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Obama Thanks His Friends: Government Spending and Union Support PDF Print E-mail
Written by Richard M. Ebeling   
Monday, 08 June 2009 00:00

The Obama Administration has said it places a high priority on spending Federal stimulus money to maintain or create jobs in the economy, including in the auto industry. A major reason behind this push is payback for the financial support American labor unions have given to the Democratic Party over the last two decades.

Since 1990, labor unions have contributed over $667 million in election campaigns in the United States, of which $614 million or 92 percent went to support Democratic candidates. In 2008, unions spent $74.5 million in campaign contributions, with $68.3 million going to the Democratic Party. Already, unions have contributed $6.5 million to the 2010 elections, and $6 million has gone to Democrats, according to the Center for Responsive Politics in Washington, D.C.

In the $787 billion stimulus spending bill passed in February, $90 billion has been earmarked to help cover the tax shortfalls in state and local government budgets due to the economic recession. Most of this money will be used to maintain or increase jobs at these levels of government, since those in political office are apparently unwilling to reduce expenditures and cut public payrolls in the face of decreased tax revenues.

This is no doubt related to $38 million dollars that the American Federation of State, County and Municipal Employees Union has contributed to Democratic Party campaigns since 1990, with nearly $2.6 million being given during the 2008 election. Public sector unions as a whole have given around $160 million to Democratic candidates between 1990 and 2008, with donations of $6 million in 2008.

First the Bush and now the Obama administration have spent or promised at least $60-70 billion to support now bankrupt General Motors and Chrysler. The Obama White House has committed the government and the American taxpayer to keeping afloat both companies in the name of saving jobs in what is declared to be an essential sector of the U.S. economy. It is more easily able to do this now that the Federal government owns majority control of GM and 8 percent of Chrysler,

But it is also the case that the United Auto Workers union has donated almost $25 million to Democratic Party candidates since 1990, contributing $2 million of that total in the 2008 election cycle. Nor should it be surprising that both Democratic and Republican members of Congress have expressed concerns about the closing of any GM or Chrysler dealerships, given that between 1990 and 2008 automobile dealership associations have given $67.9 million dollars to Congressional and presidential election campaigns, with 24 percent of that total going to the Democrats and 76 percent to Republicans.

The Obama Administration has also said that it wishes to make greater federal funding for education a priority during the years ahead, and has shown no willingness to support school choice in the form of vouchers. This is hardly unrelated to campaign donations of the National Education Association and the American Federation of Teachers which since 1990 have contributed more than $50 million to support Democratic candidates running for office. Both unions have been strong supporters of increased federal aid to public schools and have strongly opposed school voucher programs.

The Democrats in Congress and the White House have insisted that a wide variety of public construction projects are essential for recreating jobs, renovating public schools and government buildings, and improving the road and bridge infrastructure. The Obama Administration has announced its intention to speed up federal spending on these projects in the immediate future.

But is it coincidence that construction and industrial workers most likely to benefit from such federal spending in the months and years ahead belong to unions that have contributed huge amounts of money to support Democratic candidates win election? Combined these unions have contributed a least $150-200 million to Democratic candidates since 1990.

In the reality of hardball politics, money talks. Indeed, the logic of special interest and coalition politics explains much of the continuing increase in the size and expenditures of government. (See, Why Government Grows: The Modern Democratic Dilemma, AIER Research Reports, Vol. LXXV, No. 14, August 4, 2008)

The majority party now in control of both houses of Congress and in the White House owes something to those who helped them achieve political power. Unions have been stalwart supporters of the Democratic Party, as the table, below, of the leading union donors to political campaigns clearly demonstrates. The policies and spending programs being implemented are partly the thanks to those who have made the current Democratic majority possible.

