Union Bus Drivers, Fannie Mae Reform and Transportation Partnerships


In New York, bus drivers can take months of paid leave to recuperate from being spit on by passengers.

CEI Expert Available to Comment: Warren Brookes Fellow Ryan Young on why this is an example of  what happens when public-sector unions have too much power.

“New York City Transit is running a $400 million deficit this year. Saliva-induced vacations alone account for nearly a million dollars of that, based on average salaries. That money could have gone towards softening looming service cuts. It could have gone to repairing aging infrastructure. It could have gone to employees who actually work. But when labor rules are as generous as they are for many public-sector union workers, it should come as no surprise that some people will game the system.”



The Obama Administration says that reforming Fannie and Freddie is “too hard,” according to the Washington Examiner.

CEI Expert Available to Comment: Senior Counsel Hans Bader on why politicians shouldn’t shy away from reforming these mortgage giants.

“Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud — $6.3 billion at Fannie Maealone — to increase the size of their managers’ bonuses. As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.”



Public-private transportation partnerships in California face a questionable future.

CEI Expert Available to Comment: Policy Analyst Marc Scribner on why these partnerships are hampered by government red tape.

“In March of this year, [infrastructure development firm] Macquarie’s subsidiary filed for bankruptcy protection (reorganization). Many of the less savvy critics were quick to blame the private sector.  But given California’s particularly ailing economy, bloated regulatory state, and business flight to friendlier states–not to mention that private toll operators still compete with traditional government monopolies–is it fair to blame Macquarie? These problems were nearly entirely the result of sloppy, slow, and stupid government actions. They highlight the inherent flaw with P3s: one of the Ps stands for the public sector.”