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Strictly Right Radio – Episode 88

Uncivil Unions
By Ann Coulter

As Obama rakes in historic campaign contributions from Wall Street money, liberals claim Republicans are beholden to “the rich.” However that may be, it is far more true, and far less remarked upon, that the Democratic Party is the party of public sector unions.

And now, the nation watches helplessly as public sector unions and their Democratic allies say to Wisconsin Gov. Scott Walker: Nice state you got there, governor. Be a shame if something bad happened to it.

For Democrats, the purpose of government is to generously provide jobs for people who otherwise couldn’t be hired — because their skills, attitude or sense of entitlement are considered undesirable in the private sector. And no, I’m not just talking about Barack Obama.

Democrats use taxpayer money to fund a government jobs program, impoverishing the middle class and harming the people allegedly helped by the programs — but creating a vast class of voters who owe their jobs to the Democrats.

This is a system designed to ratchet up costs. Look at the history of every entity where public employees have unionized, and you will find that not only are government workers paid more, but there are also a lot more of them doing a lot less useful work.

There could be two students per class, and the Democrats would still be campaigning for “smaller class size,” so that the government would be required to hire more public school teachers to staff classes with one student. For Democrats, the purpose of public education in this country is not to teach children; it’s to create jobs for “educators.”

Forget the nonsense about working men with dirt under their fingernails, slugging it out at dangerous jobs with a heartless management riding them to get more production at lower wages –- those guys are what liberal journalist Harold Meyerson calls “dead weight.”

We’re talking about government employees, most of whom — when they show up to work at all — sit in comfortable, air-conditioned offices, kick off at 3 p.m., are entitled to endless sick days, personal days and holidays, whose performance can never be evaluated and who retire at age 50. (Again, I’m not focusing just on Barack Obama here.)

Government employees are even worse than welfare layabouts. In a triple-whammy for the taxpayer, they are: (1) hideously expensive, (2) impossible to fire, and (3) doing things you don’t want done at any price.

Hey, guess what? I’m from the government, and I can burn down your garage for $300!

NO! I’M NOT INTERESTED!

OK, fine, I’ll do it for you for $20.

BUT I DON’T WANT MY GARAGE BURNED DOWN AT ANY PRICE!

OK, the guys with the matches and gasoline will be by sometime between 10 a.m. and 5 p.m. one day next week.

As with so many other things, such as vegan restaurants and the crack epidemic, California leads the country in destruction by government unions.

California’s civil service unions have employed all the usual thug techniques –- regular strikes (illegal until the California Supreme Court approved them in 1985), rolling strikes, the “blue flu” (cops and other public-safety workers calling in “sick”) — all of which are almost as harmful to the state as when they actually show up for work.

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Why Koch Industries Is Speaking Out
Crony capitalism and bloated government prevent entrepreneurs from producing the products and services that make people’s lives better.

By CHARLES G. KOCH

Years of tremendous overspending by federal, state and local governments have brought us face-to-face with an economic crisis. Federal spending will total at least $3.8 trillion this year—double what it was 10 years ago. And unlike in 2001, when there was a small federal surplus, this year’s projected budget deficit is more than $1.6 trillion.

Several trillions more in debt have been accumulated by state and local governments. States are looking at a combined total of more than $130 billion in budget shortfalls this year. Next year, they will be in even worse shape as most so-called stimulus payments end.

For many years, I, my family and our company have contributed to a variety of intellectual and political causes working to solve these problems. Because of our activism, we’ve been vilified by various groups. Despite this criticism, we’re determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.

Both Democrats and Republicans have done a poor job of managing our finances. They’ve raised debt ceilings, floated bond issues, and delayed tough decisions.

In spite of looming bankruptcy, President Obama and many in Congress have tiptoed around the issue of overspending by suggesting relatively minor cuts in mostly discretionary items. There have been few serious proposals for necessary cuts in military and entitlement programs, even though these account for about three-fourths of all federal spending.

Yes, some House leaders have suggested cutting spending to 2008 levels. But getting back to a balanced budget would mean a return to at least 2003 spending levels—and would still leave us with the problem of paying off our enormous debts.

