Wisconsin’s governor manufacturers a fiscal “crisis”, moves to crush unions and then threatens to call out the National Guard.

The brazenness of Wisconsin governor Scott Walker is truly breathtaking. I suppose I have been so naïve that it seemed to me that people like this really don’t exist. No one can be this… Cruel? Cynical? Devious? All while in plain sight, in the garb of “respectability” that is normally afforded a sitting governor.

So, here’s the short version, for those of you who haven’t been following this, from HuffPo.

Enter Scott Walker. Newly-elected GOP governor of Wisconsin with GOP control of both houses, it is understandable that he didn't think he had to ask for permission. But this was way, way over the top, both in terms of procedure and substance.

In terms of procedure, it does not play well to announce a radical bill that will devastate long-standing promises of economic security and then allow only three days for debate before the final vote on ratification. Asked why he did not give the unions even an opportunity to negotiate, Walker's answer joins the litany of the greats along with Richard Daley, Sr., and Huey Long: "To those who say why didn't I negotiate on this? I don't have anything to negotiate with. We don't have anything to give. Like practically every other state in the country, we're broke. And it's time to pay up."

That position was slightly undercut by his insistence that the only alternative would be to lay off 6,000 state workers. It does not quite do to insist that there is nothing about which to negotiate and then to identify a point of negotiation in the very next sentence. All of that, of course, was right before he said that the National Guard is standing by to intervene if public employees try to strike.

In terms of substance, it is hard to know where to begin. Walker's "Repair the Budget" bill is primarily a union-busting measure, many of whose provisions have no fiscal consequences at all. The bill requires public employees to make contributions to pensions and the costs of health care, but union representatives insist that they have no objections to those provisions. They insist that what they care about is the curtailing of collective bargaining rights. But maybe they should read the bill again. Here's a particularly juicy bit:

"Wages would include only total base wages and would exclude any other compensation, including, but not limited to, overtime, premium pay, merit pay, performance pay, supplemental compensation, pay schedules, and automatic pay progressions [emphasis mine]."

In other words, the entire salary grid for teachers would be thrown out, and school districts would be free to define and implement new salary systems from scratch. That's in addition to giving the administration unprecedented authority to redefine Medicaid eligibility (but only downward), and enough other material to fill 144 pages.

OK, I guess that sets the picture. The governor decides that, because of this “fiscal emergency” where the state is absolutely broke, he will gut any and all unions. Sure, that follows. But, if that wasn’t bad enough, guess what? Walker pretty much manufactured the entire “crisis” himself in his first few days in office by giving tax cuts and other gifts to the people and organizations that helped him get elected. Via TPM.

Wisconsin's new Republican governor has framed his assault on public worker's collective bargaining rights as a needed measure of fiscal austerity during tough times.

The reality is radically different. Unlike true austerity measures -- service rollbacks, furloughs, and other temporary measures that cause pain but save money -- rolling back worker's bargaining rights by itself saves almost nothing on its own. But Walker's doing it anyhow, to knock down a barrier and allow him to cut state employee benefits immediately.

Furthermore, this broadside comes less than a month after the state's fiscal bureau -- the Wisconsin equivalent of the Congressional Budget Office -- concluded that Wisconsin isn't even in need of austerity measures, and could conclude the fiscal year with a surplus. In fact, they say that the current budget shortfall is a direct result of tax cut policies Walker enacted in his first days in office.

"Walker was not forced into a budget repair bill by circumstances beyond he control," says Jack Norman, research director at the Institute for Wisconsin Future -- a public interest think tank. "He wanted a budget repair bill and forced it by pushing through tax cuts... so he could rush through these other changes."

Got that? The state could have possibly ended up with a surplus this fiscal year if it WEREN’T FOR THE DIRECT ACTIONS OF THE GOVERNOR HIMSELF!!

And that’s the reason why unions need to be broken up, and the National Guard called out to deal with any striking workers.

I would like to know what all those Tea Partiers who voted for this criminal were thinking. How much worse do they think a Democrat would be in that office? This guy is gutting the future of most of the middle class who are unfortunate enough to work for the state. “Get the government off the throat of the people! And let’s bust all unions and take away all collective bargaining rights at the same time, O.K.?”

AAARRRGGGHHHHH!!!!

Well, political gamesmanship has hit home on a personal level.

