Pay Back To The Unions

Denis Hughes, president of the AFL-CIO in New York, has served as
interim head of the New York Fed board since May. His ascent to one of
the world’s most important financial posts is another troubling sign of this administration’s too-tight embrace of organized labor.

The naming of Hughes as the top banker at the New York Fed is the
real news. And it’s quite astounding.

He has no significant finance experience. Nor does his educational
background — “Brother Hughes,” as the AFL-CIO’s Web site calls him,
has a B.S. degree from the Harry Van Arsdale School of Labor Studies
at Empire State College — reassure us.

Of greater concern is his career as a bought-and-paid-for union official and political operative. The New York Fed chairmanship is hardly a place for a person whose entire career has been spent fighting and strong-arming the very people he’ll now be regulating.

American Thinker editor Ed Lasky put it, Hughes is someone “who may be more schooled in extracting concessions from corporate America than the intricacies of high finance.”

Exactly. More to the point, can those on Wall Street who come before him in routine regulatory matters expect fair treatment?
Will union issues become part of the New York Fed’s agenda? Will banks find requests to expand or merge stymied because unions fear a loss of jobs somewhere?

These are more than just academic questions. The New York Fed is the
primus inter pares, the first among equals, of all the Fed banks. It is the bank that executes the Fed board’s will in the marketplace. It is the on site regulator of Wall Street, playing, as its Web site says, “a leadership role in monetary policy, financial supervision and the payments system.” Now it’s headed by a union shill.

Putting this key Fed bank in the hands of a person whose experience
suggests a bred-in-the-bone hostility to capitalism strikes us as bizarre at best and dangerous at worst. And it bears the unmistakable imprint of the White House. Just last week we wrote about plans to elevate former United Steelworkers adviser Ron Bloom from head of the auto task force to “industrial policy czar.”

Putting so many union people in powerful positions of economic policy making is a recipe for disaster.

Since 1955, the share of the workers belonging to unions has plunged from 33% to about 11%. Still, though increasingly unpopular, unions have helped wreck two major industries: autos and steel. Not much of a track record.

But now, through politics, unions are getting rewarded with control of the economy — a very bad omen for American capitalism.

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