« Contributing to Regime Uncertainty | Main | Bush, McCain, Obama, Volcker, Ears, and Surprises» Don Boudreaux
October 21, 2008
Reality-Based?
Don Boudreaux
Here's a letter that I sent today to the New York Post:
Richard Epstein explains how the "Employee Free Choice Act," supported by Sen. Obama, will impose especially large burdens on small businesses - a fact at odds with Sen. Obama's pledge to promote such enterprises ("A Labor Dilemma for President Bam," Oct. 21). By raising employers' costs of hiring American workers, this Act will also increase off-shoring, another phenomenon that Sen. Obama loudly deplores.
The general lesson here is that politicians are akin to faith-healers. Both pose as wizards; they use enchanting words to push crackpot potions. The faith-healer dupes his customers into believing that he will suspend medical reality; the politician dupes voters into believing that he will suspend economic reality. Both are frauds.
Sincerely,
Donald J. Boudreaux
Posted by Don Boudreaux in Politics, Reality Is Not Optional | Permalink
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Comments
"By raising employers' costs of hiring American workers, this Act will also increase off-shoring, another phenomenon that Sen. Obama loudly deplores."
Why would it push jobs overseas? We have free trade right? I assume they follow the same labor laws as us right?
Or is the fraud that we don't really have "free trade"?
Posted by: muirgeo | Oct 21, 2008 12:09:41 PM
No, we don't have completely free trade, unfortunately. However, what does free trade have to do with labor laws? Why in the world would a trading partner have to have the same labor laws as us? Obviously it would be impossible for two countries to have the same labor laws, and also undesirable. In what way is this fundamental reality a "fraud"?
Posted by: Cliff | Oct 21, 2008 12:29:09 PM
Muirgeo,
The economics are straightforward: as the cost of using an input rises (and, hence, as the attractiveness of using THAT input falls), the relative attractiveness of using alternative inputs rises. Higher costs of using domestic labor will cause some firms to substitute, at the margin, machines for workers -- doing so more than they would otherwise have done.
By the same logic, the higher cost of using domestic labor will cause some firms, at the margin, to hire foreign workers as substitutes. This response of domestic employers to higher domestic labor costs does not depend upon there being completely free trade between the home country and the countries to where the work is off-shored; nor does it depend upon the similarity or differences between the various countries' labor or trade regulations. (The only way another country's regulations would nullify this effect is if, at the same time Uncle Sam imposed his policy that raised the cost of hiring American workers by X percent, the other country's government simultaneously raised the cost of hiring workers there by X percent -- an extremely unlikely case.)
Posted by: Don Boudreaux | Oct 21, 2008 12:34:19 PM
Quote from muirgeo: "Why would it push jobs overseas? We have free trade right? I assume they follow the same labor laws as us right?"
Only if their stupid enough to elect the same kind of socialists.
Now you're projecting your collectivist desires on to the whole world.
Posted by: Keith | Oct 21, 2008 12:35:22 PM
If higher unemployment and underemployment are his goal, Barack will achieve it.
If it becomes more expensive to hire workers, fewer workers will be hired or the business will move to a country with cheaper and/or non-unionized labour.
Honestly, at this point, I almost want the Barack, with the help of congress, to inflict all this stuff so that we can get the replay of the 1970's over with and get to the backlash.
Posted by: Methinks | Oct 21, 2008 12:39:04 PM
methinks - I think we shouldn't jump to conclusions about what Barack will do. He says one thing to his wild-eyed leftist supporters to get elected and will probably betray them. Just like Pelosi betrayed the liberals by saying "impeachment is off the table". It seems lefties never learn their lesson - don't trust their lying leaders.
Posted by: Crusader | Oct 21, 2008 12:40:56 PM
Don, you wrote:
"The general lesson here is that politicians are akin to faith-healers. Both pose as wizards; they use enchanting words to push crackpot potions. The faith-healer dupes his customers into believing that he will suspend medical reality; the politician dupes voters into believing that he will suspend economic reality. Both are frauds."
I would have stayed on the mark created in your first paragraph as opposed to generalizing and written it as:
"Obama is akin to faith-healers. Both pose as wizards; they use enchanting words to push crackpot potions. The faith-healer dupes his customers into believing that he will suspend medical reality; Obama dupes voters into believing that he will suspend economic reality. Both are frauds."
