The Political Economy of Government Employee Unions

Excellent article that cuts through the out-of-the-mainstream-media’s lies about public sector unionism.  

The Political Economy of Government Employee Unions
by Thomas J. DiLorenzo
The main reason why so many state and local governments are bankrupt, or on the verge of bankruptcy, is the combination of government-run monopolies and government-employee unions. Government-employee unions have vastly more power than do private-sector unions because the entities they work for are typically monopolies.
When the employees of a grocery store, for example, go on strike and shut down the store, consumers can simply shop elsewhere, and the grocery-store management is perfectly free to hire replacement workers. 

In contrast, when a city teachers’ or garbage-truck drivers’ union goes on strike, there is no school and no garbage collection as long as the strike goes on. In addition, teachers’ tenure (typically after two or three years in government schools) and civil-service regulations make it extremely costly if not virtually impossible to hire replacement workers.
Thus, when government bureaucrats go on strike they have the ability to completely shut down the entire “industry” they “work” in indefinitely. 

The taxpayers will complain bitterly about the absence of schools and garbage collection, forcing the mayor, governor, or city councillors to quickly cave in to the union’s demands to avoid risking the loss of their own jobs due to voter dissatisfaction.  

This process is the primary reason why, in general, the expenses of state and local governments have skyrocketed year in and year out, while the “production” of government employees declines.
For decades, researchers have noted that the more money that is spent per pupil in the government schools, the worse is the performance of the students.

Similar outcomes are prevalent in all other areas of government “service.” 

As Milton Friedman once wrote, government bureaucracies — especially unionized ones — are like economic black holes where increased “inputs” lead to declining “outputs.” 

The more that is spent on government schools, the less educated are the students. The more that is spent on welfare, the more poverty there is, and so on. This of course is the exact opposite of normal economic life in the private sector, where increased inputs lead to more products and services, not fewer.

Thirty years ago, the economist Sharon Smith was publishing research showing that government employees were paid as much as 40 percent more than comparable private-sector employees. If anything, that wage premium has likely increased.

The enormous power of government-employee unions effectively transfers the power to tax from voters to the unions. 

Because government-employee unions can so easily force elected officials to raise taxes to meet their “demands,” it is they, not the voters, who control the rate of taxation within a political jurisdiction. They are the beneficiaries of a particular form of taxation without representation (not that taxation with representation is much better). This is why some states have laws prohibiting strikes by government-employee unions. (The unions often strike anyway.)
Politicians are caught in a political bind by government-employee unions: if they cave in to their wage demands and raise taxes to finance them, then they increase the chances of being kicked out of office themselves in the next election. The “solution” to this dilemma has been to offer government-employee unions moderate wage increases but spectacular pension promises. This allows politicians to pander to the unions but defer the costs to the future, long after the panderers are retired from politics.

As taxpayers in California, Wisconsin, Indiana, and many other states are realizing, the future has arrived. The Wall Street Journal reports that state and local governments in the United States currently have $3.5 trillion in unfunded pension liabilities. They must either raise taxes dramatically to fund these liabilities, as some have already done, or drastically cut back or eliminate government-employee pensions.

Government-employee unions are primarily interested in maximizing the profits of the union. Consequently, they use civil-service regulations as a tool to protect the job of every last government bureaucrat, no matter how incompetent or irresponsible he or she is. Fewer employed bureaucrats means fewer union dues are being paid. Thus, it is almost guaranteed that government-employee unions will challenge in court the attempted dismissal of all bureaucrats save the occasional ones who are accused of actual criminal behavior. This means that firing an incompetent government school teacher, for example, can take months, or years, of legal wrangling.

Politicians discovered long ago that the most convenient response to this dilemma is to actually reward the incompetent bureaucrat with an administrative job that he or she will gladly accept, along with its higher pay and perks. That solves the problem of parents who complain that their children’s math teacher cannot do math, while eliminating the possibility of a lawsuit by the union. This is why government-school administrative offices are bloated bureaucratic monstrosities filled with teachers who can’t teach and are given the responsibilities of “administering” the entire school system instead. No private-sector school could survive with such a perverse policy.

