The Chicago Way of Running an Economy

The Chicago Way of Running an Economy

Source: Wikimedia Commons

By Howard Rich
Americans for Limited Government

As Barack Obama’s radical appointees on the National Labor Relations Board (NLRB) continue their jihad against American jobs and the free market economy, many have wondered: From where does Obama get the nerve? Based on what warped ideological mooring does the leader of the free world summon the “audacity” to tell private companies where they can (or in Boeing’s case, “can’t”) locate new jobs?

That’s easy — it’s “The Chicago Way.”

Obama’s hometown sets the standard for union appeasement — although a quick look at the Windy City’s pro-union excesses reveals just how corrupt and unsustainable such practices are.

Earlier this month, The Chicago Tribune reported that 23 retired union leaders will collect $56 million from cash-strapped government pension funds — courtesy of a few well-placed lines that were quietly inserted into the state’s 1991 labor law (with no public debate or cost-benefit analysis). It’s the latest in a long line of flagrant abuses — handouts from corrupt politicians who continue to game the system for the personal benefit of a select, powerful few.

For six decades city government workers in Chicago have been granted “leaves of absence” enabling them to work full-time for the unions while retaining their city benefits (including generous pensions). While such an arrangement is patently unfair to taxpayers and should never have been adopted in the first place, some of the abuses that have occurred under its ever-expanding auspices are downright shocking.

For example, the Tribune recently reported on the story of Dennis Gannon — former president of the Chicago Federation of Labor. Gannon has pocketed $1 million in pension fund payments over the last seven years and is in line to receive $5 million more — a level of compensation five times greater than what the typical government retiree receives.

How did Gannon get such a sweetheart deal? The City of Chicago hired him for a single day back in 1994 — and then granted him an “indefinite leave of absence.” Not only that, they pegged his pension amount to his inflated union salary.

Incidentally, Gannon now draws his exorbitant benefits on top of a six-figure salary from a hedge fund that manages public pensions — and was one of Chicago Mayor Rahm Emanuel’s most generous campaign contributors.

These ongoing union excesses are taking a toll on Chicago taxpayers – and adding destructive force to a ticking time bomb. According to a February 2011 report published by The Civic Federation, aggregate unfunded liabilities for the ten major Chicago area pension funds soared over the last decade “by $19.1 billion, rising from $3.8 billion to $22.9 billion, or $7,098 per Chicago resident.”

The report also noted that eight of the ten funds have seen their funding levels dip below 60 percent — whereas a decade ago eight of ten were funded above 80 percent. When Chicagoans share of the state pension debt is added to the mix, every man, woman in child in the city is on the hook for $11,934 — up from $2,442 a decade ago.

“The Chicago Way” is bankrupting our nation — yet its tentacles extend far beyond the shores of Lake Michigan (or the banks of the Potomac). Such egregious and costly union appeasement is everywhere – even in the home state of the most recent Republican presidential nominee. In fact, a recent Goldwater Institute report revealed that taxpayers in Phoenix, Arizona are shelling out $3.7 million a year for city workers to perform “undefined union business.” Similar deals are in place nationwide — effectively funneling hundreds of millions of tax dollars directly into union coffers.

The Obama administration’s war against Boeing is indeed a war against jobs. But it’s more than that — it’s the latest extension of “The Chicago Way,” a culture of subsidized cronyism that’s exacting a huge toll on taxpayers across the country.

Howard Rich is Chairman of Americans for Limited GovernmentAmericans for Limited Government is dedicated to putting the principles of limited government into action. They work with local groups across the nation to promote freedom, limited government, and the principles of the U.S. Constitution. Their goal is to harness the power of American citizens and grassroots groups in order to put the people back in charge in states across the country.

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