Organizing for America

Last year when then the President’s campaign was touting his sacrifice to become a community organizer instead of taking some high income position, we should have been paying more attention. The roots of union labor and community organization run deep and are very closely tied. Even after the election President Obama has continued to have his organization send out email updates to supporters under the tag line “Organizing for America”. Maybe a more appropriate line would be “Unionizing America”. The Union President seems to have drawn his line of allegiance very clearly.

The first shot was the DC voucher program which I mentioned yesterday. The obvious point of this is that the teachers’ unions are very much against school choice or voucher programs, charter schools, and home schools. These alternate sources for education cut down on head count and in some cases cut down on funding available to the public school system. For instance, in the DC voucher case each voucher recipient was given $7500 a year to use at the school of their choice. Likewise in many states charter schools receive their state funding based on their headcount. In all cases that I have read about or studied, the funding sent to the charter or voucher program is significantly less than the normal state funded institution spends on a per child basis. It actually saves the tax payers money. But it is money that doesn’t go to the state educational system, where the teachers’ unions have real influence. Yesterday I mentioned the 160 “teachers” in LA that are paid not to teach. This is just one example of the negative affect that these unions have; schools find it nearly impossible and EXTREMELY costly to fire a bad teacher.

Let me give you another example of the teachers’ unions at work. This story also comes out of CA, but it does take too many Google searches to see that this problem is wide spread. This particular example is just out right heinous. An eighth grade student was responding to questions from his teacher about his recent absence and he finally admitted that he had been in the hospital because he tried to commit suicide by slitting his wrists. The teacher took a look at the cuts and said that they “were weak” and that he should “carve deeper next time.” The principle requested that he be terminated. The school board voted to fire him. A review commission said… no. He still has his job. They said he was “misunderstood”. According to a former principle, “You’re not going to fire someone who’s not doing their job. And if you have someone who’s done something really egregious, there’s only a 50-50 chance that you can fire them.” Obviously they have the best interests of the kids in mind.

Unfortunately our Secretary of Education and President are on the side of the unions.

Take a look at the recent Chrysler bankruptcy situation. Normally when you are investing in a company, there are different levels of investment involving varying amounts of risk. Unsecured investments are the riskiest because there is nothing standing behind the loan. That’s like if you went to the bank and got a signature loan or any other type of loan where you don’t have to put up collateral. Then there are secured investments. This means that there is an agreement that no matter what happens to a company, that money will get returned or certain property or capital will be forfeited. In normal bankruptcy proceedings those who hold secured debt get paid as much as possible. Those with unsecured debt get whatever is left over. That is the nature of the investment. In the recent Chrysler bankruptcy that was not the case. The union got 50 cents on the dollar for their UNSECURED investment, while those holding SECURED loans received 33 cents on the dollar. Obviously some resisted this flip in bankruptcy practices which truly violates the established contracts. One of the lawyers who had represented the secured bond holders reported that his clients had been threatened to accept the proposed deal or risk the wrath of the White House and their minions in the press. The bond holders were then derided by the President himself at a press conference who denounced them as “speculators”. Since then these investors have been receiving death threats for causing the down fall of Chrysler. All for investing in a company that needed help and was offering secured notes. What do you think that will do for other companies seeking outside investors, especially if they already have debt held by large influential unions? What a great strategy to “get credit flowing again”!

Of course that’s not the only deal that the UAW has made out on since President Obama came to power (in a very real sense). With the government at the helm of GM, after dismissing the CEO, they recently cut a deal with the UAW, exchanging debt for 39% of GM, more of GM than the Ford family owns of Ford Motor Company. In a similar deal the UAW received 55% of Chrysler before the bankruptcy. They get to appoint board members and have influence over who is chosen as CEO; any guesses on how the labor negotiations at GM will go now?

But wait, there’s more!

President Obama just proposed $17 BILLION in budget cuts, most of which will be ignored by congress. One that I am sure they will probably NOT miss is a cut in funding at the Department of Labor. Not to the department as a whole, but in a certain division, the division that investigates union corruption. The Labor Department's Office of Labor-Management Standards investigates allegations of corruption against union officials. Let me ask a rhetorical question here, but why would the President propose cuts to the government body that regulates unions? Hasn’t he called for more government oversight in almost EVERY area? The administration stated an insufficient workload. Obviously there just isn’t anything for them to be investigating, despite the 929 convictions of corrupt union officials that they have won and the $93 million dollars they have been able to return to union members. Maybe President Obama will be investigating any corruption charges himself, since he obviously spends a lot of time with them.

Card check legislation will be coming up soon. It is one of the major goals for the administration and the Democrat party as a whole. It will enable union leaders to coerce new businesses and groups into unions, which of course should have a hugely beneficial effect on the union coffers, which will naturally want to reward the administration that has been so favorable to their cause.

Welcome to the Obama Administration, “Organizing for America”.


****Update: Another union gets in on the action this morning. The president threatens to hold back stimulus dollars if CA doesn't rescind some union wage reductions. Great message! Don't do ANYTHING to cut spending!