"Educate and inform the whole mass of the people...They are the only sure reliance for the preservation of our liberty." ~Thomas Jefferson

Redistribution of Wealth – The Reality

While Washington distracts and divides Americans with class warfare, pitting the 1% against the 99%, there is indeed a redistribution of wealth happening in this country, but it’s not between the rich and the poor.  Two recent, unrelated stories peeled away the curtain and exposed who’s really thriving at the expense of taxpayers. 

The first report gave the details of a $5.9 million grant that was issued by Health and Human Services (HHS) to a University of Chicago Medical Center program, the Urban Health Initiative (UHI), which is run by Eric Whitaker, a longtime close friend of President Barack Obama. According to the article, “The UHI was one of only 26 programs — out of 3,000 applications — to receive a slice of the $1 billion in taxpayer money from the executive’s ‘We Can’t Wait’ initiative…” UHI and the University of Chicago also have direct ties to the president’s wife, Michelle, the president’s senior advisor, Valerie Jarrett, and long-term advisor David Axelrod.

Of course HHS denies the White House had any influence on the decision to grant UHI the money.  But, this denial rings a bit hollow after the exposure that 80% of DOE Green Energy Loans Went to Obama Backers, including George Kaiser of Solyndra. And, after the Center for Public Integrity documented that nearly 200 Obama bundlers had received direct payments from the federal government, access to federal officials, or appointments to key administration positions.  One example is Ronald Ratner, the president and chief executive of Cleveland-based real estate giant Forest City Residential Group, who bundled $200,000-$500,000 for the 2008 Obama campaign, and as of the end of 2011, had already bundled the same amount for his reelection campaign.  Is it a coincidence that Mr. Ratner’s company just recently signed a 50-year real estate deal with the Unites States Air Force worth well over $300 million?

The second report came from the education politics category, but ironically also took place in Illinois.  Earlier this week, State House Speaker Michael Madigan introduced legislation that would “divert more than $1 billion from local governments to help plug a hole in the state’s underfunded Teachers Retirement System.”  Similar things are happening right here in Pennsylvania.  According to analysis done by Leadership for Liberty and the Pennsylvania School Board Coalition, over 90% of the state education funding increases to school districts across the state are going to the Pennsylvania School Employee Retirement System (PSERS), leaving only 9% for the children.

This transfer of wealth to the public sector unions is no different than the preferential treatment given to the unions during the auto bailouts and the subsequent bankruptcies of Chrysler and General Motors that protected UAW at the expense of shareholders.  While the UAW retirees maintained their pension benefits, non-union, salaried retirees of GM’s suppliers lost theirs.

None of this should be surprising, since it is the unions that are the biggest “outside” contributors to political campaigns.  According to a recent National Review Online article, during the last two elections:

● Big Labor spent nearly $450 million in the 2008 elections electing Obama and the Democrats (New York Times)

Three of the top five spending political groups in the 2010 midterms were labor unions (Wall Street Journal)

One union alone, the American Federation of State, County, and Municipal Employees, spent $93 million on the 2010 elections (Associated Press)

And 2012 is shaping up to be no exception.  Opensecrets.org revealed in March that the single organization that gave the most to super PACs in March was the National Education Association, which gave $3 million to its own super PAC.

Is it any wonder that after all of the money labor unions have spent to buy politicians, who then pass legislation that financially benefits or protects the unions, that union bosses are amongst the very “1%” that they so demonize?  Jimmy Hoffa, Jr.  head of the Teamster’s, for example makes about $300,000 per year.  And, according to the Education Action Group, “American Federation of Teachers President Randi Weingarten, makes the princely sum of $493,859 and NEA President Dennis Van Roekel makes a combined $397,721 in salary and benefits.”  These union leaders are “pushing for higher taxes on the wealthy…to help bail out the nation’s public schools, many of which spend 80 percent of their budgets on Big Labor costs.

And that’s how cronyism works.  The image created by CronyCronicles.org below sums up how wealth is redistributed from the taxpayers to special interest groups like unions, corporations, and wealthy donors, and the politicians themselves.  These special interests spend tons of money electing politicians who then pass legislation that benefits the special interest at the expense of taxpayers.  The cycle continues and the politicians and the special interests siphon money away from taxpayers and put it into their own pockets, thereby strengthening themselves and weakening the taxpayer.


Specifically, in Pennsylvania, the “Union Party,” is preventing much-needed public pension and prevailing wage reforms that we’re seeing in states less “Republican” influence because a majority the politicians in Harrisburg are bought and paid for by the public service unions.  As a result, the state’s taxpayers continue pay higher taxes and are facing enormous unfunded mandates that are threatening to bankrupt the Commonwealth.

Two stories, one relating to a federal grant to a university in Chicago, and the other redirecting taxpayer money from local communities into the pensions of public school teachers, expose the real redistribution of wealth that is occurring in America.  Those who benefit from the redistribution relish the fact that America remains divided along race, gender, class, and political party lines.  While we’re fighting with each other, they’re continuing to pick our pockets and the pockets of our children and grandchildren.  Americans do indeed need to unite, but not behind a political party or candidate.  Instead, we need to stop fighting each other, focus on what is really happening and "un-vest" the power we have lent to our elected officials.  The solutions to this nation's problems will not come from the politicians, who are part of the cycle of wealth destruction and personally benefit from it.  The solutions will come from us, the taxpayers.  We are the only ones that break the cycle.


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