Union Boss Richard Trumka And His Fallacies

Richard Trumka has been given a wide berth all over the media to make his pro-union case.  Let’s analyse his points and see how out of touch he is.  You can twist and bend facts as much as you want, but sooner or later they have a way of slapping you in the face.

Trumka asserts that workers have been given a choice.  Give up their rights or get laid off.  His first mistake is to assume collective bargaining is a “right”.  It’s not a right.  It’s a privilege.  Nowhere in Thomas Jefferson’s eloquent elucidation of the “inalienable rights” to man, was there a carve out for collective bargaining.  Collective bargaining is a point that was won, and now is being lost at a bargaining table. 

Sympathetic Democratic majorities, their pockets lined with union cash, granted that collective bargaining privilege.  Now, the majorities are Republican, and they are taking that away. Remember, they did have an election in Wisconsin and it was no secret what the Republicans wanted to do.  The majority of their constituents want it, otherwise they wouldn’t have won the election. 

There is a side point here too.  Unionized collective bargaining for public employees is a gigantic conflict of interest.  It’s not at all like a union negotiating with a private firm-which can be advantageous for the firm.

His second straw man is the assumption that unions built the middle class.  That’s totally false.  The middle class was built by entrepreneurs.  They developed great businesses and hired workers for them.  The entire capitalist system in America was built by individuals figuring out a better way and taking a risk to build a successful company.  Today, there are times where unions impede innovation and development, depriving companies of growth. They also add to the cost of doing business, making the economy less efficient.

Trumka goes on to cite the Universal Declaration of Human Rights.  Of course, that’s not a United States concept, we already codified that in our Constitution back in 1778.  This comes from that beacon of liberty and hope, the United Nations.   You know, the UN, where Libya sits on the Human Rights Council.  If public policy were based on UN proclamations, we’d all wind up as “the little people” ground up by big government machines. 

Trumka then characterises the Republican governors as radical evil emperors, seeking to destroy people.  In fact, these guys aren’t radical at all.  They are just asking that employees contribute a little more toward their benefit packages.  Trumka also cites a poll that has been proven to be biased in the way it asks questions about collective bargaining and workers.  Radical would be what Indiana Republican govern nor Mitch Daniels accomplished in Indiana years ago by changing the government pension from defined benefit to defined contribution.  That’s what saved Indiana from the trials and tribulations being realised in other states.

He goes on to say that government budgets are in trouble because of the recession.  It’s easy to concede that point. He is correct that because of higher unemployment there is less tax revenue to pay for things.  However, the core reason government budgets are in trouble is because of the medical and pension liabilities they are liable for in the future.  Additionally, many of these governments used a fallacious net present value discounting factor to put these liabilities on their balance sheets, understating the amount by billions of dollars.  The federal government has also understated it’s liabilities by trillions by keeping Social Security and Medicare off its balance sheet.  It’s not the recession stupid, it’s the true cost of the future liabilities that is breaking the bank.  Even if we taxed all income at 100%, we wouldn’t be able to pay for all the future liabilities and debt on government books.

If governments were publicly traded corporations, they’d be in jail.

Trumka falsely accuses Wall Street of bankrupting the American worker.  Wall Street certainly has it’s faults.  However, the root of the entire financial disaster we saw in 2008 was within the federal government.  Fannie Mae and Freddie Mac laid the groundwork for disaster.  The Federal Reserve provided the kindling.  Everyone else up the food chain responded to economic incentives created by the government.  With or without the financial melt down, we’d still be looking at trying to rectify awful government balance sheets.  The point is not relevant to the larger conversation.

Trumka advocates for tough rules and doesn’t specify what they would be.  I assume a higher wage, trade barriers, more restrictions and regulation, and mandatory division of cash flows.  For a peek at how that works out, just look at the economic development in the US over the past two years.

Without entitlement reform, our country, every state, every city, and in the end, every citizen is sunk.  There is no free lunch.  Sooner or later there is a bill for all this largesse.  There are so many things both political parties did wrong over the past 80 years they are too numerous to mention.  But, we have a very short window to fix those mistakes without damaging us beyond repair.  That’s what the many governors are finally trying to do.

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