Crossing The Rubicon in Wisconsin

If A and B negotiate a contract where all of the benefits go to them but all of the cost of performing the contract are to be paid for by C, who has no say in the terms of the contract, everyone would recognize that as a perverse state of affairs. It is a fair description of what takes place when the teachers’ unions negotiate a labor contract with a school board, or any public employee union negotiates with any government sector for a union contract covering wages, salaries, and health and pension benefits. C, the taxpayer, is the forgotten man in the transaction. That’s what makes the whole thing so perverse. The one paying for it all has no one representing his interest. Until now.

Democrats are in full combat mode to keep the status quo, while Republican governors are storming the barricades. Charles Krauthammer says “Obama’s Democrats have become the party of no. Real cuts to the federal budget? No. Entitlement reform? No. Tax reform? No. Breaking the corrupt and fiscally unsustainable symbiosis between public-sector unions and state governments? Hell no.”

Some may reply that the taxpayers are not entirely forgotten in the negotiation of public employee union contracts because the politicians that negotiate with the unions want to get re-elected. Sure they do, but the contract they negotiate today doesn’t hit the taxpayers all at once. The most costly parts of it aren’t felt for many years, long after the politicians who negotiated it are gone from office. This is especially true with pension benefits where extravagantly improvident promises were made to pay unsustainable benefits far into the future. If a business in the private sector gives away the store in a union contract the owners have reason to know they will lose their shirts. Although, even in the private sector union contracts often cast shareholders in the role of the forgotten man when the directors of the company figure that the claim on profits they agree to today won’t have to be paid until far into the future.

Krauthammer’s column is worth a look.

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