I have almost stopped blogging about politics, as nothing makes any sense these days. There isn't anything logical that exists anywhere in our political process or discourse about which someone like me can make logical statements. It's like attempting to deconstruct Alice In Wonderland. It ain't happenin'.

But this one, I thought I might as well comment about, since it seems I am going to take a personal hit. You see, I am a federal worker. And President Obama, in yet another capitulation to the crazies on the Republican side of the aisle, has proposed to freeze the pay of all federal workers for two years. This will, of course, do absolutely nothing to address the country's massive deficit and will likely make the economic situation in this country that much worse, with that much less money in play in which to lubricate the cogs and gears of our economy. I thought actually that was the most pressing issue, to "get the economy moving again." But I guess we are all about empty gestures at this point.

I am of two minds about this. On one level, I am actually not too upset with this. I am pretty well paid for someone in my profession. I am not hurting. I took my current job because a host of other reasons, not related to pay, mostly about the negatives at my last job. I certainly didn't take a job with the federal government because I wanted to get rich. I am still not rich, but I am better paid than I would have been had I remained in the commercial sector. I will say that this is definitely not a true statement for most government employees. It is just that my profession, engineering, happens to compete directly with those companies who also employee engineers. So, the government feels they need to pay well in order to compete for those same employees. But, as I said, I didn't take my current job because of the pay.

So, I am actually willing to "do my bit." I can take a hit financially if it were to help out the overall situation. I certainly can't complain, in that I do have a steady job and the prospects of losing it are pretty small. That is a whole lot more than can be said about most of the work force in this country. So, I will count my blessings in that regard.

But here's the thing. I see this as a meaningless gesture that is supposed to placate the Republican party and their "balance the budget at any cost!" nutjobs. It isn't likely to do anything to help bring the deficit under control. I just get this feeling that I am being asked to "suck it up" so the money saved from these pay freezes will be used to finance, in part, the continuation of the Bush tax cuts for the top 2% wage earners. They certainly aren't being asked to "suck it up." In fact, extending those tax cuts for the wealthy seems to be a higher priority for the Republicans than actually doing something about the deficit. And this is what burns me. This is, yet again, an inequitable response. Everything is tilted toward the rich and powerful these days. Everything.

I would really, really like someone to explain to me why I don't deserve any pay raise for the next two years, but it is of paramount importance to keep the tax rates of the very rich at historic lows. Please, Republicans, explain that to me.

I have maintained, for quite some time, that the stock market is just legalized gambling.

If you know what you are doing, there are opportunities there for you to make a killing. There are also opportunities for you to lose your life’s savings, even if you do know what you are doing. I remember one person at work was very offended when I said that during a discussion. "No, it's not!" It was like I had insulted his mother. That was the depth of his reaction. But I think I have been proven to be correct. The stock market is just one big roll of the dice, in my mind.

May 6, 2010 is a case in point. Getting near the end of the trading day, The Dow Jones Industrial dropped almost 1000 points. It was in total freefall. Brokers were panicking, CNBC “analysts” were panicking, and certainly those people heavily invested in the stock market that set up their Blackberries to get programmed alerts if certain things happen were panicking.

From HuffPo:

At this point no one knows why. Some say it was sudden burst of worries about Greece's debt and the increasing possibility of a default that might cause a run by global investors. Others point to a "trading error." Giant high-speed computers generate millions of trades based on instructions embedded in computer programs designed to move fast enough to beat everyone else. So when there's a glitch in one of them it can immediately spread to all the other programs designed to move just as fast. Some say it was an erroneous trade entered by someone at a big Wall Street bank who mistyped an order to sell a large block of stock, and that the big drop in that stock's price (Procter & Gamble?) triggered "sell" orders across the market.

Regardless of why it happened, it's further evidence that the nation's and the world's capital markets have become a vast out-of-control casino in which fortunes can be made or lost in an instant -- which would be fine except for the fact that most of us have put our life savings there. Pension funds, mutual funds, school endowments -- the value of all of this depends on a mechanism that can lose a trillion dollars in minutes without anyone having a clear idea why. So much of the market now depends on computer programs and mathematical models that no one fully understands, so much trading is in the hands of a few people whose fat thumbs or momentary carelessness might sink the economy, so much of global wealth now depends on who can move their money quickest at the slightest provocation -- that we are toying with financial disaster every day. The luck or foolishness of a few traders, and inside knowledge and information that some possess and others don't, combined with ultra high-speed computers, put us all at the whim of a system whose risk is way out of proportion to any public benefits.

