Public Sector Unions Use Politicians to Extract Taxpayer Dollars for Themselves; They, in Turn, Reward Politicians with Their Votes

Obama and the Government Employees

The horrible public schools, high taxes, and crime have driven families out of Chicago. The city’s job base cannot compete with anti-union places like Houston and Phoenix. The largest employer in the city of Chicago is the Federal government. Followed by the City of Chicago Public School system. Other major employers are the city of Chicago, the Chicago Transit Authority, the Cook County government, and the Chicago Park District. These thousands of government workers provide the backbone of the coalition for higher taxes, generous pensions and “political stability.” Chicago’s political system is inefficient and costly. There are no term limits in Chicago. The Democratic Party has controlled the Mayor’s office since 1931(a big city record). There’s no opposition: Democrat’s control 49 out of 50 seats on the city council. Corruption is everywhere. Barely a month can go by without a major scandal. The FBI has the largest public corruption squad in the United States located in Chicago. Chicago voters don’t seem to care. Those who care about high taxes, good public schools, and low crime are a small minority in Chicago. Chicago's long decline continues. In the coming years, public pension commitments will test even the high tax tolerant Chicago residents. Look for low regulation, low tax Houston to overtake Chicago in population in the next eight to 15 years. [Steve Bartin, The Decline of Chicago: The City That Doesn't Work, New Geography, June 19, 2008]

The government does not create a traditional sellable product and thus produces no revenue outside of what it collects from taxpayers. As of 2008, the average federal salary was $79,197, compared with $49,935 for the average private sector employee. In other words, the average federal bureaucrat makes almost twice as much as the average working taxpayer who pays their salaries. Add the value of benefits like health care and pensions, and the gap grows even bigger. The average federal employee’s benefits add $40,785 to his annual total compensation, whereas the average working taxpayer’s benefits increase his total compensation by only $9,974. In other words, federal workers are paid on average salaries that are twice as generous as those in the private sector, and they receive benefits that are four times greater. [Brandon Greife, The Public Sector Weight Around Taxpayers’ Necks, RedStates.com, May 4, 2010]

The public sector, in most instances, is a monopoly. The public sector provides essential services. It is the very nature of government to provide on a monopoly basis those services which everyone needs. Public sector decisions are political decisions no matter how great their economic impact. Government makes decisions every day that have profound economic consequences, but these decisions are based on political, not economic, considerations. In the public sector, decisions that are politically popular but economically ruinous can get you reelected; decisions that are economically sound but politically unpopular are ruinous. The private sector is competitive; there are alternative sources of supply for the goods and services produced. The private sector provides nonessential services. Private sector decisions are economic decisions no matter how great their political impact. In the private sector, economic decisions that have bad political consequences can make you unpopular, but decisions that are politically popular and have bad economic consequences can put you out of business. [David Y. Denholm, Beyond Public Sector Unionism: A Better Way, Public Service Research Foundation, 2001]

February 12, 2010

American Thinker - Barack Obama may not have learned much at Harvard regarding the Constitution, but he did learn in Chicago how politics works: the Chicago way. Reward supporters, and keep the bribery as opaque as possible. Chicago mores have been brought to Washington.

There has recently been a flurry of critical columns examining the devastation done to our nation's fiscal health by government workers. Our cities, states, and federal government are in critical condition. Cities have begun declaring bankruptcy, and states such as California and Illinois are tottering. The federal government, which supplied a big chunk of stimulus dollars merely to keep states on life support, is running massive deficits and accumulating debts as far as the eye can see. What caused the problems?

There are two sides of the ledger responsible. Declining state tax receipts (considered "earnings" by government) played a role (the receipts side). But the real scourge has been on the expense side of the ledger: salaries and pension benefits given -- and I do mean given -- to government workers.

Public-sector unions have amassed great power to extract taxpayer dollars from politicians. Politicians reward government workers with our dollars, and they in turn are rewarded at election time by donations, free labor (phone banks, people who pass out flyers), and votes.

