The Republican and Democratic parties are not mirror images of each other. They are built on radically different foundations. The Republican Party raises money and volunteers from the real economy. It cannot take anyone’s time or money by force. It has to ask. The Democratic Party lives off government spending and laws that force Americans to fund it. Much taxpayer money gets cycled through the organizations of the Left. Labor unions demand dues from workers as a condition of employment because Democrats have written laws to require it. Trial lawyers reap millions of dollars thanks to rulings from Democratic judges.
The political structures that inform, control, and fund the American Left—labor unions, trial lawyers, big city political machines, and beneficiaries of government spending, contracts, welfare payments, and grants—all depend on government. Without state power, their political muscle would atrophy. Now that Republicans have control of twenty-four state governments—the governorship and both houses of the legislature—they should repeal laws that fund and perpetuate the Democrats’ political machine.
There are three key principles to ensuring long-term political success for Republicans: Spend less, remove the union bosses’ legal power to extort dues, and reform tort law so that trial lawyers cannot siphon unjustified billions from the economy. If we want to reverse our present “road to serfdom,” we need a plan for each one.
Republicans have always known that more government spending breeds dependency and Democrats. The tea party movement is revolutionary because it’s an authentic political movement focused on reducing government spending, and thus government workers and contractors. The first tea party success was ending the corruption inherent in congressional earmarks. Previously beneficiaries of millions in earmark spending would kick back tens of thousands of dollars in campaign contributions. The outlawing of most earmarks has led to a dramatic decline in the reported amounts spent by lobbyists in Washington. Earmarks were the weapon of choice for liberal Democrats looking to seduce the local Chamber of Commerce. Democratic politicians would vote to tax and regulate businesses but then show up for the ribbon cutting bought by “free” federal dollars. Sound policy has since stopped this transactional corruption on the Left and also forced Republican congressmen to win hearts and minds through pro-growth policies, not the distribution of stolen loot. Banning earmarks, along with winning the 2011 budget showdown and enforcing the sequester, has cut $2.5 billion in projected government spending over the next decade.
Big labor’s contribution to the Left’s war chest is in jeopardy from reformers at the state level. This is no small feat.
Republicans scare their children with bedtime stories about the overwhelming political power of organized labor. Some 14 million workers pay dues averaging at least $500 per year, and this brings more than $7 billion into the coffers of public- and private-sector union bosses. But the real cost of negotiating and managing labor contracts was estimated in the Beck v. Communications Workers of America Supreme Court case in June 1988 at less than 20 percent of dues. If true, American unions are now spending $1.4 billion on actual work and $5.6 billion is available for “other stuff.” Like politics—specifically Democratic politics. The twenty largest labor union PACs give 90 percent of their contributions to Democrats.
Wisconsin Governor Scott Walker’s dramatic and successful reform of public-sector labor unions has shown Republicans in other states not only that withdrawing abusive monopoly powers from organized labor saves taxpayers millions in unfunded liabilities and gold-plated benefit packages, but also that it helps defund one of the pillars of the modern Democratic Party. Since Act 10, which prevents unions from automatically skimming money off workers’ paychecks, was signed into law in March 2011, tens of thousands of workers have taken a pass on paying union dues. The Bureau of Labor Statistics reported a drop in total union membership, public- and private-sector, of 46,000 (339,000 to 293,000) in the state in 2011 and 2012. During the late 2013 recertification elections, government workers rejected 81 out of 408 collective bargaining units. And the percentage of Wisconsin public-sector employees represented by unions fell from 53.4 percent in 2011 to 37.6 percent in 2013 (this includes employees who are counted as union members but who opt not to pay union dues). All this has cost organized labor tens of millions of dollars.
Other states are following Walker’s lead. Michigan and Indiana became the twenty-third and twenty-fourth states to enact right-to-work laws that forbid unions from requiring dues as a condition of employment. No more “pay dues or no job.” Workers there are no longer forced to finance Big Labor’s politics.
Yet there’s an even bigger threat haunting our republic: trial lawyers. A study by the Manhattan Institute back in 2003 found that tort costs in the United States were more than $200 billion annually, which was then more than 2 percent of the entire economy. The report states that 19 percent of all tort costs go to plaintiff’s attorneys, meaning trial lawyers raked in $40 billion that year. That’s almost six times the $7 billion that labor unions have to throw around.
