Shadowbosses: Government Unions Control America and Rob Taxpayers Blind Read online

  Begin Reading

  Table of Contents

  Newsletters

  Copyright Page

  In accordance with the U.S. Copyright Act of 1976, the scanning, uploading, and electronic sharing of any part of this book without the permission of the publisher constitute unlawful piracy and theft of the author’s intellectual property. If you would like to use material from the book (other than for review purposes), prior written permission must be obtained by contacting the publisher at [email protected]. Thank you for your support of the author’s rights.

  To our beloved parents: my mother, Sylvia,

  and Elizabeth’s parents, Karen and Jim

  Introduction

  They sat around the table together in a carefully guarded ceremonial meeting room in the capital city. The government was represented by the political leader of the country, a tall and stately figurehead for the nation. Across the table sat those who had put him in power: his Shadowbosses.

  The leader and the Shadowbosses had come to a standoff. Their stated positions on an important public matter were at odds with one another. And so, the meeting was called to harmonize their positions.

  By the time the meeting was over, the parties were close to a deal; the details would be worked out in the coming days. But the deal would send the country in a new, more radical direction. And the people would never understand that they had been sold out by their leader and his Shadowbosses. Until now.

  THIS meeting did not take place in Soviet-era Moscow with the Communist Party dictating terms to an Eastern European political leader. Nor did it take place today in a former Soviet republic with the oligarchs telling the government leader what to do.

  This meeting actually took place on January 11, 2010. At the White House.

  The Smoke-Filled Room

  At that table sat President Barack Obama and the most important labor union bosses in America. Many of the powerful labor officials that we will meet in this book were at the meeting:

  • Dennis Van Roekel, boss of America’s largest labor union, the National Education Association (NEA);

  • Richard Trumka, former mine worker and fabled strongman of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO);

  • Andy Stern, the elegant, Ivy League–educated head of the Service Employees International Union (SEIU), now retired;

  • Gerald McEntee, the thirty-year head of the American Federation of State, County and Municipal Employees (AFSCME);

  • James P. Hoffa Jr., head of the International Brotherhood of Teamsters and son of the thug/legend Jimmy Hoffa; and

  • Randi Weingarten, firebrand president of the American Federation of Teachers (AFT).1

  What could be so important to bring together all these powerful labor bosses at the White House? The President needed their help to pass Obamacare, and the labor unions were threatening to tank his legislation. Why? Because Obama had proposed to tax union members’ extremely expensive health-care plans, the so-called Cadillac plans, to pay some of the cost of Obamacare.

  Before the meeting, Richard Trumka of the AFL-CIO spoke at the National Press Club, where he condemned Obama’s proposal to tax the Cadillac plans.2 The New York Times reported, “Mr. Trumka and other union leaders said before Monday’s meeting that they intended to tell Mr. Obama that the tax would be economically and politically unwise.”3 The head of the International Association of Fire Fighters was even more direct, “The President’s support for the excise tax is a huge disappointment and cannot be ignored. If President Obama continues to support it and signs a bill that includes the excise tax on workers, we will hold him accountable.”4

  After the White House meeting, the union bosses’ tone changed. Trumka emerged from the meeting sounding satisfied. “It was a frank and productive meeting between friends about moving forward with health-care reform,” Trumka announced to the press. “Meeting between friends” wasn’t precise enough—it was really a meeting between our country’s elected leader and the union officials who got him into office and who hold him accountable—his Shadowbosses.

  The White House meeting was closed to the press and even to White House staff. Obama, as a candidate, had promised that all health-care negotiations would be broadcast on C-SPAN in an open forum. Obama, as President, broke his promise of transparency to satisfy the unions’ demands out of the public eye and to get Obamacare enacted.

  Two days after the meeting with Obama, the union bosses met with Vice President Joe Biden and Secretary of Health and Human Services Kathleen Sebelius to hammer out details of the deal. When the meeting ended, the Obama Administration announced that it would give labor unions a seven-year moratorium on taxing Cadillac plans. It was a victory for the unions, but not for the taxpayers who are stuck paying an additional $120 billion for this concession to the unions—on top of the other costs of Obamacare.5 Even the New York Times emphasized in an editorial, “The agreement treats unionized workers far more favorably than nonunion workers, the price for the support of important Democratic constituencies.”6 But actually, the government unions got even more in the deal—Obama opened up enormous new opportunities for the unions which you will learn about later in this book.

  WHAT IS A SHADOWBOSS?

