Monday, November 30, 2015

How Hedge Fund Billionaires Take Over a State

Excellent piece on Illinois politics in Today's New York Times.

MUST READ: WEALTHY SHIFT BALANCE OF POWER IN ILLINOIS: We've chronicled for months the daily battles between Republican Illinois Gov. Bruce Rauner and the state's public employee unions. But the New York Times' Nicholas Confessore offers a brilliant macro-level view of the group of millionaires and billionaires that mobilized to elect Rauner. "To bring about a revolution in the Illinois Capitolin Springfield, Mr. Rauner and his allies have created what amounts to a new campaign economy, in which union money has long been the financial lifeblood of both parties," Confessore writes. "All told, the Griffin family's contributions to Mr. Rauner through the end of 2014 came to $13.6 million - more than the combined sum donated to [former Democratic Gov. Pat] Quinn by 244 labor unions in the state." 
What's more, that group of wealthy donors is staying in the game after Rauner's election, with an ongoing spending binge designed to draw union-friendly Democrats to its corner, Confessore writes. Most of the wealthy donors "lean Republican; some are Democrats. But to a remarkable degree, their philosophies are becoming part of a widely adopted blueprint for public officials around the country: Critical of the power of unions, many are also determined to reduce spending and taxation, and are skeptical of government-led efforts to mitigate the growing gap between the rich and everyone else." 
"They come with a very political and philosophical bent," said the Chicago hedge fund executive William Daley, a former chief of staff to President Barack Obama and a member of Rauner's transition team. "I think they believe philosophically in that business mentality and that strong public unions are a root of all evil in governing places like Illinois or Chicago and New York and California."

A similar effort is at work in California.  The primary target is labor unions.

And on the worker side:

Alexander Hertel-Fernandez 
The American Prospect
Managers and supervisors can now legally require their workers to participate in politics as a condition of employment. For instance, in most states, managers have the legal right to mandate worker attendance at a political rally for a favored candidate—and fire or punish workers who decline to participate.
Aside from Citizens United and the overall political climate, several other changes in the American workplace have facilitated greater political recruitment of workers by managers. Most important, American workers have lost much of the voice and bargaining power that they possessed a generation ago. One clear manifestation of this imbalance in workplace power is the stagnation of the typical worker’s wages relative to the productivity of the overall economy, especially since the 1970s. Other signs of reduced worker bargaining power include record levels of wage theft by managers and the rise of on-call positions where employees are not notified of their schedules until just before they are required to report for work...
The collapse of the labor movement, competition with lower-wage economies overseas, the failure to update labor-law protections, and greater pressures on firms to generate high returns have all contributed to workers’ loss of power and left them in a far weaker position to resist employer demands for political support. In the past, when workers were more secure in their employment, they might have been comfortable refusing to participate in employer-led political activities. Today, not so much: Employees are reluctant to defy management for fear of being replaced.

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