Tuesday, August 17, 2010

Richard Epstein's Brilliant Three-Point Plan For Reforming Public Employment

in Forbes:

A shame no candidate for public office (save Ron Paul) ever talks like Mr Epstein in this essay -- and we badly need candidates to talk like Richard Epstein!

Some samples"
"No longer can we duck the two deeper questions behind these endless legislative and judicial struggles. First, what institutional arrangements give rise to these constant showdowns? Second, what can be done to fix them--not only for teachers, but also for prison guards, police and firefighters, and all other state and municipal workers....

"...Major states like California, Illinois and New York require state agencies and local governments to negotiate with unions. To avoid strikes, compliant public officials grant unions guaranteed wage and pension contracts that shift all the risk of the economic downturn onto public treasury. Bad times have led to a collapse in the stock market and a decline in tax revenues. So what if private citizens are taken to the cleaners? Who cares if discretionary public services are cut? The union ship continues to ride, untroubled, high on the roiling seas...."

"..The only serious solutions do two things and avoid a third. First, they launch a frontal assault on the protected status of public unions. Second, they cut pension benefits for present and future union retirees. Third, they forbid the use federal tax money to bail out failing states and municipalities...."

"...No public body should ever be required or allowed to confer monopoly power on an employee union--period. In education, for example, don't let powerful unions block charter schools, vouchers and home schooling. Any school, public or private, should operate with an explicit legislative guarantee that all teachers and other employers must agree not to join a union as a condition of employment. The "best interests of the student" cannot be allowed to become a fig leaf for protectionist union legislation. Alternative paths of education are the best way to reduce government expenditures and blunt union power."

Now here's where he gets really bold, see if you can believe any pol would agree:

"Second, cut back pension contracts for all retired and current workers now. Far from being sacred property rights, these sweetheart agreements between union leaders and sympathetic legislators represent the worst form of self-dealing. Some legislators sell out their constituents in exchange for modest campaign contributions; others yield to union threats of massive electoral retaliation if they do not go along with union demands.

"Regrettably, no taxpayer has ever been allowed to challenge these questionable deals in court before they took effect. That has to change. Any self-dealing between a corporate board and its key officers would not last a minute. These bloated union contracts should fare no better. They should be set aside as unfairly obtained. Exactly how they should be trimmed is hard to say....

" In the end, the ultimate objective is to reduce pensions for public employees to the levels received by their peers in private industry."

And, just to make sure you understand how *fundamental* this issue is:

"Last, this battle over union contracts and union pensions is part of a larger political struggle. One the one side are those who think that more regulation, more taxation and more spending are required to dig this nation out its current hole.... We need to move in the opposite direction: deregulate, lower taxes and slash budgets.

"The choice could not be more stark. The coming election will tell us what the American people are made of, for if the voters do not throw the rascals out now, they may not get a second chance."

Frankly, in my darker moods, I doubt if the electorate can or will rise to this challenge. A hundred years of being trained by politicians, special interests, and the lax press have trained our voters in all the wrong directions. We've seen this in California, we see it elsewhere, we'll continue to see it. I worry.

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