Steve Malanga of the Manhattan Insitute says that public-sector unions are now at the center of a new left-wing coalition of "tax eaters," which consist of everyone whose livelihood depends in large part upon government regulation, employment or entitlements. AFSCME, one of the more powerful public-sector unions, has grown from only 100,000 members in 1955 to over 1.4 million today.

For now, the unions are flush with victory and their success in humbling Mr. Schwarzenegger. But their victory may be a Pyrrhic one if it accelerates the flight of California private-sector jobs and capital to other states, taking the source of much-needed government revenue at the same time. Even the most powerful economic engines can rust. Take New York City, which today has the same population it did two generations ago but a total of 30% more government workers. During the same period, the number of Fortune 500 headquarters in New York City has dwindled to 30 from 140. When the unions win too much political clout, the overall economy inevitably suffers.