More Silly Economic Thinking in the ‘Burgh

According to the Post- Gazette followers of Paul Krugman’s school of incoherent economics, the cause of our country’s slow economic growth is inadequate government spending and the unwillingness to levy higher taxes. Their silliness is encapsulated in the assertion that cutting spending will cost some Federal government workers their jobs, thereby worsening the nation’s jobs picture. Apparently, the geniuses who came up with that gem have never noticed that the bigger the Federal civilian payroll the weaker the nation’s private sector ability to create activity and new jobs.

Here is the sad truth. The U.S. has been under the whip hand of massive deficit spending for three years as well as the most "stimulative" monetary policy imaginable. And still the economy languishes with subpar growth and ongoing large layoff announcements. Granted, the housing collapse and the attendant financial crisis of 2008 meant recovery would take longer and be more difficult than a typical recession.

However, the President and the Democrat controlled House and Senate opted to begin piling huge new regulations on the economy through constitutionally questionable Obamacare, the EPA and the NLRB that, taken together, have acted as a massive anchor on the economy. The administration’s fealty to organized labor was demonstrated through the terms of the auto company bailouts, support for Card Check, refusal to denounce the goonish tactics of labor unions in Madison Wisconsin, and more recently the insanely destructive NLRB ruling on the Boeing Company’s plans to open a manufacturing facility in South Carolina. Regardless of how the courts eventually rule, this NLRB-and by definition Obama supported-action has cast a pall over the nation’s free enterprise system. Nothing can be more chilling to business investment than the prospect of government agencies telling companies they cannot locate legally in a state of their choosing.

The unwillingness of proponents of ever more spending and taxes to realize the damage already being done by that approach and their inability to link the heavy handedness of government regulators and burdensome regulations to the increasing caution of business people to invest or hire new workers or retain existing workers speaks to an ideological blindness of monumental proportions. Sadly, decades of programs that have made a large fraction of Americans dependent on government or the beneficiaries of government regulations, along with the fact that 50 percent of citizens pay no income tax, have created a huge voting bloc who are completely vested in keeping government growing in size and scope.

As noted in a blog last week, handout and entitlement programs can be sustained only by having a growing private sector economy capable of producing adequate tax revenues at low tax rates that do not threaten after tax rates of return on investment. Failure to recognize the need to strengthen and encourage the free enterprise system through a better set of tax and regulatory policies will inevitably be the nation’s undoing as a republic of free people.

Pennsylvania Players Can’t Call the “Right-to-Work” Play

As the National Football League moves closer toward the end of its lockout and the adoption of a new collective bargaining agreement between the league and the players’ association, the latter needs to decide whether to recertify as a union. The head of the union stated "Here in America, every time an employee makes that decision about whether he wants to be a part of a union, it’s something that is serious, significant and should be done in a very sober way".

Interestingly enough about one-third of the NFL’s teams are located in Right-to-Work states where workers are not compelled to join a union or pay union dues as a condition of employment. Don’t count the members of the Steelers or the Eagles among them as Pennsylvania has been unable to enact a Right-to-Work law. Since the players are part of the private sector headcount, they are a part of the trend in union membership that we documented in a Brief this past May. To wit: private sector union membership in Pennsylvania fell from 15.6% in 1990 to 9.3% last year. Yet the enormous power wielded by unions and their supporters in the Legislature trumps the broad interest of the citizenry to bring the issue to the floor of the General Assembly.

So yes, deciding to joining a union should be done in a serious and sober way. But that right is curtailed for Pennsylvanians. Wonder what the NFLPA would think about card check? And what a union it is. The members have guaranteed collective bargaining rights and have substantial protections from the teams and the league. At the same time the players negotiate individual contracts with the teams they play for rather than having wage scales set for the various positions that all teams must pay and all same position players receive with no premium pay for big stars. Would it not be interesting to require teachers and bus drivers to negotiate individual contracts?

Boeing, Boeing, Gone

The National Labor Relations Board, in a spasm of uncontrollable zealousness, has told Boeing it cannot locate a plant in South Carolina because it is unfair and harmful to the workers at plants in Washington State. It is not unreasonable to argue that, if allowed to stand, this NLRB ruling will have an incalculably harmful effect on the future of American industry and the U.S. economy. The precedent will have been set for the government telling businesses where in the country they can locate operations. Piled on top of all the other onerous regulations businesses already face and the high corporate tax rate in the U.S., this new government power will chase even more investment and jobs out of the country-an ineffably stupid and inexcusable self-inflicted wound.

Unfortunately, the Boeing episode is just one more manifestation of the virulently aggressive anti-business, anti-free market posture of the current administration and its agency appointees. It reflects a bias towards ever bigger, more intrusive government and overt, unquestioning loyalty to unions. Coming on the heels of extravagant and dangerous spending, running up massive deficits, curtailing domestic oil exploration, failing to safeguard the southern border, the union favoring bailout of GM and Chrysler and the passage of Obama’s health care bill, the interference with Boeing’s freedom to invest where it sees fit reveals an undisguised contempt for the rule of law and freedom. It also indicates the utter disdain the administration holds for states that did not vote for it or that might be unwilling to vote for it in 2012. Is it even imaginable that the NLRB would have issued the ruling against Boeing if the new plant was being constructed in Illinois or California?