  In our own lives, our Shadowbosses are the people we really work for: the people who hold us accountable for the decisions we make in our lives. It’s our fathers, telling us to study harder so we will have the chance for a bright future. It’s our mothers, pressing us to stay out of trouble. It’s our football coaches, standing on the sidelines and sending in the plays. For some of us, God is our Shadowboss, giving us a plan for action we ought to take and consequences if we don’t.

  For many of our political leaders, though, their Shadowbosses are the government employee unions. These unions tell them what to do, which legislation to support, and when to bend to the demands of the unions in contract negotiations. The Shadowbosses are there to pat politicians on the back when they support the interests of government employee unions, and they’re there to tear them down if they go against those interests.

  This story is frustrating for most Americans. It shows us that we’ve lost control of our government, and our politicians ignore us in favor of influential union bosses. It suggests that our republic is in some kind of peril.

  But we’re not just in some kind of peril. We’re Kate Winslet and Leonardo DiCaprio travelling aboard the Titanic. President Obama is steering the ship. And the union bosses are the only ones with lifeboats.

  Our government is no longer answering to the American people; it has new masters. Behind taxpayers’ backs, our country is controlled by a group of movers and shakers who manipulate the system for their own advantage. These are the heads of the government employee unions: the Shadowbosses.

  A Different Type of Union

  This all may seem like antiunion paranoia. After all, when we think of unions, we may remember impoverished Norma Rae striking for livable working conditions, or Bud Fox at the end of the movie Wall Street fighting corporate titans to help Bluestar Airlines employees keep their jobs. We may think of coal miners fighting for safer working conditions so that they can avoid black lung and of ladies’ garment workers demanding improvements to their sweatshop working environments.

  Government employee unions, which the unions themselves usually call “public sector unions” or “public worker unions,” aren’t those kinds of unions. Government employee unions remind us more of Norma Rae’s bosses than Norma Rae; they make us think more about Gord
on Gekko than the employees of Bluestar Airlines. These unions act more like bosses of government employees than their representatives.

  Unlike private sector unions, government employee unions grow our government at the expense of the taxpayers. These unions are cynical exploiters of the taxpayer buck for their own advantage. When these unions win, all taxpayers lose—including members of private sector unions, who suffer higher taxes along with the rest of us when government grows.

  The labor movement is now focused on government employees for its future growth. In recent decades, government employees have swelled union ranks—and government employees now represent the majority of all union members in our nation. The teachers unions, the Service Employees International Union (SEIU), and the American Federation of State, County and Municipal Employees (AFSCME), just to name several government employee unions, represent millions of government workers. Even unions like the United Auto Workers and the Teamsters, which used to represent only private sector workers, represent tens of thousands of government employees. Government employees now actually have a rate of unionization that is five times greater than private sector workers, which is why government employee unions are so important to today’s union movement.

  But government employee unions are a completely different animal from the private sector unions with which we may be more familiar. And the ramifications for America of having a unionized government workforce is completely different and far worse for our nation than having unionized workers in American businesses. To see why, we need to look first at the role of labor unions in the private sector.

  Private Sector Unions

  Private sector unions represent workers who make and run things in our country—workers in businesses. For example, private sector union workers make cars, airplanes, clothing, equipment, and steel. They work in a wide range of fields including mining, transportation, construction, telecommunications, and the movie and television industries.

  In private companies with unionized workers, management and unions negotiate at arm’s length against each other over workers’ wages, working conditions, and benefits. The party on each side of the negotiating table is beholden to its own master. Management represents the owners or stockholders of the company, and the union represents the workers. But in a certain way, the managers, owners, union, and workers all share similar goals—making sure that the company stays in business.

  When a unionized business grows and thrives, there is more profit to share and more workers to hire, leading to more union members and more union dues. With American businesses facing intense competition, many union officials realize that if their demands are too great, businesses will lose out to competitors and have to shutter their doors. But in many cases, the unions demand too much, and as a result, unionized businesses are less competitive and go out of business. The percentage of private sector workers in labor unions has been declining since the 1950s, both because unionized businesses have been failing and because workers in new businesses don’t choose to unionize. Basically, private sector unions have been driving themselves out of business for sixty years.

  Government Employee Unions

  Government employee unions are a totally different animal. Government employee unions use politics as the central plank of their business plans—unlike private sector unions, which have far less need for politics to maintain their bottom line.

