges and legislators' probably wouldn't make anybody's top-50 list. Few people are foolish enough to think that simply reducing those numbers would transform Michigan. Most people would say our taxes need cutting, the bureaucracy needs trimming, the schools need mending, the business climate needs improving, or Detroit needs reforming. But RMGN does none of that, which makes it a huge distraction from fixing the state's fundamentals."

Reform is not about replacing one politician with another, or not replacing one politician; it's about replacing bad policies with good policies. That's the case in Michigan and in Wisconsin.


Joshua Rule said...

This post is well-done, and I will be linking to it from the blog, currently covering the RMGN powerpoint discovery. Please note, though, that the Mackinac Center's President is Lawrence Reed, not Jack Reed.

Steve Prestegard said...

Thanks for noting the incorrect name, which is now fixed. (I must have been thinking of Jack Burden when I wrote this.)

greg said...

I would offer a even darker motivation for the RMGN petition than those already circulating. While popular legislative pay cuts and other miscellany serve as an obvious loss leader to the masses, and redistricting serves as a justum bellum for unions and partisan democrats, there is a cleverly obscured truth behind the overly comprehensive measure; its underlying purpose is to effect de facto Tort Reform. The Michigan Trial Attorneys and Mark Brewer already know about it, and you may have figured it out. First the alliance; Brewer is obsessed with the Michigan Supreme Court, and Cliff Taylor, and so are most of the would-be Personal Injury lawyers now scrambling to eek out a living, eating scraps off the Bernstein table, or churning "actual attorney fee" lemon law and Fair Debt Collection Practices Act cases. Clearly, Governor Engler's legacy left a solid majority of (former) insurance industry advocates in control of the Supreme Court. This has devastated plaintiff's recoveries in Michigan, and will continue to do so until "something is done".

So, since it costs $10 million to (maybe) unseat one justice, and since it takes at least two and maybe three justices to swing the pendulum back toward plaintiffs cases, this proposal is a perfect opportunity for Trial Lawyers use cheaper non-profit campaign dollars to engage citizen initiative "lobbying" to literally eliminate the positions of two opposition justices without spending a dime of hard campaign money, and to spend the hard money on a weakened Cliff Taylor, and achieve de facto tort reform in Michigan. Trial lawyers know that they could never pass substantive pro-plaintiff tort reform in the current rarefied atmosphere of Michigan politics, especially when the Insurers can bring such massive forces to bear to maintain their advantage. Trial Lawyers also know that the "investment" in this proposal would be recouped through attorney fees in just a handful of the doomed cases in the trial and appellate systems right now, not to mention the perfectly meritorious causes of action rotting on the vine as a result of the chilling effect that the Court's dramatic reversals in no-fault and "open and obvious" jurisprudence have caused.

So, since the Democrats are desperate to game redistricting, and the people are in a generally foul mood, the trial attorneys saw they could effect tort reform and no one would ever know it. They support liberals and liberal causes anyway, so who is to prove they are behind this when their financial presence in the campaign is consistent, though larger than usual, in this election cycle. I can't prove it, and offer considered opinions only; all I have is circumstantial evidence which is easily shouted down in the court of public opinion. And when the August 10th filing date rolls around, the people will learn a big fat zero from the Campaign Finance disclosures. A series of obscure 501(c)4 corporations, funded in turn by some 501(c)3 corporations, who in turn may end up being funded by Trial Lawyers and George Soros (The Great and Powerful OZ) .The only chance of detection is if they get sloppy with the earmarked pass- through donations, but Michigan's feckless elections investigators won't investigate anything important. They even refused to investigate a $103,000 loan made directly and openly from a public body to a campaign committee, used to pay for a media ad campaign for the "Health Source" expansion millage in Saginaw County, just 29 days before the election. The loan was paid back to Health Source the next day after the election, with campaign donations from the two big contractors who then knew the construction contract was a go. The excuse for tax funded political activity? A provision meant to allow the cure of good faith mistakes that says a prohibited contribution is not a contribution at all if it is repaid within 30 days. But I digress......