Not all politicians are equally akin to faith-healers; and Obama is very like one.
Posted by: indiana jim | Oct 21, 2008 1:22:31 PM
Jim,
I'm more skeptical of all pols than you are. I agree that some are indeed better than others. And I would agree that even some of the ones whose preferred policies are especially awful might be motivated by good intentions. (But what is worse: a faith-healer who truly believes his own hooey, or one who is simply out to screw people with his hooey?)
The general lot of politicians is so sorry and sick that I get no satisfaction -- even as I might get wonder -- when I encounter one who is, by the standards we try to instill in our children, a decent human being.
Posted by: Don Boudreaux | Oct 21, 2008 1:33:11 PM
(The only way another country's regulations would nullify this effect is if, at the same time Uncle Sam imposed his policy that raised the cost of hiring American workers by X percent, the other country's government simultaneously raised the cost of hiring workers there by X percent -- an extremely unlikely case.)
Posted by: Don Boudreaux
I suggest that should be the case. Continuing the Hockey analogy would it be fair that competing countries in the Olympics got to play by their own rules. So the Russian team doesn't use off-sides but the U.S. does. So when they compete they are bound by different rules.
If you don't have a set of rules or there simply are no rules you will indeed have a race to the bottom with even greater exploitation then already occurs.
At what point between trading with fair rules, to trading with communist to trading with child laborers or slave laborers do you draw the line.
There needs to fair rules Don for without them there is not fair competition and freedom and liberty suffer as the dollar chases the least common denominator.
I don't want a cheaper piece of plastic Don if it's made with coercion or despair or desperation or lack of choice. There are other issues besides price. Please step out of your economic bubble and realize the real world does not run according to anyones prize theory. It's just possible the world accourding to you could be a much more miserable place for freedom and liberty and economic prosperity. And again maybe you are right but I just can't square the reality I see with the claims you make.
Posted by: muirgeo | Oct 21, 2008 1:47:50 PM
Thanks Don, there is no doubt in my mind that most of the politicians currently in the Congress of the US deserve your disdain, as does Obama (as your article in the Post suggests).
Posted by: indiana jim | Oct 21, 2008 1:51:24 PM
Muirgeo,
The point of economic competition is not the same as that of sports. Economic competition is not meant, as an end in itself, to discover which producers are best in any particular industry. It is meant to ensure that producers keep striving to satisfy consumer demands as best as they possibly can.
Paul Krugman, in his book Pop Internationalism, is very good on this point.
Either way, though, your point here does not address the point in my letter. That point is a positive (that is, predictive) one; not a normative one. Like it or not, if the cost of employing workers in the U.S. rises, it's a good bet that there will be more off-shoring.
Posted by: Don Boudreaux | Oct 21, 2008 2:01:55 PM
Well George, thanks for pursuing this far enough to reveal HOW you miss the point.
Don was speaking to IS while you were pursuing SHOULD.
Other countries do have different rules.
Often, the difference in rules make it advantageous for business to operate in other countries.
The only input the U.S. gov't has on the matter, other than prohibiting off shoring, is in making sure OUR rules don't give the advantage away.
Posted by: Sam Grove | Oct 21, 2008 2:19:39 PM
I find the referenced bill infuriating.
By eliminating the secret ballot, the unions will almost certainly increase their membership by increasing the effectiveness of strong-arming and intimidation tactics.
Today, a dissenter can say that they will vote for the union in public (if they have to do so to keep the peace with their friends and co-workers) but vote their true preference in the voting both.
That will no longer be an option if this bill passes.
This just proves to me that modern liberals are fascists.
Posted by: Chris O'Leary | Oct 21, 2008 2:20:38 PM
"Honestly, at this point, I almost want the Barack, with the help of congress, to inflict all this stuff so that we can get the replay of the 1970's over with and get to the backlash."
I think this is many people's hope.
Worst case you have to put up with 2 years of this and then the country will come to its senses at the mid-term elections.
