Wisconsin protesters can win, but not as they might think

The recession saw the loss of 8.4 million jobs. Only a portion have returned. Just to avoid more losses, the economy needs to create at least 125,000-150,000 jobs a month. It’s barely doing that, as seen in Friday’s report of 192,000 new jobs created in February.

President Obama’s actions since taking office are a good barometer of a political shift away from a focus on redistribution of wealth toward creating wealth.

He came to power criticizing “fat cats” on Wall Street, for example, but by late last year, his new chief of staff came from a Wall Street firm. His 2009 economic stimulus was loaded with federal subsidies for state-level jobs. But after that didn’t do much to boost the economy, he is now loosening federal regulations on business. And he backs a $600 billion effort by the Federal Reserve to lower interest rates to encourage private firms.

Now the government focus is on expanding options for individual opportunity – in starting new businesses, retraining workers for new jobs, and improving worker productivity with better infrastructure. Even in the debate over government support of housing, Obama is leaning toward encouragement of renting. Worker mobility in moving to new jobs is seen as a way to boost upward social mobility.

Unions need to fit into this new picture, one that deals ultimately with the origin of wealth.

In the 19th century, labor was seen as the source of prosperity. Laws began to favor workers. By the end of the 20th century, with the collapse of communist regimes and the shift of Western liberals like Bill Clinton and Tony Blair toward market-friendly policies, the world began to see that innovation in ideas and the wise use of risk capital were the true creators of wealth. Think Google, Apple, and Facebook, or a revived Ford and GM – after their unions shifted to helping the companies turn around.

Issues such as the “right” of public workers to strike could become less contentious if governments saw their role as boosting the ability of private enterprise to adopt competitive ideas that create jobs. Working for government may no longer be regarded as a lifelong career if there is a vibrant economy.

Compensation scales for public workers could then be easier to match up with private-sector ones. Many states, for instance, want to move to 401(k)-style retirement plans or adopt health plans like those offered by companies.

A bad economy needs good ideas – and more cooperation. Public unions and state leaders would be less at odds if they both saw government as a tool for growth based on creating jobs around commercial ideas.

The political heat now seen in state capitals like Madison or Columbus might cool down fast if that were to happen.

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