Saturday, October 25, 2014

Government Control and Public Sector Unions vs. Private Sector Unions ... Individual Freedoms and Taxpayer Rights vs. Government Growth and Intrusiveness

{NOTE: Keenan's post today links to a timeless 1964 speech by Ronald Reagan about what our Founding Fathers intended. Reagan discusses the dangers and record of government "help" vs. individual freedom, as well as the false peace associated with attempts to appease those who wish to do harm both to us and that which we value instead of confronting our enemies directly.

The Reagan video is timeless and concerns the opportunities and blessings that We the People enjoy by being citizens of a free, open and democratic society.

Please take the time to read what Keenan says and then to watch the Reagan video as well.

For my fellow oldsters, the message serves as a stark reminder of how far we haven't come these past 50 years.

And for all Americans, it's a warning about the dangerous 'government knows best' road we've been on for far too long.}
And after reading and watching Keenan's excellent post, if you have time, the following is what I have to say today.

Public sector unions and private sector unions are inherent enemies. The public union depends on government growth and higher taxation, whereas the private union relies on private investment and growth if its membership is to thrive and survive.

The more we spend on government, the less there is available to spend in the more productive private sector. Facts are stubborn things.

The Emerging Political Divide Between Public and Private Unions says this in part:

"Chicago Mayor Rahm Emanuel has earned the ire of government-worker unions by supporting cuts in pension benefits for some city workers and closing failing schools. The head of the American Federation of Teachers, Randi Weingarten, has pledged $1 million of union money to unseat Mr. Emanuel, up for re-election in February.

Private unions have a different take. Building trade groups like the Construction and General Laborers’ District Council approve of the mayor’s infrastructure spending and have donated heavily to his campaign. The hotel-workers union Unite Here has endorsed him for his work promoting Chicago tourism. “There’s a lot of support I have from working men and women,” Mr. Emanuel told a reporter earlier this year, when the subject of public-union opposition came up.

The labor rift in Chicago politics has emerged elsewhere, too. Government workers are increasingly fighting to defend their pay and benefits, including trying to defeat officials running for re-election who have preached fiscal reform. But private unions have embraced some of these same candidates, arguing that when economic growth is sluggish, politicians should focus on creating jobs. . . .

"In Wisconsin, Gov. Scott Walker ’s Act 10 bill in 2010 reduced collective-bargaining rights for many public workers and sparked widespread labor demonstrations. The American Federation of State, County and Municipal Employees has named Mr. Walker their No. 1 target for defeat this year. But Mr. Walker signed legislation in 2013 that streamlined mining regulations in order to attract outside investment, not to mention the private jobs that would come with it.

Every Democratic member of the Wisconsin legislature opposed the bill on environmental grounds, but blue-collar unions like the Wisconsin Pipe Trades and the Milwaukee Buildings and Trades Council supported the governor. When Mr. Walker advocated for the regulatory changes during his state of the state address in 2013, more than a dozen blue-collar workers stood behind him and unfurled a giant Wisconsin state flag. Several trade unions, including those representing pipefitters, carpenters and heavy equipment operators, later contributed to Mr. Walker’s campaign.

“We lost our jobs,” said Lyle Balistreri of the Milwaukee Buildings and Trade Council when asked how he could support the governor. “We suffered 30%, 40%, 50% unemployment in many areas of the state.”"

Now let's turn our attention to underfunded public sector pensions and their potential costs to taxpayers in countless cities and states across America.

The money to pay these pensions to public sector employees will in large part have to come from taxing private sector employees, including union members. And these tax increases will inevitably reduce consumer spending, jobs and private sector investment throughout the broader economy. 

The same dollar can't be spent twice, in other words, even though the politicians and public unions would like for us to believe otherwise.

Are taxpayers going to be on the hook and obligated to pay the public sector pensions when cities are broke and unable to pay them?

According to a common sense judicial ruling in California concerning the city of Stockton, the answer is no. And the logic applies equally well to cities and states across the nation, which is a good omen for taxpayers and a bad sign for public sector unions and their members.

A Calpers Comeuppance is subtitled 'A judge says the giant public pension isn't above bankruptcy law:'

"A major political battle line these days is between public-union pension funds and taxpayers who pay the bills. Taxpayers won a major victory . . . when federal judge Christopher Klein ruled that the California Public Employees’ Retirement System (Calpers) isn’t protected from cuts in the city of Stockton’s bankruptcy trial.

This is big and hopeful news because pension costs are partly responsible for driving Stockton broke. Pensions equal nearly 40% of the city payroll and are growing. The San Joaquin Valley city will spend $28 million next year on pensions—twice as much as in 2012 when it declared bankruptcy—and $36 million by 2020. That’s one in every five tax dollars.

The city last year raised its sales tax by 0.75% to cover rising labor costs and hire more police. Creditors are taking big haircuts. . . .

In 2011 Calpers adopted a policy of discounting the termination fee at a rate tied to 10- and 30-year Treasurys in lieu of the 7.5% rate it ordinarily uses to calculate unfunded liabilities. This sleight-of-hand blows Stockton’s $212 million unfunded pension liability up to $1.6 billion."

Summing Up

We can't spend our way to prosperity. Neither can government spending grow to the sky if the private sector is to have the money to invest. 

Whether we decide to have a vicious or virtual circle of growth and prosperity for all Americans, the choice is clearly ours to make. It's a simple matter of establishing priorities.

And there's no greater issue confronting America. Will we continue to favor growing the non-productive tax funded public sector over investing in the private sector? It's a choice for We the People to make, and in my view, it's a no-brainer. 

The rights of all citizens, taxpayers and future generations must trump those of government 'leaders' and their public union friends and allies.

That's my take.

Thanks. Bob.

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