Posted by: Chris O'Leary | Oct 21, 2008 2:22:24 PM
George, consider the mechanics of small business outsourcing and Don's point becomes very clear. Let's say I own a little software business or you own a medical business. I need a developer to do various projects. Maybe you do so many x-rays, you need a skilled technician on staff to read them. Let's say that Obama makes it more onerous for us to hire people directly to work for us here. As small business people, we're not going to look at the alternative of adding direct hires in India. But what we might consider is outsourcing to a company in India. We probably have to do a little better job on an ongoing basis defining the work, and may have to relinquish some control we would have as direct employers. But we'd get the work we need and probably save money over hiring American workers. As a bonus, we'd put our orders in in the afternoon, and have them turned around by morning while we sleep. Make sense?
Posted by: BoscoH | Oct 21, 2008 2:45:14 PM
I seek enlightenment.
I have two big problems with the Card Check proposed bill [which I have read in its entirety -- it's not that complex. It's HR 800 2007; thomas.gov is your friend [except that it doesn't give permalinks :-( ].
1: There's the possibility of coercion. That one is, I hope, obvious.
2: There's also the possibility of retroactively gerrymandering the bargaining unit, so if you get 45% because one office doesn't want a union you can just choose the bargaining unit to exclude those.
Can someone who likes HR8000/2007 explain to me what's wrong with the secret ballot to choose whether to have a union? What's broken that forces us to discard a cherished American tradition?
I would sign onto a law that required the election to happen in a timely manner, and maybe one that would allow the union organizer to host a mandatory meeting if the company does [although to be fair, the company is merely paying the employees to attend a meeting, which the organizers are free to do -- but all right, I'll give on this] but why is a secret ballot a bad thing?
-dk
Posted by: Dick King | Oct 21, 2008 2:49:00 PM
In a free market, people enter transactions that they think are in their interest. In choosing who to do business with, they look for the best business partner. Just as you might search for the best deal on a car, or the supermarket with the lowest prices, or the mechanic who is reliable, employers are looking for the best person to purchase labor services from.
The competition that people decry is intended to help people find partners to cooperate with. Many people seem not to recognize this.
Posted by: tarran | Oct 21, 2008 2:53:02 PM
Early Boomers and the Economic Mess
Reich senses a connection between "boom" and "mess", but he doesn't actually make the connection here. For one thing, he describes 55 year olds as "early boomers", but the "baby boom" stretches roughly from 1945 to 1965, so a 55 year old is a mid-boomer, not an early boomer. A 45-year old is a late boomer. The early boomers are just about 65.
Baby making never actually boomed. It busted, twice. Birthrates following W.W. II were never abnormally high. Birthrates during the Depression and the War were abnormally low, and birthrates (in the U.S.) since the Griswold decision are abnormally low. We've presumably reached a new equilibrium, so lower birth rates are becoming normal, but the period between the war and Griswold was normal, not a boom.
What actually happened in the mid-sixties was not the end of a baby boom but the start of a decades-long period of enjoying the misleadingly labeled "demographic dividend", a period of investing in only half (at best) of the capital required for growing output and a period of consumption masquerading as investment, all while mortality continued its century-long decline.
Three significant economic developments of the 20th century now approach fruition, artificially depressed birth rates, artificially lengthened life expectancy and an apparent triumph of State Capitalism encouraging common people to substitute an expectation of financial rents for the yield of previously common investments (child rearing, growing labor on family farms).
Is that some kind of "socialist" conspiracy theory? Ask Ben Wattenberg at the American Enterprise Institute. His book Fewer is the best treatment of the subject I've read. Or ask Ludwig von Mises and Julian Simon. If Human Action is The Ultimate Resource, what happens when we "invest" for decades in promissory notes of dubious value rather than in human action? We're about to find out.
We're on the cusp of "baby boom" retirement, and the signs are unmistakable. The payroll tax surplus peaked this year. Given its historical significance, this event should be headline news, but it's not. I've hardly seen it reported at all, and I see Robert Reich describing current events as though we're ten years out from the climax of this crescendo even while the cymbals are sounding. This peak is significant not simply for the Social Security program but for the demographic change it signals, a change with effects certainly reaching far beyond the Social Security program.
To hear the statesmen talk, you'd think that the adjustment to the "baby boom" will begin when their "trust fund" runs out of money in thirty or forty years, but of course, the adjustment will be over by then. By that time, we'll have replaced a quarter of the benefit stream with income tax revenue "repaying the trust fund". When the "trust fund" redeems its last bond on a partiuclar day, we won't suddenly cut benefits 25%. We'll go on paying benefits from the same revenue stream indefinitely. That was the plan all along.