Federal data indicate how urgently we need reform: The unfunded liabilities of Social Security, Medicare and Medicaid already exceed $106 trillion. That’s well over $300,000 for every man, woman and child in America (and exceeds the combined value of every U.S. bank account, stock certificate, building and piece of personal or public property).

The Congressional Budget Office has warned that the interest on our federal debt is “poised to skyrocket.” Even Federal Reserve Chairman Ben Bernanke is sounding alarms. Yet the White House insists that substantial spending cuts would hurt the economy and increase unemployment.

Plenty of compelling examples indicate just the opposite. When Canada recently reduced its federal spending to 11.3% of GDP from 17.5% eight years earlier, the economy rebounded and unemployment dropped. By comparison, our federal spending is 25% of GDP.

Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay.

Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.

The purpose of business is to efficiently convert resources into products and services that make people’s lives better. Businesses that fail to do so should be allowed to go bankrupt rather than be bailed out.

But what about jobs that are lost when businesses go under? It’s important to remember that not all jobs are the same. In business, real jobs profitably produce goods and services that people value more highly than their alternatives. Subsidizing inefficient jobs is costly, wastes resources, and weakens our economy.

Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs. However, even when such policies benefit us, we only support the policies that enhance true economic freedom.

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Unions vs. the Right to Work
Collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.

By ROBERT BARRO

How ironic that Wisconsin has become ground zero for the battle between taxpayers and public- employee labor unions. Wisconsin was the first state to allow collective bargaining for government workers (in 1959), following a tradition where it was the first to introduce a personal income tax (in 1911, before the introduction of the current form of individual income tax in 1913 by the federal government).

Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion. For a teachers union, collective bargaining means that suppliers of teacher services to all public school systems in a state—or even across states—can collude with regard to acceptable wages, benefits and working conditions. An analogy for business would be for all providers of airline transportation to assemble to fix ticket prices, capacity and so on. From this perspective, collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.

In fact, labor unions were subject to U.S. antitrust laws in the Sherman Antitrust Act of 1890, which was first applied in 1894 to the American Railway Union. However, organized labor managed to obtain exemption from federal antitrust laws in subsequent legislation, notably the Clayton Antitrust Act of 1914 and the National Labor Relations Act of 1935.

Remarkably, labor unions are not only immune from antitrust laws but can also negotiate a “union shop,” which requires nonunion employees to join the union or pay nearly equivalent dues. Somehow, despite many attempts, organized labor has lacked the political power to repeal the key portion of the 1947 Taft Hartley Act that allowed states to pass right-to-work laws, which now prohibit the union shop in 22 states. From the standpoint of civil liberties, the individual right to work—without being forced to join a union or pay dues—has a much better claim than collective bargaining. (Not to mention that “right to work” has a much more pleasant, liberal sound than “collective bargaining.”) The push for right-to-work laws, which haven’t been enacted anywhere but Oklahoma over the last 20 years, seems about to take off.

The current pushback against labor-union power stems from the collision between overly generous benefits for public employees— notably for pensions and health care—and the fiscal crises of state and local governments. Teachers and other public-employee unions went too far in convincing weak or complicit state and local governments to agree to obligations, particularly defined-benefit pension plans, that created excessive burdens on taxpayers.

In recognition of this fiscal reality, even the unions and their Democratic allies in Wisconsin have agreed to Gov. Scott Walker’s proposed cutbacks of benefits, as long as he drops the restrictions on collective bargaining. The problem is that this “compromise” leaves intact the structure of strong public-employee unions that helped to create the unsustainable fiscal situation; after all, the next governor may have less fiscal discipline. A long-run solution requires a change in structure, for example, by restricting collective bargaining for public employees and, to go further, by introducing a right-to-work law.

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By George F. Will

Hitherto, when this university town and seat of state government applauded itself as “the Athens of the Midwest,” the sobriquet suggested kinship with the cultural glories of ancient Greece. Now, however, Madison resembles contemporary Athens.

This capital has been convulsed by government employees sowing disorder in order to repeal an election. A minority of the minority of Wisconsin residents who work for government (300,000 of them) are resisting changes to benefits that most of Wisconsin’s 5.6 million residents resent financing.