Leading Union Political Campaign Contributors
1990-2010

 DemocratsRepublicans 
American Fed. of State, County, & Municipal Employees$40,281,900$547,700 
Intel Brotherhood of Electrical Workers29,705,600679,000 
National Education Association27,679,3002,005,200 
Service Employees International Union26,368,47098,700 
Communication Workers of America26,305,500125,300 
Service Employees International Union26,252,0001,086,200 
Laborers Union25,734,0002,138,000 
American Federation of Teachers25,682,800200,000 
United Auto Workers25,082,200182,700 
Teamsters Union24,926,4001,822,000 
Carpenters and Joiners Union24,094,1002,658,000 
Machinists & Aerospace Workers Union23,875,600226,300 
United Food and Commercial Workers Union23,182,000334,200 
AFL-CIO17,124,300713,500 
Sheet Metal Workers Union16,347,200342,800 
Plumbers & Pipefitters Union14,790,000818,500 
Operating Engineers Union13,840,0002,309,500 
Airline Pilots Association12,806,6002,398,300 
International Association of Firefighters12,421,7002,685,400 
United Transportation Workers11,807,0001,459,300 
Ironworkers Union11,638,900936,000 
American Postal Workers Union11,633,100544,300 
Nat'l Active & Retired Fed. Employees Association8,135,4002,294,600 
Seafarers International Union6,726,8001,281,300 
Source: Center for Responsive Politics, Washington, D.C.

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Comments (14)
Forest City Enterprises
14 Monday, 07 September 2009 02:42
William Knight
On the subject of stimulus and campaign contributions, one should not leave out ACORN or Forest City Enterprises. Forest City gave ACORN 1.5 million to give them a pipeline to Obama and his stimulus. It's unknown how much Forest City has received from Obama, but it should be noted they were on the verge of BK back in March. Now due in large part to 4.9 billion dollars in government subsidies Forest City is said to be shovel ready on their Atlantic Yards boondoggle in Brooklyn. This company is arguably the biggest slumlords in the country. But then again Obama has never met a slumlord he didn't like. Check out this website. It has pictures and stories about Forest City. Wonderful company....eh?
http://cuaccforestcitypixetc.com/
Investment criteria
13 Thursday, 11 June 2009 14:59
Prudent Man
Given the extraordinary financial crisis, governement stimulus, even though financed by public debt, is critical if the current economic spiral is to be reversed. That said, if the govenment is making those investments with debt to be burdened upon the public, the public has the right to demand that government employ a investment analysis (similar to an ROI)to insure that the investment of said funds meets at least the minimum standards for any prudent investor. Given the government's appropriate criticism of the private sector for failing its fiduciary responsibility ought it (govenment) hold itself to a lessor standard?
Obama pays for votes
12 Wednesday, 10 June 2009 12:35
JanSimpson
Nice post. Albeit some are calling this article incomplete or slanted, I think it is a nice article that should lead others to research and find out the truth for themselves. One of my biggest problems with today's society.

SO, Obama during the election would supposedly "text ppl" did they really think that Obama was interested in them or their vote? Did Obama personally send you that wonderous text message or was it automated? Does Obama give a damn about you right now?

I think this article gives a good deal of content and doesn't keep Bush out of the fires - although Clinton wasn't mentioned by name - and he should be - as he and Greenspan are to blame for this current economic downturn.

Again, nice post.
Stimulus Construction Spending
11 Tuesday, 09 June 2009 19:06
Robbed
The article states that construction and industrial workers most likely belong to unions. This is completely false. Only 14% of the construction industry belongs to unions, which may lead you to believe Obama was looking out for the working class and not just unions as post #2 stated, but in reality it reinforces the articles point. Despite the fact that 86% of the construction industry is non-union, Obama issued an executive order requiring project labor agreements (PLAs) for the construction spending that requires the unions get the contracts on all the large projects. It is straight political payback on a huge scale with money steered directly to his political allies at an enormous cost to the taxpayers.
Limited to enumerated powers
10 Tuesday, 09 June 2009 16:39
PreserveTheConstitution
With reference to #6 posted by Mr. Ebeling

When federal gov't power is limited, there is less to "sell" and less temptation to "sin". But, politicians from both parties have coerced power from the states and individuals for one party's cause and left it to the next generation politician to use differently. Once the power is federalized, it's purpose can be quickly changed without direct consent.

States need to take back their power. Start with repealing the 17th Amendment.
Not a commenting Democrat
9 Tuesday, 09 June 2009 09:14
(Optimistic for a turn around in the economy)
I am not a democrat, but a republican, but think that the whole political system is corrupt and due for an over-haul. It took both parties to get us in the situation we're in and I still think that Obama is a moral and honest man, so let's give him a chance and hope that the people he appoints in his administration are also!
Unbiased
8 Monday, 08 June 2009 21:42
Joe blow
Your reporting is totally factual and unbiased unlike mainline media. I assume that is why the Democrats who have commented think you are biased because they are not used to factual reporting but biased left wing reporting from America's media.
Money contributions to political parties and candidateds.
7 Monday, 08 June 2009 21:04
Gerald Lalonde
Both corporations and labor unions contribute to the politicians and political parties that will do their bidding. The only way to stop this "bribery" is for public financing of political campaigns. Of course AIER would hear none of that. So bribery is the order of the day in Washington, DC. and will continue forever or until democracy is completely dead in the USA.
Other People's Money and the Political Process
6 Monday, 08 June 2009 20:31
Richard M. Ebeling
Over the last 40 years or so there has developed an economics of politics called public choice theory.