  Today, government employee unions, including many hybrid private sector–government employee unions like the United Steelworkers and the Teamsters, represent 37 percent of all government workers. These unions represent over 8.3 million government workers: federal government workers in Washington, state workers in our state capitals, and municipal workers in our cities. Unions represent almost every type of government worker including postal carriers, federal border control agents, Treasury Department workers, public school teachers, university professors and graduate student teaching assistants at public universities, secretaries in city hall, police, firefighters, prison guards, to name just a few types. Government is a growth area for unions, compared with the private sector. There are now twice as many government post office workers represented by labor unions as union members in the entire domestic auto industry.7

  Government employee unions use politics to elect their own bosses—the government officials, like mayors and governors, who will be the actual bosses of the union members. And unions get to fire bosses who don’t perform for them.

  Government employee unions use politics to elect their own bosses—the government officials, like mayors and governors, who will be the actual bosses of the union members. And unions get to fire bosses who don’t perform for them. How does that work? The unions use political spending to help pro-union politicians get elected to office. These politicians become government officials who make decisions about union contracts and legislators who pass laws important to unions. And, if these politicians don’t support the unions’ agenda, the unions throw them out and elect other politicians in their place. Government employee unions are great at getting their allies reelected and punishing at the polls any politicians who fight their power.

  In theory, when unions negotiate contracts for their members, unions sit on one side of the bargaining table, and government officials representing the taxpayers sit on the other side of the bargaining table. In reality, though, the government officials on the other side of the table may be beholden to the same unions against which they are negotiating. Unions effectively end up sitting on both sides of the negotiating table. The only party not represented at the table is you, the American taxpayer.

  “In the private sector, the capitalist knows that when he negotiates with the union, if he gives away the store, he loses his shirt,” writes Washington Post columnist Charles Krauthammer. In contrast, in the government sector, “the politicians who approve any deal have none of their own money at stake.” It’s the “perfect cozy setup” for politicians, he explains; the more a politician favors the union, the more the union will favor him for reelection.8 The system is perfect for union bosses, great for pro-union politicians, also, but terrible for taxpayers.

  But isn’t that essentially bribing government officials to take your view in negotiations—and isn’t it illegal? You would think so. But then you have to consider who makes the laws and who benefits from union political spending—the answer in both cases is government officials. Remember, when the fox is guarding the hen house, it’s not illegal to eat the hens. For example, insider trading on financial information is illegal on Wall Street, but until just this year, insider trading on political information by members of Congress was perfectly legal.9 If legal bribery benefits government officials, is it really any surprise that it is legal?

  Legal bribery is just part of the “unholy alliance between unions and the Democratic Party,” explains Fox News host Sean Hannity. “Unions give hundreds of millions [of] dollars, help elect Democrats, they get sweetheart deals that have to be paid for down the road.”10 Don’t these sweetheart deals that government officials give the unions cost a bundle? Sure, but here’s the beauty of being a government worker: you don’t have to care. Outrageous concessions to the unions don’t drive the government out of business and make you lose your job, like they do in the private sector. The government will always be in business. Unwieldy union contracts just make the government immensely bigger and more expensive—and more burdensome to the taxpayers.

  NOT YOUR FATHER’S UNION

  Union membership among workers in American business—the private sector—has declined dramatically from a high of 35 percent of private sector workers in the 1950s to its current low of less than 7 percent. Faced with this declining market for their services, the unions of yesteryear found a new market—government workers. United Auto Workers represents auto workers of course, but it also represents more than fifty thousand government workers including firefighters, zookeepers, and academic workers at public universities like the University of California. T
eamsters represents truckers, but the union also represents over two hundred thousand government workers including police officers, parole officers, public works employees, school bus drivers, and transit workers. United Steelworkers represents steel and aluminum workers, but it also represents government employees including university professors, health-care workers, and law enforcement workers. Government is the driver for the future growth for unions—and unions drive future growth of our government.

  Taxpayers versus Tax Receivers

  Government employee unions have figured out that in America today, there are just two groups of people: the “net taxpayers” and the “net tax receivers.” You’re probably in the first category. You, the taxpayer, are the kind of person who has a productive job. Maybe you are a member of a private sector union. But in any case, you make our nation’s “pie.”

  While you are working hard making pie, government employee unions are busy taking pie and redistributing it to themselves and government employees.11 They eat the pie that you make. And they’re not the only ones. More than 50 percent of the American population now receives more from the government than they pay in, and the percentage of these “net tax receivers” is growing every day. Net tax receivers naturally tend to favor the growth of government because they benefit from it; taxpayers tend to oppose it because it costs them when government grows. Our nation doesn’t have much of a problem when a small percentage of people in our nation are net tax receivers; the problem arises when the percentage of people who draw their support from government, including government employees, is so high that it imperils our nation’s economic growth. That is where we are heading.