Unfunded public pensions may bankrupt us before SS, MC, Obamacare get the chance to

I’ve written before that seemingly inconsequential legislative acts can have dramatic consequences.  (In that case, JFK’s executive order allowing unionization of the federal workforce.)

Amity Shlaes writes (in the WSJ) of an earlier related piece of legislation:  the Lloyd-LaFollette Act of 1912.  Now that every 5 private sector workers support one government employee, and the first wave of states (NJ, CA) crippled by unfunded public pensions struggle for an answer, perhaps a window to deal with the problem is emerging.

As Governor Christie has said elsewhere, “They (public employees) seek shelter from recession, but the people providing the shelter (taxpayers) don’t have it themselves.”

Here’s Shlaes:

How did we get here? Over the course of the past century, officials and politicians of both parties have sought to shut unions out of government or, when that failed, constrain their power within government. Early 20th-century strikes by police and other public employees were effective but proved politically damaging. Over time, the unions opted for a more quiet form of coercion—what might be called compensation coercion. Their success in this area brought them to the privileged ground they hold today.

The origins of our current predicament began back in 1912. Presidents Theodore Roosevelt and William Howard Taft placed gag orders on postal employees to prevent them from communicating with Congress on any matter, including wages. The gag offended many members of Congress, who then supported a bill sponsored by the progressive Robert La Follette that aimed to curtail presidential authority by making it harder to fire public employees.

The Lloyd-LaFollette Act of 1912 gave federal workers the formal right to organize. What that might portend did enter the minds of the bill supporters. But many thought wholesale unionization too remote for possibility. Others saw Lloyd-Lafollette as a relatively tame statute, a lesser evil that might stall the progressive movement. Unions took Lloyd-LaFollette as the base for a movement.

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