"Fully one-third of the 'stimulus' money went to state and local governments -- an obvious payoff to public employee unions that contributed so much to Democrats," as Michael Barone noted.

Barone describes the corruption at the core of this dealing:

Public-sector unionism is a very different animal from private-sector unionism. It is not adversarial but collusive. Public-sector unions strive to elect their management, which in turn can extract money from taxpayers to increase wages and benefits -- and can promise pensions that future taxpayers will have to fund.

The results are plain to see. States such as New York, New Jersey and California, where public-sector unions are strong, now face enormous budget deficits and pension liabilities. In such states, the public sector has become a parasite sucking the life out of the private-sector economy.

Obama and the Democrats have been well-rewarded for their patronage. Unions contributed up to 400 million dollars to Democrats in 2008 and engage in skullduggery to advance their aims. The latest revelation: a union-funded slush fund secretly targeting GOP candidates through the use of money-laundering and front groups. Unions have funded all sorts of political activity -- undoubtedly the major reason Obama, in one of his first acts as president, ended union disclosure rules requiring them to report how their members' dues were being spent. So much for transparency.

This is one reason why the recent Supreme Court decision leveling the playing field, allowing corporations to exercise their First Amendment rights by contributing to candidates, inflamed unions and President Obama. He violated precedent by attacking the Supreme Court in his State of the Union address. Maybe the title should be changed to State of the Unions.

Franklin Roosevelt, of all people, was alert to the danger of this collusion between politicians and unions. He maintained that "the process of collective bargaining, as usually understood, cannot be transplanted into the public service." Yet it has been transplanted; today, a majority of union workers for the first time work for the government. And the government has brought good things to them.

Government work is one sector of our economy that is booming (besides pawnshops and bankruptcy lawyers). Rich Lowry noted the paradox: We suffer, and government workers prosper.

For most Americans, the Great Recession has been an occasion to hold on for dear life. For public employees, it's been an occasion to let the good times roll.

The percentage of federal civil servants making more than $100,000 a year jumped from 14 percent to 19 percent during the first year and a half of the recession, according to USA Today. At the beginning of the downturn, the Transportation Department had one person making $170,000 or more a year; now it has 1,690 making that.

The New York Times reports that state and local governments have added a net 110,000 jobs since the beginning of the recession, while the private sector has lost 6.9 million.

The gap between total compensation of public and private workers has only widened during the downturn, according to USA Today. In 2008, benefits for public employees grew at a rate three times that of private employees.

Nor does the boom look likely to end anytime soon.

The President's new budget can be symbolized by the old wartime poster: Uncle Sam Wants You. Until Barack Obama came into office, the number of federal employees had held relatively constant. But that was so 2008. That number jumped from 1.875 million in 2008 to 1.98 million in 2009, and it looks to jump a farther in 2010 -- a 14.5% leap in two years. (And the boom is in federal agencies, not the military; hiring at the IRS, EPA, and the Justice Department is a big portion of the increase. Big Brother is getting bloated -- maybe we can get Michelle to work on this obesity problem.)These jobs come with munificent salaries and benefits.

Federal workers now earn, in wages and benefits, about twice what their private sector equivalents get paid. They often have Cadillac health plans and retirement benefits far above the private sector average: 80 percent of public-sector workers have pension benefits, only 50 percent in the private sector. Many can retire at age 50.

The pensions are manipulated upwards and gold-plated, too, as I noted in "Taxpayers: Eat your hearts out, suckers." Many others have begun to notice the drain on public finances by pensions for government workers, and the public pension tsunami has just begun. This is the engine driving our ballooning deficits and public debt. Merely rolling federal employee pay back to where it was in 1998 relative to the private sector, and shifting state and local government pay back to 2005 relative levels, would save $116 billion annually from government costs.

We know this will never happen as long as Democrats are in power. They like this perpetual motion machine. A government bureau, Ronald Reagan quipped, is the nearest thing to eternal life we'll ever see on earth. But we can try, and there is certainly potential for Republicans to seize on this problem as it begins to gain traction in the public mind. The issue seems tailor-made for Tea Partiers.

