Protesters took to the streets of Cairo about a month ago, and the protests did not end when President Hosni Mubarak stepped down on February 11 and handed power to the military. The revolution in Egypt followed on the heels of protests in Tunisia, and revolutions are cascading across the Middle East, Africa, and the Far East. "Days of rage" have taken place in Yemen, Algeria, Morocco, Jordan, Bahrain, Iran, Iraq, Libya, Oman, and China. There are reports that two vice presidents of Google as well as union members were behind the unrest in Egypt.
Unlike in Egypt where the military refused to fire on their citizens, civilians and anti-government protesters in Libya are being gunned down by troops and mercenaries. Libyan dictator Moammar Gadhafi is clinging to power even though his diplomats at United Nations headquarters in New York and other embassies worldwide are calling on him to resign for shooting his own people. An influential Muslim cleric Yusuf al-Qaradawi, the spiritual leader of the Muslim Brotherhood, has issued a fatwa instructing Libyan soldiers to shoot Gaddafi if they have an opportunity.
Arabs are fleeing to Europe, and European leaders are concerned that their countries will have protests. Gadhafi is threatening that a flood of immigrants from Africa will go to Europe if his regime falls.
Oil prices are surging because of the unrest in the Middle East. The price of oil jumped 8.5 percent in one day, and gasoline prices are already over $4.00 in California. To add to these problems, Gadhafi has ordered his security services to start blowing up oil pipelines and cutting off the flow of oil to Mediterranean ports. Chaos reigns in Libya and may cascade into Saudi Arabia, causing even more problems with the oil.
The United States is seeing protesters in the streets of Madison, Wisconsin, as Governor Scott Walker and Republican state legislators attempt to solve the financial problems of the state. Governor Walker recognizes that his state does not have enough money to meet its obligations, and he wants to make some changes in order to balance his budget. He wants a budget repair bill that would limit the power of unions and require union members to help pay for their health insurance and pensions. Teachers called in "sick" last week in order to spend their time protesting the Governor's plan and were joined by members of other unions.
The state of Wisconsin faces an immediate deficit of $137 million for the fiscal year ending on July 1, plus another $225 million for other back debts. The budget repair bill would require state employees to pay about 5.8 percent toward their pensions, an amount about the same as the private sector national average. The bill would also require state employees to pay about 12 percent of their healthcare benefits, an amount about half the private sector national average. The Wisconsin bill would also limit the ability of government workers' unions to collectively bargain. Without this ability, union dues will not be taken out of paychecks, employees can choose whether or not to join unions, and unions lose power and money to help elect more Democrats to state and federal offices.
Democratic state legislators in Wisconsin left the state in an effort to stop the bill, but Walker and the Republican legislators are standing firm. If the bill does not soon pass, about 6,000 state employees will be laid off their jobs. The majority of people in Wisconsin seem to be siding with the Governor because they understand that government employees generally receive higher pay and better benefits than their private sector counterparts.
President Obama added to the problems in Wisconsin when he sided with the protesters and called the new bill an "assault" on the unions. This is not the first time that Obama has sided with protesters against governments. He openly supported the protesters in the Middle East - except those protesting in Iran and Libya. Obama knows that he will need the support of the unions in order to be reelected in 2012.
The political fight over unions is escalating as labor leaders are planning new protests in dozens of other capital cities. These protests have brought the role of labor unions into the national debate as well as who should make the necessary sacrifices in order that states can balance their budgets. Yesterday thousands of steelworkers, autoworkers, and other labor activists started protesting in Indiana against a bill there that would weaken the power of unions in the private sector. Public unions in Indiana have already lost their collective bargaining rights. Yesterday a House committee approved a new bill that would free private-sector employees from the requirement to belong to unions and to pay union dues. Employees would then have the right to work without union influence if they so choose. Democratic legislators in Indiana also fled to Illinois in order to avoid a vote.
A protest took place in Columbus, Ohio, today to oppose a bill to strip collective-bargaining rights from about 400,000 public employees. Tennessee is also considering a bill that would dissolve the collective bargaining rights of the state's teachers. Hundreds of police are marching in the streets of Hartford, Connecticut, in opposition to proposed police layoffs. Across the state of Idaho, teachers are walking picket lines to oppose proposals to lay off hundreds of teachers and restrict collective bargaining rights. Union leaders in Michigan are calling for protests against proposals giving emergency financial managers power to break union contracts in schools and cities as well as remove elected officials.
Public employees at the federal, state, and local levels are generally paid higher wages and better benefits than the private sector. As thousands of people have lost their jobs in the private sector in the past two years, federal government employees have increased by 200,000. There is no requirement for the federal government to have a balanced budget - yet, but many of the state constitutions include a requirement for a balanced budget. Governors are wise to attempt to reign in the unions and expenses in order to balance their budgets. If Obamacare is declared to be constitutional, states will be required to pay more of the expenses in Medicaid in their states as well as other requirements.
I expect that protesters will march in more of our states, probably starting in the Northeast, as state and local governments attempt to balance their budgets. Anchorage has been making cuts for over a year in an effort to keep expenses within the income of our city. As Republicans in the US Congress attempt to cut costs and bring the federal expenses down, conservatives in state and local governments are trying to do the same on their level. I certainly hope that conservatives are successful in reigning in government expenses, but I also expect much more chaos in our nation as we work through these problems.
Passive Income MD – Podcast #32
7 hours ago