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Across the country, the interests of organized labor, elected officials and taxpayers are colliding over wages, work rules and the astronomical costs of retiree pensions and health care. As important as these specific issues are to resolve, there is another, more fundamental problem causing so many Americans to lose faith in their government: It is not government unions per se but progressive government itself—long celebrated in Wisconsin, New York and elsewhere—that no longer produces progressive results. In the early 20th century, the progressives championed a rule-based approach to public-sector management that was a big step forward from the cronyism and corruption of Tammany Hall. Today, however, the very rules that once enhanced accountability, transparency and efficiency now stifle the creativity of public-sector workers and reduce the ability of public investments to create opportunities for citizens—outcomes precisely the opposite of those intended by Progressive Era reformers.