BY MICHAEL P. RETHMAN – It’s not only Republican governors who are cheering for Wisconsin Governor Scott Walker and Ohio’s Governor John Kasich as they work to rein-in public employees’ union in those state. Democrats, including Hawai‘i’s own Neil Abercrombie, holding the top jobs in other statehouses may be closet fans – because they face the same problems Walker and Kasich are bravely trying to solve as they seek to balance their budgets.
On the federal level, I am pessimistic about President Obama on this issue. Obama faces no statutory requirement to balance the federal budget and will soon have increased the total federal debt by over 30% in just his first three years in office. And Obama’s support of labor unions is so broad that he’s ventured well beyond supporting government employee’s unions and orchestrated the de facto nationalization of General Motors and Chrysler Corporations. In the process, the Obama Administration stiffed those who had lent money to these companies and instead awarded equity to the United Auto Workers Union. Furthermore, AFL-CIO President Richard Trumka, former thug-in-chief of the United Mine Workers Union and who has the temerity to call Tea Party protesters “mobs,” recently bragged to be visiting the White House or in telephone contact with the White House every day – despite a half-dozen of Obama’s Cabinet members never having received even a single phone call from the President during his first two years as President.
Viewed from an historical perspective, even progressive Democrat and U.S. President Franklin D. Roosevelt recognized back in the mid-20th Century that permitting public employees to engage in collective bargaining would be a foolish mistake and perhaps even illegal. FDR knew then what is obvious today, namely that teachers’ unions and other public employees’ unions would not be subject to the same restraints as would private sector unions – namely the need for the company that pays the bills to earn a profit.
Government enterprises are largely insulated from free market pressures to be both effective and efficient. Not surprising, government enterprises are frequently ineffective and almost never efficient. This appears even more true in Hawai‘i than in other states. (Our education bureaucracy’s inability, despite top-quarter per-pupil expenditures, to elevate itself out of the nether reaches of national performance in K-12 education (including worst in the nation on the Education Freedom Index) is a good example. Another example is the deplorable condition of Hawai‘i’s highways – recently rated the second worst in the nation, despite our high taxes and the absence of a freeze-thaw cycle that shortens the life of highways in most other states.)
To be fair, government employee’s unions both here in Hawai‘i and across the nation have become highly effective at one thing, namely building voting blocs that help protect government jobs and employee benefits no matter how much they drain from the private economy that pays the bills. In the several decades in which government employee’s unions have been legal, government officials at all levels have been pressured by public employee unions and their voting blocs to award nonsensical salaries (often based on longevity rather than productivity) plus overly generous life-long benefits that officials hope someone else will figure out how to pay for long after they are gone. This Ponzi Scheme has now run its course and it’s unraveling at both state and federal levels.
Wisconsin touts itself as the birthplace of public employee unions and it’s fitting that the beginning of the end of public employees’ self-serving games starts in Madison. We in Hawai‘i can only hope that our new governor is paying attention to Governors Walker and Kasich. We can only hope that Abercrombie sees that despite how unpopular New Jersey’s governor Chris Christie was while cutting NJ’s budget that once done, Christie is now wildly popular in his home state. Finally, we can only hope Abercrombie and the state legislature will cut state expenditures and not raise or institute new taxes, especially on retirees — many of whom are mobile and motivated enough to simply leave the state – taking their economic clout and other substantial non-monetary resources with them. We can only hope.