California’s Public Sector Union Deep State

By Ed Ring
February 28, 2017

Deep State: A body of people, typically influential members of government agencies or the military, believed to be involved in the secret manipulation or control of government policy.
–  Oxford English Dictionary

The term “Deep State” has been around for at least a decade, but it has emerged into common parlance in reference to the alleged opposition by elements of the U.S. intelligence community to the presidency of Donald Trump. An insightful analyst who has written extensively about the deep state on his blog “Of Two Minds,” is Charles Hugh Smith. In one recent commentary, Smith created a diagram of the deep state, showing how it encompasses far more than just the intelligence agencies, but constitutes the entire so-called “establishment,” where virtually every powerful elite special interest in the United States is inter-linked.

One may debate endlessly regarding to what extent there is a “deep state,” and whether or not the conflicts we are witnessing at the national level are internal conflicts within deep state special interests or a conflict between a united deep state and a populist insurgency. But the diagram that Smith invented is useful, and has been co-opted here with new labels. Because we have a “deep state” here in California. And at the center is not the intelligence community, but public sector unions.

CALIFORNIA’S PUBLIC UNION “DEEP STATE”

In the above diagram, at the center of it all are Public Unions. Immediately adjacent to them are the entities where they exercise the most influence, if not outright control – public education, state and local politicians and bureaucrats, and political consultants. Almost, but not entirely co-equal to these public unions are the corporate special interests, businesses that either depend directly on government contracts and subsidies for their prosperity, or businesses that depend heavily on a favorable legislative environment to survive.

Public sector unions in California collect and spend over $1.0 billion per year in dues. To the extent this money doesn’t flow directly into the pockets of politicians, political consultants and lobbyists, it goes to public relations firms, law firms, and academic institutions to engage in non-political public education. This soft money is heavily supplemented by funds coming from public entities and liberal oligarchs who support the same political agenda as the public unions.

The primary goal of the public sector union deep state is bigger government. Public sector unions thrive and grow by increasing their membership and increasing their dues revenue. This means more government programs is their first priority, while the value and benefit of government programs is a secondary priority. As a result, those elites that benefit from bigger government become junior partners to the public unions.

For example, public unions demand excessive pay, benefits and work rules that increase headcount. The impact this has on the financial sector is obvious. The increased cost of government creates budget deficits, which spells opportunities for bond underwriters. Pension formula enhancements create more business for pension funds and the powerful financial special interests who are clients of the pension systems.

How the public union deep state impacts the rest of the business sector is not quite as obvious, but equally detrimental to the interests of ordinary Californians. At the core of this is the synergy between the “green” lobby and the government unions. The green lobby opposes development of infrastructure on principle, the government unions want those funds for their pay and benefits. The business sector adapts to this reality, especially those businesses that benefit from politically contrived, artificial scarcity.

This would include public utilities, who operate on fixed profit percentages and therefore only make more money if they charge more expensive prices per unit – hence their alliance with the renewable energy industry. Developers who seek government grants for subsidized “low income” housing justify their appeals based on the unaffordable prices for homes and rentals. Proponents of high-speed rail and light rail benefit from the neglect of roads and freeways. Silicon Valley “green” entrepreneurs sell expensive internet enabled appliances that purportedly save the planet by consuming marginally less electricity and water.

Meanwhile, the teachers union and their cohorts on the faculties of public universities promote identity politics as the most compelling moral preoccupation a conscientious young idealist can possibly embrace. In their orbit, the grievance industry, the multi-lingual industry, the campus and community organizers and green activists all find a welcome home, and all of this provides a useful distraction from the reality: California’s public sector union deep state has elevated the cost-of-living to punitive levels in order to consolidate their own power and wealth.

The next time you hear the phrase “deep state,” know that it is alive and well. Right here in sunny California.

Ed Ring is the vice president of policy research for the California Policy Center.

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