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10.01.2008 0

Financial bailout, Denver labor deal set bad precedents for nation, state

  • On: 10/27/2008 12:41:20
  • In: Economy
  • ALG Editor’s Note: In the following column, Steve Schuck of the Denver Business Journal describes just how the monstrous immorality of Big Government irresponsibility has invaded Colorado:

    Financial bailout, Denver labor deal set bad precedents for nation, state

    By Steve Schuck Friday, October 24, 2008

    Why are so many people across the political spectrum offended by the federal government’s “Troubled Assets Relief Program?”

    Because it’s irresponsible, immoral and smacks of the worst kind of cynicism. It’s $700 billion — and growing every day — to recapitalize the same banks that were responsible for the financial meltdown in the first place and will be supervised by the same officials who presided over them.

    That money will come out of the pockets of taxpayers who weren’t connected to the FNMA/FMAC debacle. That money also will come out of the pockets of homeowners who continue to pay their mortgages.

    And that money will go into the pockets of bankers who made bad loans, as well as those of nonperforming borrowers.

    It’s wrong, just plain wrong, to reward irresponsibility while penalizing responsibility.
    It’s worse than wrong — it’s immoral.

    This is a Wall Street plan, designed by the same Wall Street types who created this fiasco, but who care precious little about Main Street. It will be approved and overseen by the politicians whose agenda was and is — you guessed it — political, not economic. These very politicians refused to rein in Fannie Mae and Freddie Mac, actually goading them into ever-riskier lending practices.

    They refused to privatize those government-spawned monstrosities. They put the U.S. Treasury at risk by failing to heed repeated warnings. They accepted large political contributions from Fannie Mae and Freddie Mac. And yes, they’re now picking both winners and losers. Are we somehow to believe that they just got religion and now will demand accountability?

    Ironically — even as politicians now want unprecedented expanded federal intervention and regulation — the crisis actually had its origins in the creation of Fannie Mae and Freddie Mac as New Deal government agencies. In 1977, the Community Reinvestment Act drove the government deep into the housing market. In 1999, Fannie Mae came under pressure from the Clinton administration to expand the availability of mortgage loans to low- and moderate-income borrowers.

    It didn’t take long for the politicians to seize the opportunity to use Fannie Mae’s money and implicit government guarantees to develop new and expanded constituencies, padding their campaign pockets in the process. Instead of unambiguously repudiating any government guarantees and deferring to the wisdom of the marketplace, our politicians chose to get in deeper and deeper. This debacle was inevitable.

    Now, the same kind of irresponsibility and cynicism has made its way to Denver. In an act devoid not only of principle but also of any common sense, some of Colorado’s top business leaders have agreed to give $3 million to organized labor in an attempt to defeat three reasonable, good-government, employee-empowering, choice-providing ballot issues: Amendments 47, 49 and 54.

    Amendment 47 provides workers the right to choose whether or not they want to be dues-paying union members; Amendment 49 prohibits governmental entities from collecting dues or fees from the paychecks of its employees; and Amendment 54 prevents those who have government contracts from making political contributions to the same governmental entities.

    Why would captains of industry oppose these sensible, moderate and economically sound proposals? Because they were blackmailed in a shakedown orchestrated by Big Labor. Organized labor placed four “poison pill” amendments on the ballot—radical, job killing proposals that likely could not have passed on their merits — and threatened to leave them there unless $3 million of ransom was paid to be used to oppose 47, 49, and 54.

    Of course, by giving in to these demands, they’ve set us all up for further blackmail in the future. Those who succumb to extortion by paying ransom are guaranteed, absolutely guaranteed, one thing — the opportunity to do it again, and again, and again. Moreover, instead of undermining those of us who believe in employee rights and choice, why didn’t they instead convince Gov. Bill Ritter to rescind his executive order of last year allowing collective bargaining for state employees — the action that precipitated all of this?

    The deal that went down at the behest of organized labor has a lot in common with the deal inked in Washington. Both have the best of intentions but produce the unintended consequence of penalizing those who act responsibly in the name of rescuing those who act irresponsibly.

    That isn’t the American way. Who can blame those citizens who play by the rules for being cynical?

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