Like the proposed card check law-arrogantly and flagrantly dishonestly called the freedom of choice act by the bill’s authors-the Boeing decision is an attempt to run roughshod over those who have shown a willingness and ability to stand up to unions and successfully push back. If not defeated, these actions will lead to the wholesale destruction of property rights and freedom in the country. And the result will be fewer jobs, not more, a weaker and far less competitive economy. Qui bono? Who gains from such an outcome? In their minds, it will be the party that promises to take care of everyone’s needs even though it will be rapidly running out of resources to do so.

The NLRB ruling on Boeing could be the nation’s economic Rubicon. The willingness of the administration’s justice department to ignore truly egregious cases of law breaking while suing states that are trying to protect their own citizens from what amounts to a foreign invasion points to an administration whose insatiable appetite for power will not and cannot be deflected or deterred. Not even a major repudiation of its party at the polls in November has had more than a momentary effect on the pursuit of massive and irreversible changes to the American economic and social landscape. In another year and a half of more and increasingly egregious efforts to undermine the economic foundations of the nation, will the country be able to recover? With the willing accomplices in the media and academia, the administration is emboldened in its relentless work of fundamentally transforming the U.S. as it promised when campaigning. Never mind what the majority of the American people want now that they have had a chance to see what transformation means.

The NLRB’s Boeing decision simply cannot be allowed to stand. We are imperiled economically and morally by the threat to property rights and freedom imbedded in the ruling.

California Senate Pursues Complete Destruction of State’s Economy

A couple of weeks ago the California Senate, by a vote of 24-14 along party lines, approved the state’s version of Card Check-shorthand for the grotesquely named Employee Free Choice Act.

Rare is the piece of legislation that portends so badly for worker freedom or the economy. Instead of a secret ballot to determine if a company’s workforce wants to be represented by union and adopt a collective bargaining, getting 50 percent plus one of the work force to sign a card asking for an election would be sufficient to force the company to recognize the union. The scheme requires Federal arbitration if the company and union cannot reach an agreement on a contract.

Card check obviously gives union organizers a very powerful advantage over companies. The intimidation to get employees to sign a card would undoubtedly be rampant. Getting workers to sign a card is child’s play for union stalwarts. And having the mandatory arbitration hanging over the company if they don’t meet union demands guarantees the union will get almost everything it wants.

So, the work force is intimidated into approving union representation it does not want and the company will be forced to live with compensation and work rules that are inimical to its profitability.

Is there any doubt what will happen to business formation of new businesses and attracting companies to California if the Senate bill eventually becomes law? One can only gape in slack jawed amazement at the economic death wish of the Democrat members of the Senate. This is made even more stunning when one considers the deplorable condition of California’s finances and the flood of people and jobs fleeing the state.

Unions Don’t Have Much Confidence in Their Members

We have had a ringside seat in Wisconsin for the past few weeks of the unpleasant aspects of militant unionism. The nation has watched people disrespect public property, hurl physical threats against legislators they disagree with, illegally enter into the Capitol, support Senators who flee the state rather than honor their responsibilities, and carry Obama defying signs that could be interpreted as inciting violence. Of course the President has apparently forgotten his Tucson speech in which he asked for a more civil tone. Not a word was forthcoming about the hate and intemperance spewed daily in Madison.

But the real underlying story that is not being talked about is what the unions’ opposition to Wisconsin’s new public sector labor law says about the unions’ fear of their members. Union claims that Governor Walker is destroying collective bargaining rights are a smoke screen to hide what they are actually afraid of, namely, that the new law forces unions to be re-certified by membership annually by a vote of 51 percent of eligible voters and the government will no longer deduct union dues from worker paychecks and remit the money to the unions.

If union leaders and hard core members are confident of the support and allegiance of a large majority of members as they purport to be, why are they worried about re-certification and why are they worried about members not freely paying dues on a timely basis? These changes to the law should make no difference at all if most are dedicated to the unions. But that is the point; many unions have lost re-certification elections in recent years. That has led to the need to have the Obama administration use blatantly pro-union tactics and rulings to maintain private union power have to be worrying labor leaders.

With steadily shrinking private sector union participation, the public sector unions are where the movement will have to be saved. And they fully understand that. As a result, they undoubtedly view what is happening in Wisconsin and Ohio as a mortal threat to the labor movement. Thus, the tactics they employ are and will reflect the perceived threat to their existence.

Who Rained on Labor’s Parade?

Newspaper reports on the Labor Day parade Downtown noted that something was missing from the march: spectators. In fact, people walking in the parade outnumbered people watching. What gives?

Was it the economy? One union official flippantly noted the bad economy and remarked that people who would normally be there were probably out looking for jobs. Was it the weather? We can rule that one out as Monday stood in stark contrast to the 2009 affair when it was noted "the cool, drizzly weather appeared to thin the parade crowd considerably".

Or could it be a sign of taxpayer disenchantment with unions and theirnever ending quest to make government bigger, more inefficient andcostlier?

Except for union members and their immediate families andthe hardest of the hard left, labor’s all out support of Obamacare,stimulus spending to save government jobs, card check, and higher taxes on the national level and the presence of their influence in state and local policy including the lack of Right to Work or prevailing wage reform, continuing threats of teacher and transit strikes, and opposition to outsourcing and privatization is finally getting through the public’s consciousness as being a majorcause of the ongoing funk in the economy.