Thursday, June 14, 2012

Let's not go banning any unions just yet (or "When is a stimulus not a stimulus?")

The always-insightful Mickey Kaus sees one common denominator in the reasons why the stimulus package failed:
1) The “shovel ready” jobs weren’t shovel ready (as Obama himself has admitted), leading to a delay in the stimulating effect;
2) The money to save the jobs of  “firemen … and policemen … and … teachers” did not just go to firefighters and policemen and teachers. It also went to non-essential bureaucrats (e.g., headquarters paper shufflers, “diversity coordinators”);
3) The money bailed out states that were paying unsustainable pensions and benefits, enabling them to keep paying those benefits, so that when the federal subsidy ran out the states couldn’t afford to keep workers on the payroll and laid them off. (Wisconsin, by cutting back on benefits and collective bargaining, could afford to avoid big layoffs, says Morrissey).
Note that these criticisms apply even if you think countercyclical Keynesian spending helps (as I do) and that public jobs are a good way to do that (ditto). None of the objections would have applied to a Roosevelt-style WPA that immediately put the unemployed to work on useful construction jobs. They’re criticisms of BHO, not FDR. …

P.S.: It would be reductive and predictable for me to point out that all three of these Obama-era problems have a single cause: public employee unions[.]
Let me start by admitting something that many will find unforgivable: I supported the stimulus. I supported the federal government borrowing close to $1 trillion to try to jump start the economy. And even though Obama said it was going to go to “shovel-ready” projects like road construction, I knew at least some of that money was going to go to “rent-seekers” and political supporters of Obama. And I didn’t care. Why? Because even if some of the money was siphoned off to political allies (and at least some is in just about every federal appropriation, no matter the party in charge), it was still going into the economy. One way or another, it was going to be spent. And that would help the economy.

Obviously, the stimulus didn’t work. When I formed my opinion on the stimulus, while I knew that at least some of that money was going to go to rent-seekers and political supporters of Obama, I did not figure that all of it would. But it did, which is why the stimulus failed. That doesn’t mean the Keynesian concept was wrong. That means it was poorly executed.

Conservatives do not like to admit this, but the government can and does create jobs. Not just public sector jobs but private sector jobs as well. A lot of them. How? Well, liberals will not like to admit this, but road construction for one. Defense for another.

Which is where I must again bring up the F-22 Raptor. Reputed to be the best fighter jet in the world, we had originally ordered 700 of them. But we cancelled the contract after 150. No rational reason was given as to why.

Building the Raptor would have been killing two birds with one stone. Thousands of high-paying jobs – both in building the aircraft, providing its parts and raw materials –
and improvement of our national defense. With the cancellation, those jobs are gone.

The Raptor was stimulus. You put that trillion dollars wasted on the actual stimulus package into the Raptor and other defense projects, I guarantee you stimulate the economy. Someone has to build the planes, someone has to build the tanks, someone has to build the ships. Someone else has to supply the parts and raw materials. And those someones spend their money. The money you pay for the weapons is plowed right back into the economy.

Canceling the Raptor was an idiotic decision, both from the standpoint of national defense and the economy. The only part of the budget Obama has been willing to cut is defense, yet defense is one of the few parts of the budget that can actually stimulate the economy. Many leftists don’t like defense, yet they seem to have no other ideas as to how to stimulate the economy.

One other point to bring up: public employee unions.

Unions in general have been taking a beating lately, especially public employee unions, both in the court of public opinion and at the polls. But before we ban any unions all together, let’s step back for a minute.

(Full disclosure: it may come as a big surprise to some, but I am the product of a union household and am generally pro-union. Except the baseball players union. That bunch is just evil.)

Unions were originally formed because of abuses by management as to wages and working conditions. Many of those issues were corrected with (horrors!) new laws and regulations. Many, but not all. And of those that were corrected, it takes vigilance to make sure we don’t go back to the old ways. Unions got way too big in the US and abused their power, but remember that before that time corporate management had abused its power, leading to the creation of unions in the first place. The pendulum swings back and forth. There has to be a balance.

Public employee unions were and are a special creature. Many today are calling for the abolition of public employee unions, especially after their despicable behavior in Wisconsin. Despite my recent history with them, I will not join in that call. Public employee unions were formed for many of the same reasons private sector unions were formed – wages and working conditions. Just because you’re being paid by tax money does not mean you should only be paid slave wages and forced to work 80-hour weeks in dangerous conditions.

Having been a public employee for a long time, I can attest that most of them are good people who want to do a good job. There are a lot of stories out there about how public employees are paid much more than their counterparts in the private sector. I tend to bristle at those stories. In Indiana, public employees tend to be paid less than their counterparts in the private sector. Government tries to make up for it with better benefits and working conditions. Most of us, especially those of us in the legal profession, understand and accept that. You don’t go into public employment here expecting to get rich doing it. Many of us go into it thinking we want to help people, or we want to work for the “good guys” and, believe it or not, government for all its faults usually is the good guy – for every story reported about government overreach, corruption or incompetence, there are ten unreported stories that are precisely the opposite. Which is how it’s supposed to be. News is by definition the unusual, and it’s unusual for government to be the bad guy. Slow, bumbling, confused, maybe, but not bad.

But there is another reason for public employee unions – protection from patronage abuses. It used to be that with every change of party every office was swept clean. Not anymore. I’ve worked for both Republicans and Democrats and am proud to have done so. It is good to work for both, to work with both, to have both working alongside each other day after day. I’ve got news for Republicans: Democrats are people, too. The vast majority are not the corrupt, nefarious traitors you often make them to be. They might be wrong, but that doesn’t make them bad. And, Democrats, Republicans are people, too. The vast majority are not the greedy, sanctimonious busybodies you often make them out to be. They might be wrong, but that doesn’t make them bad.

You don’t learn that, though, if you’re living and working in a Republican or Democrat cocoon, like I did for many years. Patronage helps create and preserve that cocoon. Patronage also protects corrupt and incompetent employees every bit as much as any union does if not moreso, just along different lines and using different methods. This is one reason why the argument that “even” Franklin D. Roosevelt did not allow public employee unions carries no weight with me as an argument against allowing public employee unions – Roosevelt was the product of the patronage system, and he most certainly wanted to and did use that same system in office for his own ends.

But the special nature of public employee unions creates special problems, of which Wisconsin was an example. Those public employee unions, like private sector unions, can support candidates for office, especially monetarily. Many of those candidates, once elected, feel they owe their office to the unions, and try to give them increased compensation in return. Which enables the union to support more candidates, who then give more tax money to union members. From a budgetary standpoint, it is a vicious cycle. There is no balance here; the union is in effect on both sides of the negotiating table.

That is the problem with public employee unions. Leave aside their detestable conduct in Wisconsin, in which they physically threatened legislators to support their agenda, which in turn led to a lot of the public anger (including my own) against those unions. Physically threatening our legitimately elected public officials is utterly, dangerously wrong and should be opposed at every turn. But that does not make the union itself illegitimate or remove its reason for existence. The problem is the cycle mentioned.

What is the solution? I must say I do not know. Prohibit public employee unions from making political contributions? Prohibit legislators who take campaign money from public employee unions from voting on appropriations to union members? I don’t know.

Any ideas?

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