Government-employee unions are also champions of “featherbedding” — the union practice of forcing employers to hire more than the number of people necessary to do the job. If this occurs in the private sector, the higher wage costs will make the firm less competitive and less profitable. It may even go bankrupt, as the heavily unionized American steel, automobile, and textile industries learned decades ago.

No such thing happens in government, where there are no profit-and-loss statements, in an accounting sense, and most agencies are monopolies anyway. Featherbedding in the government sector is viewed as a benefit to both politicians and unions — but certainly not to taxpayers. The unions collect more union dues with more government employees, while the politicians get to hand out more patronage jobs. 

 Each patronage job is usually worth two or more votes, since the government employee can always be counted on to get at least one family member or close friend to vote for the politician who gave him the job. This is why, in the vast literature showing the superior efficiency of private versus government enterprises, government almost always has higher labor costs for the same functions.

Every government-employee union is a political machine that lobbies relentlessly for higher taxes, increased government spending, more featherbedding, and more pension promises – while demonizing hesitant taxpayers as uncaring enemies of children, the elderly, and the poor (who are purportedly “served” by the government bureaucrats the unions represent).

It is the old socialist trick that Frédéric Bastiat wrote about in his famous essay, The Law: The unions view advocates of school privatization, not as legitimate critics of a failed system, but as haters of children. And the unions treat critics of the welfare state, not as persons concerned with the destruction of the work ethic and of the family that has been caused by the welfare state, but as enemies of the poor.

This charade is over. American taxpayers finally seem to be aware that they are the servants, not the masters, of government at all levels. 

Government-employee unions have played a key role in causing bankruptcy in most American states, and their pleas for more bailouts financed by endless tax increases are finally ringing hollow.
Thomas DiLorenzo is professor of economics at Loyola University Maryland and a member of the senior faculty of the Mises Institute. He will be teaching Competition, Monopoly, and Antitrust: The Austrian Perspective at the Mises Academy this spring. He is the author of The Real Lincoln; Lincoln Unmasked; How Capitalism Saved America; and Hamilton’s Curse: How Jefferson’s Archenemy Betrayed the American Revolution — And What It Means for Americans Today. Send him mail. See Thomas J. DiLorenzo’s article archives.
February 24, 2011

Whose God?

During the Civil War Abraham Lincoln was asked whether he thought God was on the side of the North.  After a few moments of thought the grim-faced Lincoln replied, “The real question is not whether God is on our side, but whether we are on God’s side.”

Christians today must face the same question.  Are we calling on God to be on our side – whatever that may be – or are we joining God’s side?  Put another way, have we constructed gods of our own making to serve our needs or are we serving the God of the Bible?  God asks, “To whom then will you compare me, or who is my equal” (Isaiah 40:25).

Author Don McCollough suggests that many churches today have created either a “god-of-my-cause, a god-of-my-understanding, or a god-of-my-experience” that fills the void left by an abandonment of God and of true Christianity.

The “god-of-my-cause” manifests itself when churches begin with what they believe to be a good and worthy cause (liberation and feminist theologies come to mind immediately) and ends up using God to justify their participation.  This re-casting of God into the mold of the cause is tantamount to fashioning a new calf of social righteousness.

The “god-of-my-understanding” is a vile and demonic representation of Christianity through denominationalism.  Denominationalism is at its roots responsible for much of the strife and hostility seen in the church today.  Doctrinal lines are drawn in the sand, enemies named and challenged, and theological self-assuredness abounds.  Yet as McCollough points out, Christians forget that God is not contained in any theological system.  Indeed, theological endeavors demand humility as much as critical thinking.

Finally, the “god-of-my-experience” has intercepted the movement of the Holy Spirit in many congregations.  Churches are locked into my form of worship, my style of prayer, my focus in service.  This mentality squeezes the life out of the body.  The subjective rules over the objective and style wins over substance.  The result is that Christians become “ingrown” and narrow-minded.

What can be done to overcome such tendencies?  First, we must understand that a god we wish to fashion to fit our cause is ultimately no bigger than ourselves.  Secondly, we must accept that this god cannot save us from our sins.  Third, we must understand that any god that does not free us from the prison of our individual perspectives is nothing but a construct of our minds.

So whose god are you following?  My prayer is that you are following the one and only true God who has revealed Himself to us through the Bible.

Run well today brothers and sisters.

