Bruce Rauner’s battle to dismantle ‘blue model’ Illinois

Been awhile since I’ve written explicitly about Walter Russell Mead’s Blue Model analysis concerning the decline of, as WRM explains, “the core institutions, ideas and expectations that shaped American life for the sixty years after the New Deal don’t work anymore.”

Gone is the world of heavily unionized and regulated Corporate America, dominated by oligopolies, with little overseas competition, to a large extent living off the huge technological advances of the 1920s and 1930s. As Ashwin Parameswaran has described the era:

Most large American firms were also largely insulated from strong shareholder pressure to improve profitability. This combination of low import competition, low rate of entry by new firms and weak shareholder pressure meant that there was very little process innovation or cost control. It is not a coincidence that many view the 1950s and 1960s as a golden age of economic growth and stability. It was essentially a period when neither firm owners, managers or workers felt the threat of failure or even had the incentive to improve efficiency or control costs. It was a period of stability for all, masses and classes alike.

Blue Industry continues to evanesce, while Blue Government isn’t far behind — though further than it should be. There are three key elements of the Blue Government meltdown, according to WRM: (a) the exploding costs of government-provided benefits, (b) the inefficient, progress-inhibiting, unionized public workforces, (c) the inability of nostalgic bureaucrats and politicians to think outside the Blue Model.

Yet the existence of Blue Government will continue to be pressured by (a) private-sector workers with insecure jobs and defined contribution plans who don’t want to pay higher taxes to support Blue Government bureaucrats, (b) voters frustrated by the quality contrast between private- and public-sector services, and (c) the inability of the Blue Model to properly regulate the 21st century economy.

Keeping the Blue Model in mind, here is a bit from this weekend’s WSJ profile on Bruce Rauner, the new governor of blue-state, Blue Model Illinois:

Welcome to government in Illinois, the worst-managed state in the country. The Land of Lincoln is buried under staggering debts, including a projected $6.7 billion operating gap for the next fiscal year and an $111 billion unfunded pension liability. Government unions and politicians engage in legal collusion that fleeces taxpayers. Between 2002 and 2014, 86% of Illinois state lawmakers received union contributions, according to the Illinois Policy Institute.

All of this takes an already chilly business climate down another few notches. Over the past five years Illinois lost 41,000 manufacturing jobs while Indiana gained 51,000 according to the Bureau of Labor Statistics. As Illinois has economically trailed its neighbors in the past dozen years, 277,000 people have left the state, according to the Census Bureau.

There is the Blue Model in action. And Rauner’s attempt to reform it is one of the great political-policy stories happening right now. One with great import beyond the Prairie State.