Meanwhile, Big Brother, like many big brothers, has become a bully. The Internal Revenue Service is on a hiring binge to crack down on taxpayers; fees on candy, plastic bags, iPod downloads, sugar, and many other things that make life fun are going up and up; our tax rates are inflating; and studies show that there has even been an explosion in parking tickets and fines for every picayune sort of "violation" that the bureaucrats can dream up in all their spare time -- phantom taxes, they have been called. The leviathan must be fed.

The massive debt accumulating will be our responsibility to pay in the decades ahead. Obama blames Bush for the problems he inherited, but we know whom to blame for the problems our children and grandchildren will inherit. This debt will be an albatross around the neck of our economy. Our taxes will go toward these pensions and debt repayment instead of investments that will help our economy grow.

But even this good deal is not good enough for Barack Obama. He is a very mischievous man whose Modus Operandi is to distract and defame and engage in a great deal of sleight of hand. If he truly is a "sort of God" (as one of his adoring Newsweek pundits characterized him), that God would be Janus of two faces. While he talks the talk about the deficit and freezing discretionary spending, Obama engages in a spending binge that would make Imelda Marcos proud. But look what else the Magician-in-Chief is doing: giving even more money and benefits to government workers, and doing it in a very untransparent and sneaky way.

Barack Obama is planning a major overhaul of the Federal government pay system that would boost pay for government workers while loosening scrutiny on how they do their jobs. When he released his budget, there was a section titled "Improving the Federal Workforce." Sounds good, right? But watch what the man and his minions do, not what they say.

First, the document tries to justify the high salaries government workers are paid (responding to the mounting criticism).

But then comes the trickery, disguised as "reform" and "refreshing" the system. This team is addicted to euphemisms (and their thesauruses are well-thumbed).

John Berry, director of the Office of Personnel Management, is engaged in a major effort to overhaul the G.S., or General Schedule, classification and pay system that began in 1949. Change is coming, and it will gladden the hearts and fill the wallets of government workers. In a Washington Post interview:

Berry mused about eliminating the first two ranks of the 15-grade GS system and adding grades 16 and 17. Berry did not explicitly advocate a pay raise for federal workers during the interview, but those in the added grades presumably would be paid more than the current top rate.

Berry made noises about tying pay to performance (consider this chaff to deflect observation and criticism), but then he tipped his hand:

"I'm a strong proponent of breaking the chain to the desk and breaking the chain to the time clock," he said. He wants government to "move in a direction to empower and trust our employees to get the job done ... and not focus so much on where they're sitting and what hours they're sitting there."

Does that sound like a plan to increase efficiency of government workers? Give them higher pay, but allow them to set their own hours and work from...where? Starbucks? Home? The zoo?

And how is this "reform" going to happen? Are the people or our representatives going to have a say in how our money is spent? Need one ask?

The plans are in the final stages and will be put in place by a presidential memorandum or executive order. In other words, they'll be implemented by presidential fiat. This is the form of government we have now -- or at least did, before Scott Brown was elected.

Government work...our growth industry.

Collectivists advocate controlled elections, controlled media, controlled education, the elimination of free speech, disarmament of the population, fiat money, a cartelized health-care system, military imperialism, and global government. Individualists advocate honest elections, a competitive media, an educational system responsive to parents, encouragement of free speech, a well-armed citizenry, sound money, freedom-of-choice in health care, a non-interventionist foreign policy, and national sovereignty. [Freedom Force International]

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. [Justice Litle, Is America’s Economic Recovery on the Whole Based on a Rotten Sham?, Daily Markets, April 20, 2010]

"If one understands that socialism is not a share-the-wealth programme, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or, more accurately, socialism is not a movement of the downtrodden masses, but of the economic elite." [Gary Allen, None Dare Call It Conspiracy, Concord Press, 1971]

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