Becoming a Man of God: Lessons from the Life of David


The Bible presents a picture of David that is both inspiring and perplexing.  We know David as a magnificent warrior, a man of humility and integrity.  We also know David as an adulterer and in the least an accomplice to murder.

In 2 Samuel 3 we read that David had multiple wives.  2 Samuel 11 contains the story of Bathsheba and Uriah her husband.  In 2 Samuel 13 & 18 we see that David was a negligent father and this in turn caused much strife, heartache and even bloodshed.

Yet in speaking to Saul about David the Bible declares in 1 Samuel 13:14:

“But now your kingdom shall not endure. The LORD has sought out for Himself a man after His own heart, and the LORD has appointed him as ruler over His people, because you have not kept what the LORD commanded you.”

And in Acts 13:22 we read:

“After He had removed him, He raised up David to be their king, concerning whom He also testified and said, ‘I HAVE FOUND DAVID the son of Jesse, A MAN AFTER MY HEART, who will do all My will.’

What a statement from God!  But the question remains: How could God declare David “a man after His own heart?”  One of the keys to understanding this declaration is to understand that God is not looking for perfection.  That is only found in the Lord Jesus Christ.

Instead God is looking for men and women upon whom He can bestow His mercy and grace.  God looks for people whose hearts are pliable and seeking to serve Him.  God desires to pour out upon us His loving-kindness.

In 2 Samuel 9 we see this picture clearly.

This is a time in David’s life when God is very much blessing him.  Militarily, he has expanded Israel’s borders.  Chapter 8 tells us that he waged war with and conquered the Philistines, the Moabites, and the Arameans (Syrians).  He established military outposts in those and other nations to secure his borders and bring peace.

Although God has already told him he will not build the Temple, he is nevertheless collecting precious metal, jewels, and building materials for his son Solomon who would build it.

If we were to describe this time in the life of David and in the nation of Israel we would say that “life was good” or David was “living large.”

As David sat on his throne his mind began to recount God’s goodness toward him.  No doubt his thoughts drifted to Jonathan his best friend.  I believe even the words of their covenant came back to him.  1 Samuel 20:12-16 gives us the details.

Then Jonathan said to David, “The LORD, the God of Israel, be witness! When I have sounded out my father about this time tomorrow, or the third day, behold, if there is good feeling toward David, shall I not then send to you and make it known to you?

“If it please my father to do you harm, may the LORD do so to Jonathan and more also, if I do not make it known to you and send you away, that you may go in safety and may the LORD be with you as He has been with my father.

“If I am still alive, will you not show me the loving-kindness of the LORD that I may not die?

“You shall not cut off your loving-kindness from my house forever, not even when the LORD cuts off every one of the enemies of David from the face of the earth.”

So Jonathan made a covenant with the house of David, saying, “May the LORD require it at the hands of David’s enemies.”

V1 Notice that David makes his inquiry because his heart has been stirred by remembering the loving kindness he and Jonathan made a vow to uphold.

V2 Someone knew of a servant from the house of Saul whose name was Ziba.  They called Ziba to come before the king and answer some questions.

V3 This son of Jonathan became crippled in his feet when his father and his grandfather King Saul were killed in a battle against the Philistines described in 2 Samuel 4.  It was customary and expected that when a new king ascended the throne the former king’s family would be executed.  When the house of Saul heard of his death, the nurse maid for Jonathan’s son scooped him in haste and attempted to escape.  Unfortunately the child she held in her arms was dropped and he became crippled in both feet from the age of 5.

V4 David was overjoyed at this news and wanted to know where this son of Jonathan was.  I find this interesting that this descendant had been so well hidden as to be forgotten.  Remember that one of David’s wives was Michal, the daughter of Saul and thus the sister of Jonathan.  Even she did not know of this nephew.

V5 So David sent for this son of Jonathan to be brought to him.  Can you imagine what must have been going through this young man’s life when David’s servants came for him?  “The gigs up.  I made it a few years but it’s over now.”  No doubt this child’s servants told him that his life must remain secret or else David would kill him.  After all his grandfather chased David all over the desert trying to kill him so he could expect nothing less from David.