Shouldn’t rich trial lawyers support Republicans? Obama’s ranting about the top one percent suggests this would be the case, but not a chance. The American Association for Justice, formerly and more accurately known as the Association of Trial Lawyers of America, gave 96 percent of all its contributions so far this year to Democrats. A fluke? They gave Democrats 96 percent in 2012, 97 percent in 2010, and 95 percent in 2008. The Washington Examiner’s 2011 investigative reporting showed that, of political contributions given in 2010 by the employees and partners at the top 110 plaintiff’s firms in the United States, 97 percent went to Democrats.
Democrats’ reliance on this legal gravy train was highlighted two years ago when Sherry Sylvester of Texans for Lawsuit Reform wrote an article claiming that 80 percent of all contributions to the state Democratic Party over the previous decade came from trial lawyers. The bean counters at Politifact weighed in to declare that she was mostly right, but that the real fraction was closer to 75 percent. Read that again: Three-quarters of the Texas Democratic Party’s cash came from trial lawyers.
Our bloated legal system, all the while, comes with real economic consequences, hampering growth and redirecting money from productive activities to parasitic ones. The Pacific Research Institute, in its 2007 report “Jackpot Justice,” estimates that America’s bloated tort system wastes $589 billion each year—which calculates to an excess “tort tax” of $7,848 on every family of four.
Many political fights take place in Washington, D.C. But as Karl Rove, who was central to the fight against trial lawyers in Alabama from 1994 to 2000 and Texas from 1988 to 1998, tells me, “Most civil actions are filed in state courts so if the trial lawyers grab control of a state, then it runs the risk of becoming what Texas, Alabama and other states were—a judicial hell where justice was for sale and the trial bar ran over business, the rule of law, and reason, with huge implications for the business climate and the state’s economy.”
Texas took a great step in 2003 by passing H.B. 4, a 96-page bill signed into law by Governor Rick Perry, which contained many of the most important potential reforms of tort law: Only those individuals who cause harm are liable for damages and only to the extent of their own fault. Damages are limited to what the plaintiff incurred—ending “phantom damages.” Medical malpractice “non-economic damages” were capped. “Forum shopping”—through which plaintiffs could choose their own judge and jury pool—was eliminated. The Wall Street Journal named H.B. 4 the “Ten Gallon Tort Reform.”
Now Louisiana’s Republican state legislators, Governor Bobby Jindal, and the state’s business community are hoping to tackle the trial lawyers. The legislature, with the support of the Louisiana Association of Business and Industry, is moving a series of six bills that would make many of the same reforms.
But passing such laws is only part of the battle. For tort reform to stick, Republicans in every state need to win at least three fights: electing a pro-tort reform legislature, electing a pro-reform governor, and electing or appointing a majority of the state supreme court that will not strike down tort reform.
Good reforms have been struck down in Texas, Arkansas, Illinois, Oklahoma, Washington, Oregon, New Hampshire, Kentucky, Missouri, Georgia, and most recently and outrageously in Florida. (Charlie Crist’s greatest betrayal was not switching parties, but nominating pro-trial lawyer judges to the state supreme court.) Passing anti-tort state laws without keeping an eye on the state Supreme Court is a waste of time and energy. Trial lawyers have spent millions trying to elect friendly judges and fought to isolate those judges from voters.
Tort reform unites the entire business community. Campaigns to elect pro-reform judges do not suffer from the business sector’s self-imposed bipartisanship in campaign contributions to state legislators or congressmen. One hundred percent of a company’s or trade association’s dollars can flow into the coffers of solid judges. No hedging of bets here. Even the business community gets that there is too much at stake. Victory reduces the deadweight cost of litigation, creates jobs and opportunities, and, as a benefit to Republicans, defunds a major source of money to the Left. That is key to understanding how Republicans can do better in 2014 than simply playing out the advantages granted by Obama’s lack of success and low popularity, and running GOP House and Senate candidates who can win both the primary and the general elections.
The Democratic Party is the party of government. That is key to understanding how Republicans can do better in 2014 than simply playing out the advantages granted by Obama’s lack of success and low popularity.
Now is the time to choose the issues and policies we focus on and enact not to titillate the “base” but to change the correlation of forces between the Right and Left.
Good policy is good politics. And vice versa.