Despite a reputation for loving Big Government solutions, the Obama administration has found one area it’s willing to cut red tape: For its union sponsors. It’s a different story for business, though, which is feeling the pain from an expansionist government flexing its muscle.
Consider this week’s news that the Obama administration has rolled back rules that required union officials to disclose potential financial conflicts of interest — including kickbacks and gifts from employers — that might influence their representation of employees.
The ostensible reason for removing this important disclosure is that the requirements by government were too “onerous” on union officials. The same rationalization is no doubt being prepared for the most thorough union financial disclosure requirement, which is currently under review by Obama’s Secretary of Labor, Hilda Solis.
Cheers to cutting back on government red tape, but not to the double standard. One can easily see an emerging picture of an expanding government that lets union bosses run free while hamstringing, if not strangling, business.
Consider the hottest labor policy debate over the Employee Free Choice Act aka Card Check. The White House and other advocates appear eager to effectively kill the secret ballot voting process for workers deciding to join a union.
This legislation would have the real-world effect of removing the federal National Labor Relations Board from the union organizing process — a loss of oversight with far-reaching consequences for working Americans.
At the same time, though, the bill inserts government into a massive (and unwarranted) role of mandating arbitrators to make sure unions and firms reach a deal. There is no national precedent for the state imposing its will on working conditions so broadly.
Still, union bosses and their political allies are happy to enlist the impressive management skills of the same government that oversees the war on drugs, the war in Iraq, and trillions in long-term financial liabilities.
While the fight over Card Check is currently just theoretical, the crucial struggle over the future of government’s role in using, abusing, running, and ruining business is unfolding at your local Bank of America branch.
The Service Employees International Union (SEIU), which has had its eyes on unionizing the bank’s large number of security guards, has put its spin machine into overdrive. They arranged nationwide “actions” against the bank’s CEO, Ken Lewis, erected a website calling for his head, dashed off sloppy propaganda videos, and more. Heading to the anti-bank event, SEIU leader Andy Stern tweeted that he was heading to the Bank of America rally “to protest 45 billion in tax dollars [in bailout].”
How ironic. Just this week, The Wall Street Journal reported allegations by Lewis that the Secretary of Treasury essentially forced — under pain of outrageously firing the CEO and the company’s board of directors — the bank to take on the toxic troubles of Merrill Lynch and to accept large amounts of federal money. In short, with Beltway bureaucrats are calling the shots for Bank of America, even as its reputation (and that of its reportedly coerced CEO) is under attack.
Worse, the bank and its shareholders appear to have been bullied and bruised by the very government officials claiming to save the nation’s banking system. And even though the Secretary in question served in the cabinet o President George W. Bush, little has changed under the Obama administration.
If anything, the situation is worse now that politicians have weakened the company and SEIU — a top Obama supporter — is trying to take down the CEO in a cynical effort to sign up new dues-paying union members. Will the President stand up to one of his top backers? It’s a referendum on his basic fairness, so it is worth tracking.
This Bank of America saga is not an isolated incident. Legislators’ ransom for bailing out the Big Three domestic auto companies, which was essentially a bailout for organized labor’s absurdly expensive wages and benefits, came in the form of requirements for energy-efficient cars for which the public has shown little appetite.
One needn’t look far for the negative effects of political interference in business decisions. The Community Reinvestment Act (along with historically low interest rates set by the government) distorted bank lending practices that directly led to the recently burst bubble. Before that it was the Corporate Average Fuel Economy (CAFÉ) standards for automakers.
Washington can keep trying to run U.S. companies, but they’ll likely just continue to run them into the ground.
Financially unsound decisions being driven by politics is inherent to, not a byproduct of, government bleeding over into the proper role of markets.
Recent Gallup polling shows the public has a limited tolerance for the expansion of government. They want it over quickly. This week we have seen just some of the reasons why. When government picks winners and losers, they almost always just pick losers.
Bret Jacobson is founder and president of Maverick Strategies LLC, a research and communications firm serving business and free-market think tanks.