Serene at the center of this storm sits Republican Scott Walker, 43, in the governor’s mansion library, beneath a portrait of Ronald Reagan. Walker has seen this movie before.

As Milwaukee County executive, he had similar dust-ups with government workers’ unions, and when the dust settled, he was resoundingly reelected, twice. If his desire to limit collective bargaining by such unions to salary issues makes him the “Midwest Mussolini” – some protesters did not get the memo about the new civility – other supposed offenses include wanting state employees to contribute 5.8 percent of their pay to their pension plans (most pay less than 1 percent), which would still be less than the average in the private sector. He also wants them to pay 12.6 percent of the cost of their health care premiums – up from about 6 percent but still much less than the private-sector average.

He campaigned on this. Union fliers distributed during the campaign attacked his “5 and 12″ plan. He says his brother, a hotel banquet manager, and his sister-in-law, who works at Sears, “would love to have” what he is offering the unions.

For some of Madison’s graying baby boomers, these protests are a jolly stroll down memory lane. Tune up the guitars! “This is,” Walker says, “very much a ’60s mentality.”

He does, however, think there is sincerity unleavened by information: Many protesters do not realize that most worker protections – merit hiring; just cause for discipline and termination – are the result not of collective bargaining but of Wisconsin’s uniquely strong and century-old civil service law.

“I am convinced,” he says, “this is about money – but not the employees’ money.” It concerns union dues, which he wants the state to stop collecting for the unions, just as he wants annual votes by state employees on re-certifying the unions. He says many employees pay $500 to $600 annually in union dues – teachers pay up to $1,000. Given a choice, many might prefer to apply this money to health care premiums or retirement plans. And he thinks “eventually” most will say about the dues collectors, “What do we need this for?”

Such unions are government organized as an interest group to lobby itself to do what it always wants to do anyway – grow. These unions use dues extracted from members to elect their members’ employers. And governments, not disciplined by the need to make a profit, extract government employees’ salaries from taxpayers. Government sits on both sides of the table in cozy “negotiations” with unions.

A few days after President Obama submitted a budget that would increase the federal deficit, he tried to sabotage Wisconsin’s progress toward solvency. The Washington Post: “The president’s political machine worked in close coordination . . . with state and national union officials to mobilize thousands of protesters to gather in Madison and to plan similar demonstrations in other state capitals.” Walker notes that in the 1990s, Wisconsin was a trendsetter regarding school choice and welfare reform. Obama, he thinks, may be worried that Wisconsin might again be a harbinger.

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Reckless Spending
Barack Obama isn’t stupid. High-speed rail is.

By Thomas Sowell

Nothing more clearly illustrates the utter irresponsibility of Barack Obama than his advocacy of “high-speed rail.” The man is not stupid. He knows how to use words that will sound wonderful to people who do not bother to stop and think.

High-speed rail may be feasible in parts of Europe or Japan, where the population density is much higher than in the United States. But, without enough people packed into a given space, there will never be enough riders to repay the high cost of building and maintaining a high-speed rail system.

Building a high-speed-rail system between Los Angeles and San Francisco may sound great to people who don’t give it any serious thought. But we are a more spread-out country than England, France, or Japan. The distance between Los Angeles and San Francisco is greater than the distance from London to Paris — by more than 100 miles.

In Japan, the distance between Tokyo and Osaka is comparable to the distance between Los Angeles and San Francisco. But the population of Osaka alone is larger than the combined populations of Los Angeles and San Francisco — and Tokyo has millions more people than Osaka. That is why it can make sense to have a “bullet train” running between Osaka and Tokyo, but makes no sense to build one between Los Angeles and San Francisco.

However little President Obama knows or cares about economics, he knows a lot about politics — and especially political rhetoric. “High-speed rail” is simply another set of lofty words used to justify continued expansion of government spending. So are words like “investment in education” or “investment” in any number of other things, which serve the same political purpose.

Who cares what the realities are behind these nice-sounding words? Obama can leave that to the economists, the statisticians, and the historians. His point is to win the votes of people who know little or nothing about economics, history, or statistics. That includes a lot of people with expensive Ivy League degrees.