V6 We finally hear the name of Jonathan’s son.  Mephibosheth – “shameful one.”  His name was Merib-baal at birth but perhaps was changed to Mephibosheth after he was crippled.  Notice that Mephibosheth thought his life was over and so he fell on his face before David as if resigned to his fate.

V7Fear Not.” I imagine that took several long, tense moments to sink in.  Mephibosheth was there on his face before the king expecting at any moment to have his head cut off and instead he hears these beautiful words that brought indescribable joy.

V8 So Mephibosheth did the most reasonable thing – he spoke of himself as an unworthy recipient of this kindness.  I think he wanted to clarify what David had said and so he referred to himself as a “dead dog.”  This was a Jewish idiom of the time that represented the most worthless thing one could imagine.

V9 To make it official David calls in Ziba, the servant in Mephibosheth’s house to tell him that from that day forward Saul’s possessions including his ancestral lands would be Mephibosheth’s.

V10 Notice that along with Mephibosheth’s ancestral wealth being restored he would also eat at the king’s table.  Eating at the king’s table was an honor and represented the highest favor a king could bestow.  David was in effect saying “you’ll never have need of anything else again.  You are now under my protection and blessing.”

V11-13 David looked at Mephibosheth as one of his sons. What a great story of kindness fulfilled.  It demonstrates the heart of a man of honor and integrity.

But there is so much more here that God wants us to see.  Let’s look again at this same text again from God’s perspective if we can presume to know it.

The Bible tells us that God sent His Son into the world to save the world.  It is God’s desire to save the people of the house of Adam, to show kindness to them for Christ’s sake because of the covenant in Jesus’ blood.

In this story of David and Mephibosheth we see a picture of God the Father reaching out to us with salvation in His hands.  Can’t you hear God asking “Isn’t there one more of the line of Adam that I can show my mercy and grace to?”

Here is the first mark of the man of God – he has been born again, transformed by the Spirit of God to enter into that covenant relationship established by Jesus Christ.

In verse three Ziba the servant identifies Mephibosheth not by his name but by his condition – “There is a son of Jonathan who is crippled in both feet.”

Brothers, we should see in Mephibosheth ourselves first and then all of lost humanity.  Just as Mephibosheth could not walk because of a fall, so too we are unable to seek after God because we are fallen creatures.  We were all lame at one time.

It is interesting that Mephibosheth’s name means shameful one.  What did he do to deserve that?  He was rendered lame by the actions of someone elseWhat a picture of the fall of Adam and the stain of sin upon all mankind.

King David, picturing God in this passage asks “where is he?”  Doesn’t that remind you of the Garden of Eden?  God asked Adam and Eve where they were not because he did not know where they were but because he wanted them to understand the fall they had suffered because of their sin.

They thought they were hiding.  They tried to cover themselves with fig leaves.  But they could not hide the desolation of soul that exploded into their conscience.  Sooner than later sin betrays us and we are found for who we are.

Notice in verse 4 Ziba answers the King’s question of where Mephibosheth is by telling him that he is in Lo-debar.  Lo-debar means place of desolation, barrenness, and unfruitfulness.  That is the condition of all men apart from a saving faith in Jesus Christ.  Mephibosheth had been taken there to hide from the King.

That’s where I was when God called me.  I was in the desert hiding from Him.  Funny thing about the desert though – I didn’t see it as an utterly barren place.  It was only after His Holy Spirit began to work upon my soul to bring that sweet conviction to fruition that I saw the green pastures God was asking me to come lay down in.

Praise God that he did not leave us there in the desert.  Verse 5 says the King sent for Mephibosheth.  God calls out to men and women everywhere to come to Him.  He sends His Holy Spirit to bear witness and bring conviction.  He sends His servants, missionaries, pastors, Sunday School teachers, men and women of every walk of life to bear witness to His goodness.

The Bible says that Jesus came to seek and to save that which was lost.  In this church age He likes to use His children.

So Mephibosheth, representative of you and I, is summoned to the King.  Do you recall when you were summoned to the King?  There is a conviction in our souls.  We might not understand it completely but we know that God is real and He is calling out to us.  What do we do?  The only thing we can do, we fall face to the ground in trembling fear not knowing what to expect.

Isn’t that a good picture of how most people see God?  Mephibosheth was thinking the worse.  He thought the King was about to whack him.  When God calls us He is seeking to bless us not whack us.

