Obama, Keynesian Economics, and Public Labor Unions: Lakota Schools try for another levy

John Boehner In a statement released by the Ohio Republican Saturday night — just a day before talks with President Barack Obama — Boehner said the “White House will not pursue a bigger debt reduction agreement without tax hikes.”

Tax hikes………………….the only way out for groups of politicians who have promised, and promised, and promised so much to so many, yet know they do not have the money to pay it back without more taxes. For those types of politicians the English economist John Maynard Keynes provided them with a way to loot money from the public in the appearance of good will, and still purchases political power for themselves. About the same time another economist named Friedrich Hayek came on the scene to refute Keynesian economics and this battle has been going on for nearly 100 years.

That video is a very clever way to articulate the two economic theories. Here is a bit more about these two economists at an economic conference. There was a time in the 70’s, when Jimmy Carter had used Keynesian economics to spiral the nation out of control, that Keynes was dismissed as relevant. Ronald Reagan had used the philosophy of Hayek to resurrect the economy in the 80’s with Reaganomics, much to the dismay of Keynesian fans who are typically Democrats and Progressives.

It is these two economic theories that are at play in these recent school battles where public schools claim to be broke and believe that spending is the way to improve education, solve all social problems, and maintain an infrastructure of expanding government by teaching into the very young the principles of Keynesian economics, submission to authority, and the role of big organized labor in the fabric of social engineering. So it comes as no surprise that on this day of July 11th 2011, the Lakota School District, the 7th largest district in the state of Ohio and one of the wealthiest decided to put another levy on the fall ballot. Being an institution of education structured by their labor unions around a Keynesian economic model, the school board understands nothing else. They have as a district done exactly what the federal government has done on a national level, and that is spend themselves into oblivion leaving tax hikes as the only way out.

It’s funny that Hayek doesn’t get any respect in these videos because in real life he doesn’t, even though his economic theories are proven more relevant, and far superior. The reason for the lack of popularity of Hayek is that politicians don’t like him. Politicians looking for a vote like to give things away in order to buy those votes and Keynesian economics provide them with the excuse to do so. Public schools are absolutely no different. Schools give away college electives, busing, and school sports in a political trade for an endless supply of tax revenue to support their Keynesian economic views.

This is the reason a school district like Lakota believed that if they spent $50K on a search for a new superintendent, and then paid that superintendent $165K per year over the assistant superintendent who was making only $105K per year, that they would have success in balancing their budget deficit. The school administration believes that if they spend more money, they will automatically get better results.

This belief system of course comes from the union labor influence, where they purposely take advantage of not just the administrator’s economic ignorance in matters such as these, but also the tax payers. Unions are big government advocates who subscribe religiously to the Keynesian model. Hayek’s economic theories are a severe threat to them.

Schools are currently facing a bust cycle, because the cost of education is artificially high. Facing this bust cycle in Ohio, Governor Kasich signed Senate Bill 5 into law to help school boards deal with this natural cycle and still maintain the level of education services that are needed for our society to function. This has drawn national attention from of course President Obama who is very friendly to union labor and Keynesian economics. Over the 4th of July holiday the NEA (National Education Association) voted to pass a $10 tax on their union members to support the Obama reelection bid.

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This isn’t just happening on a national level; in Ohio the OEA (Ohio Education Association) is mandating a $50 fee from all its members to fight Senate Bill 5 in order to raise 20 million dollars to repeal S.B.5 in November. Firefighters are demanding $100 from their own members. All that money comes from the taxpayer indirectly. Artificially high wages for these public sector jobs makes fees of this kind feasible to be used against the tax payer in lobby power purchased from these massive public union memberships and that’s a big problem.

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What the unions are doing, and Obama is perpetuating in his refusal to deal with the Republicans demands to cut spending, is trying to prevent the natural bust cycle that is facing the nation by throwing more money, (our tax money) at the situation to maintain the promises they have made to themselves and their members for decades.

The average teacher at Lakota makes over 60K per year, which is much more than the tax payers who pay their salaries. This is justified by state law citing that various degrees obtained by teachers in the state of Ohio must be compensated accordingly. It does not matter that the residents of Lakota do not need kindergarten teachers who have master’s degrees, and are being paid by the community for those degrees even though the market cannot support such concepts. The union lobby using membership funds have shaped the law to suit their Keynesian economic model which is a severe flaw that is detrimental to anyone who pays taxes.

So again, our community will be in for another fight against the Lakota School System as organized labor have embedded themselves into our politics so deeply that they can dictate what type of economic strategy our elected officials use to deal with the financial realities of our times.

The difference between now and in the past, where the NEA, the OEA and presidents like Obama and many other progressives have pushed Keynesian economics to satisfy their political deals, is now people are learning about the tricks that have been played on us all for many years. The millions of dollars of lobby power, the fear mongering that money spent equals success, the strikes to artificially drive up wages, all that is coming to a close because people are learning.

And my response to this recent attempt by Lakota to pass yet another school levy when the tax payers of the district are already heavily taxed, just as we are nationally, it is the expectations that must be attacked, and will be exposed heavily in this next campaign which I look very much forward to fighting this fall. The fight is over a failed economic theory by Keynes and the economic intelligence of Hayek. That battle is underway and there will be a lot of broken hearts in the meantime, but the fight must be fought because without the fight, there will be no tomorrow as we know it or expect it. Depending on the victor of this battle tomorrow may or may not be left to our decisions. And I will fight this battle on the side of Hayek!

Good luck Lakota, you’re going to need it!

Rich Hoffman


14 thoughts on “Obama, Keynesian Economics, and Public Labor Unions: Lakota Schools try for another levy

  1. To fight these levies we need community groups and individuals who care enough to take the time to educate themselves about the conditions and challenges of the school systems. (These levies are going to be fought in many districts.) Parents, grandparents, citizens must take action, stand up and take our schools back.

    The Obama administration, with Secretary of Education Arne Duncan leading the fray, has decided that they can dictate reforms in education. The administration is going to enforce “Common Core” curriculum standards. Many, justifiably, fear federal control of exactly what our children will be taught. This action is in contravention of existing law and is unconstitutional.

    Hayek, in his book “The Road to Serfdom, warned against the dangers of state control over the means of production. The Collectivist idea of empowering the government would lead, not to a Utopia, but to the horrors of Nazi Germany and fascist Italy.

    Children do not need to have dictated, government mandated schooling. Children and parents need school choice and teachers need to have the freedom to offer a curriculum that meets the needs of the children they are teaching. Government control of most things destroys individual liberty.

    As, most can imagine, the root of these new dictates have been supported by the NEA.
    They would rather use coercion than a free and open choice. A choice that would give them the competition they could not beat.


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