It focuses on analyzing the behavior of those participating in the political process -- politicians, bureaucrats, and special interest groups -- in the same manner that economists try to analyze the incentives and actions of individuals in the private market place.

It is assumed that those in the political process are also motivated by:

(a) Self-interest, that may include non-monetary or ideological goals.

(b) There are supply and demand relationships, that involve politicians "selling" regulations, programs, and other people's money via taxation in return for campaign contributions and votes.

(c) Special interest groups "sell" their votes and give campaign contributions because they demand something in exchange from politicians: protections from domestic and foreign competitors; redistribution of wealth (e.g., subsidies) to themselves that they are not able to acquire on normal open, and competitive markets by offering products that consumers will buy from them; ideological goals through regulations and restrictions they wish to achieve that they have not been able to get their fellow citizens to accept and voluntary agree to or provide on the basis of reason and persuasion.

(d) Bureaucrats who man and manage government bureaus, agencies and departments, who gain in terms of salaries, promotions and power by obtaining increased authority to regulate private sector activities, and larger budgets for their branch of government.

The theory also attempts to logically explain the process by which special interest groups alone or in combination are able to muster the political clout to gain what they desire, even if the costs of such government regulations, redistributions, and controls are greater than any estimated benefit to the other members of society as a whole.

The older theory of government and the political process implicitly assumed that politicians, bureaucrats, and interested parties were somehow motivated purely by non-personal aims. That is, when in the market place people are assumed to be guided by self-interest, but in the political arena they suddenly become motivated by "the common good."

By putting on a "political" hat people somehow, as by a miracle, are transformed from greedy, profit-motivated "sinners" into altruistic, other-oriented "saints."

The public choice approach to politics merely asks us to think about politics in the same way we presume people are guided in the private market place: what's in it for me.

If one takes this more reasonable approach, then "following the money" often takes us to what is behind much that passes for "public policy" in the arena of politics.

In this the economist is an equal opportunity cynic; he assumes that what motivates Republicans or Democrats, liberals or conservatives really amounts to the same thing: power and other people's money.

If you're a liberal, that's what you assume about conservatives, if it not? And if you are a conservative, is that not what you assume about liberals?

The economist just assumes and analyzes the political process under the presumption that both are correct.

Richard
Both sides funded and misguided - broken system
5 Monday, 08 June 2009 16:42
Patriot
No doubt the folks posting above are Democrats, but the points are well taken. Both sides pander to special interests and are unduly influenced.

Question that faces us all. How can we fix it? Neither party has a solution that will actually work.
Correlation vs Cause and Effect
4 Monday, 08 June 2009 16:35
Skepical Reader
I would not classify this article as "Scientific Economic Research" that AIER purports to present. Rather it is speculation about the reason for Democratic Party actions. It is likely that the unions support the Democrats because of Democrats' long history of support for the working classes. In other words, unions support Democrats because Democrats support the working classes, not the other way around. Why would labor unions contribute to Republicans, who I believe tend to favor large business interests?
Bias on Gov Spending and Union Support
3 Monday, 08 June 2009 15:30
Faith Mann
You must compare union spending to Business Spending to get a true picture. Anyone who bothers to read an economic journal is not that naive.
Political Organization
2 Monday, 08 June 2009 14:25
Optimistic for a turn around in the economy
I had know idea that when I signed up for your news that the majority of your messaging was going to be so politically oriented. It's sad, because you have lots of good data. But, I get the impression that this organization tells me
that they are Obama and democrat bashers. Give the guy a chance and get over the amount that the labor unions have donated to the democratic party. After all it's known that the democrats historically have been known to represent the
working class. Lets report on some of the biggest contributors to the republican party and the fact that lots of republicans have been involved with what has happened to this country. Don't be so negative about the current
administration and be thankful that we don't still have the idiot (whom I voted for twice) still in office.
Government spending and Union support
1 Monday, 08 June 2009 11:00
CCC
This article is incomplete unless it also lists the sum of all other contributions -- readers need to know if these union contributions comprise a large fraction of total contributions.

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