Verse 7 – “Fear not.”  God doesn’t call out to us to come to Him with fear.  God wants to show us kindness because of what Jesus has already done for us.  David says that his blessing to Mephibosheth will include restoring to him all that his grandfather Saul had.

In the same way God restores to us all that Adam had before his fall.  What would that be?

1) Intimate fellowship/communion with Him.  God desires that close personal relationship with His children.

2) The King invites you to dine at His table as one of His sons.  The King’s table is the place of abundance brothers.  The King’s table is a place of warmth, blessing, and joy.  The King’s table is a place of fellowship.

3) The King did all this for Mephibosheth not because he deserved it but solely for Jonathan’s sake, because of the covenant he had made with Jonathan.  We benefit by what Jesus has done for us.

This is a 2nd mark of the man of God – fear is replaced by an understanding of the overwhelming grace God has to bestow upon us in Christ Jesus.

David wrote long before this, “He prepares a table before me in the presence of my enemies.”  Do you see the picture?  Rest and comfort in the blessings of God replace fear even in the most dire circumstances.

This is an overwhelming picture to be sure.  Mephibosheth was flabbergasted.  He put his face to the ground a 2nd time and declared that he was not worthy of such grand treatment.  Isn’t that a picture of the ones God calls to Himself?

Jesus said in Matthew 5 “blessed are the poor in spirit for theirs is the kingdom of heaven.”  God’s invitation to us will not produce a sense of pride but will always stir within us a sense of unworthiness.  That’s the humility required of the man of God.

I’m reminded here of Jacob’s testimony before the Lord “I am unworthy of all the loving-kindness and of all the faithfulness which You have shown to Your servant” (Gen 32:10).

Notice verse 13 – Mephibosheth ate at the King’s table regularly.  I love that.  We may not understand why God would bless us but we can accept it and enjoy it forever! We’re not to camp out on our unworthiness.  That can create a false piety.  Instead we are to receive the Lord’s goodness toward us with joy.

What a wonderful picture for the man of God.  Let me pull all this together and give you some points to chew on.

First, God desires to spend time with you.  He has poured out His grace and mercy upon you in salvation but that’s not the end.  Consider how many times David sat alone with Mephibosheth telling him about his father, how Jonathon loved Mephibosheth, about his friendship with his father, about their covenant of trust.

God wants to sit with us and tell us “Behold, what manner of love the Father hath bestowed upon us, that we should be called the sons of God” (1 John 3:1).

The songwriter has well said:

How deep the Father’s love for us,
How vast beyond all measure
That He should give His only Son
To make a wretch His treasure

How great the pain of searing loss,
The Father turns His face away
As wounds which mar the chosen One,
Bring many sons to glory

Behold the Man upon a cross,
My sin upon His shoulders
Ashamed I hear my mocking voice,
Call out among the scoffers

It was my sin that held Him there
Until it was accomplished
His dying breath has brought me life
I know that it is finished

I will not boast in anything
No gifts, no power, no wisdom
But I will boast in Jesus Christ
His death and resurrection
Why should I gain from His reward?
I cannot give an answer
But this I know with all my heart
His wounds have paid my ransom

Second, notice that David says no less than four times in this passage that Mephibosheth will “eat at my table continually.”  What a wonderful picture of God’s abundant grace for all we need.

Alan Redpath in his book “The Making of a Man of God” said:

“In Christ we are more than conquerors! In Him there is a constant supply of life to the helpless and penitent sinner who has come to the foot of the cross.  At Calvary he discovers real satisfaction.  Instead of barrenness in his life, there is fruitfulness; instead of being far off, he is made near to God by the blood of Jesus.  From that moment on, he is the object of God’s outpouring of blessing.  All the resources of heaven are made available to meet his need and to take him safely through the journey of life until one day he will be presented faultless at the throne of God.”

Third, David’s grace to Mephibosheth is a pattern for us in serving and ministering to others.  In a sense David represents the man God wants us to become.

For example we can see from this passage that perhaps God is saying:

  • We should look for the poor, weak, lame, and hidden to bless them.
  • We should bless others even when they don’t deserve it, and bless them more than they deserve.
  • We should bless others for the sake of someone else.
  • We should show the kindness of God to others.