What is my circumstantial evidence in this case? Simply this: If the real purpose of this proposal was, as represented to the union, to put the party in a position to avoid judicial tampering with gerrymandering in 2011, then this purpose was clearly served by removing the recourse of appeal to the Supreme Court. Since one provision the proposal already removed any possibility of redistricting appeals, then why expand the proposal with a second, seemingly redundant provision to "gut the GOP" court. The reason, I suggest, is clear. This is not about public policy, or even an elephant versus a donkey; the real fight between is between insurers and plaintiff's lawyers.

All involved are made to look like prostitutes - from the plaintiff's bar, the Democratic party, the union, the insurance industry, former Governor Engler, and especially the jurists who have effected such dramatic and devastating judicial tort reforms of their own, and who are now forced to lay bare their naked self interest to prevent this measure from making the ballot by means of a dangerous new legal theory that will no doubt cost the court significant credibility (a result already calculated by the Brewer cabal).

And don't forget Governor Granholm, who, in order to block a Republican block of the RMGN petition certification, refused to make a Republican appointment to Board of State Canvassers, as specifically mandated by the constitution, which is necessary to fill the vacancy caused on that board last week when the Republican member of that solemn body, which is responsible for certifying all elections and maintaining the integrity of the electoral system, had to resign due to his ownership interest of Sterling Corp., a major political PR firm heavily vested in the anti-RMGN cause, and many other election campaigns in Michigan. How did he get put on the board in the first place?

Finally, consider the two track strategy by Michigan legislators, who are suing RMGN on the novel concept that there is an implied single subject restriction for proposed Amendments to the Michigan Constitution, while simultaneously hatching a Trojan horse plan to use an attractive legislative pay cut as a loss leader for a Ballot Question to repeal or gut term limits. The ambitious Mark Meadows, an officeholder with long experience, should read his own rulebook first. Joint Rules for the Michigan Legislature (Rule 13) states, "The same joint resolution shall not propose an amendment to the Constitution on more than one subject matter." Legislative salary Term Limits repeal are two different subjects. So the 148 guys who make the rules in Lansing would have to break their own rules to log roll this question past the voters, after over 400,000 petition signers put it on the ballot, and 60% of the voters approved it, when Term Limits was enacted in 1993. That won't pass the smell test. This rule is a self-limiting rule, but a legal rule nonetheless. There is no actual single subject restriction in the constitution itself.

The litigation against RMGN will be undermined by this inconsistent plotting, which is, by the way, actually an attempt to take advantage of a clear point of Michigan constitutional law. On the one hard this is a log rolling technique to try to offer a popular pay decrease in return for a yes vote to gut term term limits in a Hobson's Choice election, but of course the main urgent concern right now is a contingency to make sure that if RMGN gets on the ballot, a Joint Resolution is put on the ballot that has a provision that conflicts with RMGN petition, and the pay decrease provides that conflict. In Michigan, even if both questions passed by a majority, if two ballot questions have even one minor conflicting provision between them, then the one with the least votes would lose even if both get a majority yes vote. This is where the Meadows strategy breaks down - even it a pay cut ballot question could win a majority vote log rolled with a term limits anchor holding it down, a dubious proposition, there is no way that rational politicians who want to beat RMGN by just one vote (so as to kill it) would ever hang an anchor like term limits on the pay cut proposal precisely because they know they need more than a Majority vote to win - they actually need to get one more vote than RMGN on the assumption that RMGN wins a majority vote too. So if term limits is the main objective, they risk loss to RMGN by including the conflicting provision of the pay cut. Even the now-notorious power point, which laid bare the naked partisan purpose of RMGN to get control of gerrymandering and remove GOP justices from the Supreme Court, explained why the measure did not go after term limits, at panel 26 it says, "Including a term limits repeal or revision could tank the reform proposal.".

If killing RMGN is their main objective, they risk loss to RMGN by including the repeal or extension of term limits on themselves, since over 66% of voters still lover term limits. If they want to beat RMGN, then they cannot afford to lose any support, and should tactically use a silver bullet of pay cut alone, without the term limits complication. Done that way, it is a perfect technical kill. Either way, the strategy is flawed because it undermines the claims that RMGN is illegally comprehensive, and demonstrates the scheming bad character of our elected officials.
Will they get away with it? That depends on your of definition of "they". One or another "they" will get away with something, but all I really know for sure is that, as usual, "we" probably won't be the winners. We will see millions of tax dollars poured into this heavy handed bitter partisan infighting. I, for one, want my money back!