The stock market now is just one more out-of-control element in our out-of-control society, and this event, if there was still a doubt after the the Big Meltdown of 2008, should give absolute proof for anyone willing to actually see. That’s the problem, though. There are very few people who are willing to actually see what is going on and to take action. There are too many vested interests that want to maintain things exactly the way they are.

This is just such an obvious indication (to me, anyway) that we have lost control of the beast who once served us so well. If this article is true and no one really knows what happened, or if they do know for certain that it was some sort of “error” on a big trade that triggered all sorts of computer programs to automatically kick in with their sell orders, then we have big trouble on our hands. This is Frankenstein’s Monster. We will never know when it will turn on its “Masters.”

The stock market is a very strange thing, in my mind. It’s original intent was to provide industry the working capital it needed to invest in itself. Money has to come from somewhere in order to expand. Therefore, stocks and stockholders were invented as a way for the company to obtain the capital it needed and for the stockholders to have an investment in that company. I wasn’t around back then, of course, but my understanding of the early Twentieth Century mindset is that stocks were regarded as long-term investments. They were something to be held on to, rather like U.S. Savings Bonds are today. The stock market was not really invented for people and corporations to make a quick buck or huge fortunes by manipulating their holdings on a daily basis. But that’s what it has become, and everyone has gotten in on the game.

I haven’t trusted the stock market in a long time. I have had almost 100% of my holdings (mostly two 401K accounts) in bonds and stable growth funds. Yes, I know that is terribly, terribly conservative. Financially, that’s who I am. If I don’t understand something, I don’t get involved. And I certainly didn’t understand what was going on in the late 90’s and early “aughts.” As a result, I wasn’t pulling down 15 to 20% a year on my investments, like everyone else in this country seemed to think was some sort of God-given right. If they weren’t making that much, there was something terribly wrong and they were going to go find somewhere else to put their money. I have talked to those kinds of people, so I know that mindset existed. However, all these mutual funds and other types of investments that were packaged such that people thought their investments were diversified all collapsed pretty much at the same time, for the same reason. Many people lost 50% or more of their investments, which they had regarded as safe. My investments, on the other hand, kept plugging away at their usual very slow growth, without a single drop in value through this period. Who knows? Maybe I would have come out about the same if I would have been making all sorts of money on my investments and then lost it back. I might be just about in the same place as I am now. But I know that I didn’t really want to experiment with what I see as my retirement. That is not a place for me to be playing around in something I know that I don’t understand. But yet, I seem to be one of the few people in the country who thought like that. Even now, people and companies are still trying to find a way back to those heady days of 20% return on investments. Maybe so. Maybe those days will return eventually. But I know one thing. Until I can be convinced that our financial system isn’t some sort of out-of-control monster that will turn around and devour its “master” without warning, I know that I am going to remain a very conservative investor.

UPDATE: Via Attaturk.

Reports from CNBC and our own sources suggest that it was a Citigroup (C) trader that accidentally entered a sell BILLION-size sell trade, when they meant to do million.

Since the market came back and only ended down over 3%, all the focus now is on what happened. There's going to be an investigation into Proctor & Gamble (PG) trading, Accenture (ACN) and the market as a whole.

O.K., this pretty much makes my point. Any time we can experience an almost instantaneous meltdown of the Dow Jones due to a single keystroke error, then this system is really screwed and we are f*cked. I don't care if the market recovered pretty quickly. This is a screwed up system. One more thing in our society that no one really understands, but is yet entirely of our making.

UPDATE II: It appears that people who should know still have no idea of what caused this instantaneous crash and almost as instantaneous recovery. People, human beings, are going through a huge number of trades to try to figure out what happened. They don't know. I am very intrigued by several reports that a number of trades were "obviously in error" and were being cancelled. Really? Now, just how do people know that? We couldn't tell with the Florida ballots in 2000. What makes for an "erroneous trade"? And how do you "cancel" them without screwing over someone else? Maybe it was because some huge corporations lost lots of money, and that is what made their trades "erroneous?" I wonder if the little guy is getting as good attention.

This all reminds me of that old movie "War Games", where a computer sort of takes over and mixes reality and a test exercise to the possible elimination of the human species. Rather silly movie, if nothing more than the presence of Matthew Broderick. However, the part about the computer taking over and causing vast destruction, without the slightest comprehension by the people who designed the computer and without a hope in hell of heading off the catastrophe? That seems really plausible right now.