The new issue of National Affairs is out, which means it's time to read CCNY professor Daniel DiSalvo's piece on public sector unionism. DiSalvo explains the history of public sector unions, and the damage they've done to state finances. My favorite part:
Even President Franklin Roosevelt, a friend of private-sector unionism, drew a line when it came to government workers: "Meticulous attention," the president insisted in 1937, "should be paid to the special relations and obligations of public servants to the public itself and to the Government....The process of collective bargaining, as usually understood, cannot be transplanted into the public service." The reason? F.D.R. believed that "[a] strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable."
Sometimes I wonder how FDR would react to today's liberalism. I think there would be a lot he'd dislike.
Also, economist Derek Kan has a great piece in the American on a troubling aspect of the financial regulation law. Kan worries that the law's "Orderly Liquidation Fund" will become a way for Congress to finance zombie companies with taxpayer money. Here's Kan:
We have already seen enough backdoor bailouts to know that when the government says “liquidation,” it often means propping up companies for years while funneling billions of taxpayer funds to counterparties and creditors. Consider AIG, which over the past two years has received over $130 billion in taxpayer funds. The company’s “global divestiture program” is entering its eighteenth month of restructuring with no end in sight. The “liquidation” of AIG funded billions to counterparties and creditors, which included foreign banks.
Not to mention GM, which has resumed political giving despite being owned by the U.S. government. (Memo to Congressional Republicans: You may want to add a proposal to the Pledge that would forbid government-owned entities from participating in politics.) How long will GM be owned by the Treasury? Who knows! According to this report, GM's IPO, scheduled for November, will likely be smaller than anticipated, in order to "place more pressure on the government to win higher prices in future offerings." How about we place more pressure on the government to end the bailout(s)?