To talk glibly about spending more money on “high-speed rail” when the national debt has just passed a milestone by exceeding the total value of our annual output, for the first time in more than half a century, is world-class chutzpa. The last time the U.S. national debt exceeded the value of our entire annual output, it was due to the cost of fighting World War II.

When World War II ended, in less than four years of American participation, we began paying down the national debt. But our current national debt has been expanding by leaps and bounds in relatively peaceful times — and with no sign of an end in sight for the next decade.

Since more than 40 percent of our national debt is owed to foreigners, this means that goods and services produced by Americans, equal in value to more than 40 percent of our current output, will have to be sent overseas, free of charge, by either this generation or the generations that follow.

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The Buck Doesn’t Stop Here
President Obama is applying ‘a scalpel to the discretionary budget, rather than a machete.’

By STEPHEN MOORE

We hear that the White House was caught off guard by the near-universal panning of President Obama’s budget proposal. So yesterday morning Mr. Obama was rushed in front of the TV cameras for a press conference to rebut the wave of negative reaction to his status quo spending plan released on Monday.

The press was unusually harsh in its questioning, and Mr. Obama was clearly on the defensive. At one point he even said that the media is too “impatient” for budget cuts. Asked why he isn’t willing to cut more spending to bring the deficit down faster, he said he’s applying “a scalpel to the discretionary budget, rather than a machete.”

What has the White House worried is not the negative reaction from Republicans but criticism from fellow Democrats and friends in the media. MSNBC, for example, called the budget “the big punt.” The Los Angeles Times said that it “landed with a thud.” Even the New York Times groused that “the budget is most definitely not a blueprint for dealing with the real long-term problems that feed the budget deficit.” During a Senate Budget Committee hearing yesterday, North Dakota Democrat Kent Conrad said that the president’s budget “cannot be the answer for this country’s fiscal future.”

The overarching problem for Team Obama is that the budget contains trivial cost savings. In the first two years the deficit is actually worsened. Democratic deficit hawks are upset about the total absence of savings in Medicare, Medicaid and Social Security. Mr. Obama explained his whiff on entitlement reform by saying it should “be a negotiation process” and that Republicans and Democrats need to get “in that boat at the same time so we don’t tip over.” It was hardly Harry Truman saying “the buck stops here.”

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The Cee Lo Green Budget
The cynical and unrealistic White House budget.

This was supposed to be the moment we were all waiting for. After three years of historic deficits that have added almost $4.5 trillion to the national debt, President Obama was finally going to get serious about fiscal discipline. Instead, what landed on Congress’s doorstep on Monday was a White House budget that increases deficits above the spending baseline for the next two years. Hosni Mubarak was more in touch with reality last Thursday night.

The White House actually touts as tight-fisted a budget proposing a record $1.645 trillion deficit for fiscal 2011, due largely to a new surge in spending to 25.3% of GDP. That’s more spending than in any year since 1945. Federal debt held by the public—the kind we have to pay back—will rise to 75.1% in 2012, which is the highest since 1951 and more than double what it was as recently as 2007. (See the nearby chart.)

Senior Economics Writer Stephen Moore breaks down the President’s spending and taxing plans. Also, Anne Jolis, editorial writer for WSJ Europe, has the surprising data on extreme weather events.

This $3.73 trillion budget does a Cee Lo Green (“Forget You,” as cleaned up for the Grammys) to the voter mandate in November to control spending. It leaves every hard decision to the new House Republican majority. And it ignores almost entirely the recommendations of Mr. Obama’s own deficit commission. No wonder the commission’s Democratic co-chairman, Erskine Bowles, said Monday that this budget goes “nowhere near where they will have to go to resolve our fiscal nightmare.” And he’s an ally.

How unserious is this budget? Although the White House trumpets $2.18 trillion in deficit reduction over the next decade, those savings are so far off in the magical “out years” that you can barely see them from here. More than 95% of the savings would happen after Mr. Obama’s first term in the White House is over, and almost two-thirds of the promised deficit reduction would arrive after 2016. Pretending to cut deficits by pushing all real cuts into the future is Budget Flimflam 101.

From hard experience, we know that what matters are the cuts and reforms a White House is willing to make now. The Obama budget doesn’t cut a penny from the deficit in the last seven months of fiscal 2011. Over the next three years—through 2013—the spending reductions in this budget add up to a paltry $20 billion net, out of a projected $3.5 trillion deficit. That’s a 0.57% reduction in red ink and less than what the feds spend every two days.

As for Medicare, Medicaid, Social Security and other entitlements, which account for roughly 60% of federal expenditures, the proposed savings are close to zero. The President would allow these programs to continue on automatic pilot, meaning they nearly double to $2.7 trillion in 2021 from $1.4 trillion in 2010.

Every serious analyst agrees that the time to fix these retirement programs is before 75 million graying baby boomers start collecting the benefits and voting as beneficiaries rather than as net payers. Meanwhile, Medicaid spending would grow by 115% over the next decade thanks to that renowned deficit reducer, ObamaCare.

The proudest White House boast is that its budget would cap domestic discretionary spending at current levels for five years. These are programs ranging from NASA to the Washington Metro to school lunch programs to wind turbine grants, which overall and including stimulus expanded by more than 80% in Mr. Obama’s first two years. This spending freeze would cut these programs from 2011-2013 by a grand total of $14 billion.

By contrast, the plan now emerging from House Republicans would cut about $80 billion immediately, and nearly $280 billion over three years—some 20 times the White House savings. Mr. Obama’s budget also assumes annual economic growth of more than 4% from 2012-2014. That’s far more robust than anything this recovery has produced so far, and it is at least a percentage point higher than most private economists or the Congressional Budget Office predict.

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Runaway Trains
Obama’s high-speed rail plan is a fiscal pipedream.

We suppose every President is entitled to a pipedream, but President Obama’s vow in his State of the Union address that 80% of Americans should have access to high-speed rail in 25 years is a doozy. Vice President Joe Biden has followed up by proposing $53 billion in high-speed rail funding over the next six years. Seriously?

On recent evidence, this train is running in reverse. Though the Obama Administration has allocated more than $10 billion for high-speed rail projects the past two years, the new Republican governors of Wisconsin and Ohio, Scott Walker and John Kasich, have rejected the federal money. They don’t want to put their taxpayers on the hook for projects destined for Insolvency Junction. Florida Governor Rick Scott is also reconsidering his state’s proposed Orlando-Tampa line.

Even California, that famous incubator of pipedreams, is having second thoughts. The state has proposed an 800-mile high-speed rail plan from San Diego to San Francisco. Bay area residents are now protesting that the line will damage property values, while Central Valley farmers complain the line will ruin their land. The greater wonder is how the state will pay for a $43 billion train even as it’s facing a $28 billion budget gap over the next 18 months and $20 billion annual deficits four years after that.

Two years ago California taxpayers approved a $9.95 billion bond initiative to fund the train, buying the pitch that it would create hundreds of thousands of jobs and attract 94 million riders. The state’s high-speed rail authority told voters a one-way ticket from San Francisco to Los Angeles would cost $55—about the price of a Southwest flight. They said private equity firms were dying to invest, and that the train would operate without a public subsidy.

Studies by economists and financial consultants Alain Enthoven, William Grindley and William Warren have since debunked the rail authority’s claims. Based on the costs of high-speed rail lines in Europe and Japan, the price tag likely will fall between $62 billion and $213 billion. A one-way ticket from San Francisco to Los Angeles will cost about $190, which means more people will choose to fly.

Because of uncertainty over costs and ridership forecasts, private equity firms say they won’t invest without a revenue guarantee, i.e., an operating subsidy. Even if the state somehow manages to attract $10 billion in private equity, its business plan calls for another $5 billion in local grants and $15 billion more in federal funds. The $15 billion that they want from the feds would be nearly a third of Mr. Biden’s $53 billion figure. Maybe high-speed rail is a back-door bailout for California.

Messrs. Obama and Biden argue that the U.S. has to invest in high-speed rail to stay competitive with the world. Only if we’re competing in the Debt Bowl. Two high-speed railways in the world have broken even, and those are in densely populated areas of France and Japan where people drive less because gas prices are twice as high as in the U.S., and many foreign intercity highways levy tolls.

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