The interesting part of the story is starting right now and has little to do with the Social Security system. Boomers now scramble to exchange their "growth" investments for "income". This tendency is not limited to early boomers but extends well into the mid-boomers, so the effect is very significant. Haven't the financial planners told us to expect this development for decades?
In real economic terms, this entitlement gaming is not most significant. Productivity growth in recent decades doubled the output of individual workers, and the boomers themselves are these workers. Real economic growth and growing living standards require the relatively small generation following the boomers to replace the boomers' productivity while also paying the rents boomers expect and even now construct for themselves at an incredible rate. These rents are hardly limited to Social Security system.
Even if you believe that mark-to-market is the problem, because markets don't understand the value of these "securities" though the "securities" are really worth what the financiers say they're worth, this belief is irrelevant, because Paulson isn't buying the securities now, even though he advertised this policy only a few weeks ago. He's now buying shares in the banks, and a bank's shareholders presumably are paid after its bondholders. Fancy that.
Posted by: Martin Brock | Oct 21, 2008 2:56:14 PM
I tried to post the preceding several times in "David Henderson on Today's Economy", but that thread doesn't seem to accept new posts, so here it is.
Posted by: Martin Brock | Oct 21, 2008 2:58:43 PM
Martin, so you had that problem as well. The post counter changes but the new post does not appear.
Posted by: Methinks | Oct 21, 2008 3:15:31 PM
Dick,
A trades union in the United States is a cartel. It seeks to raise wages for its members above market clearing rates. Of course, this is very difficult, since in a free market, a customer could choose to change labor suppliers to ones that are demanding less money.
When the United States flirted with economic fascism in the 20's., 30's and 40's, factory workers in the North became very upset with competition from southern workers, either located in the south, or via migration to the north.
These factory workers lobbied for laws that forced labor customers to do business with the major trade unions. The parcel of laws included minimum wage laws (which made non-union labor more expensive), and the creation of the NAtional Labor Relations board, which gets to determine which supplier customers of labor services must make their purchases from.
The laws made it easier for the cartel to operate. The NLRB decrees which portions of a company comprise a bargaaining unit. It oversees the elections wherein 50%+1 of the workers in a bargaining unit can bind workers at that unit to a union infinitely into the future. It prohibits the customers from interfering with the attempts of the union to persuade or threaten people into joining the union.
The unions had an interesting effect: by making union labor extremely expensive, they made unions unattractive to businesses. The rigidity also is unpleasant to union members as well (I worked at LTV steel for a number of years, and the rage of the rank and file at the union leadership over the way the leadership had hurried the company into bankrupcy was something to behold).
In a global marketplace, businesses that purchase labor services from American trades unions find themselves at a disadvantage with their competition on price and quality. Thus, the unionized businesses tend to fail, and the non-unionized ones thrive. The result, union membership is at an all time low.
Now, unions get paid by the number of members are on the payroll at any time. Thus, this phenomenon has been catastrophic for the bottom lines of unions. They are seeking ways to get more people on the payroll.
This, incidentally, is why many libertarians are vicious in their condemnation of unions. They don't see a group of people banning together to improve their bargaining position. They see, correctly, organizations that are built on coercion. If people were free to join or leave unions at will, and if businesses were free to hire or fire unions at will, then the objections all vanish.
Posted by: tarran | Oct 21, 2008 3:16:44 PM
Methinks, My experience exactly.
Posted by: Martin Brock | Oct 21, 2008 3:26:28 PM
Honestly, at this point, I almost want the Barack, with the help of congress, to inflict all this stuff so that we can get the replay of the 1970's over with and get to the backlash.
Posted by: Methinks
Dude... dudette.... we are already getting a replay of the 70's and likely far worse. What newspapers are you reading? And it wasn't the Baracks of the world running the show.
Hey I was looking for a Lenin quote I thought you posted the other day. I can't find that. I thought it was describing the situation from his view just before the revolution to which you replied, "sound familiar". Do you remember where you posted that ?
My point was to be that he was describing a failed society based on unrestrained capitalism and you were asking..."sound familiar"... to which I wanted to reply... duh...YEAH!
Same thing here... you stand in the mist of disaster telling us yeah but what if Barack gets in. That's dopey!
Well my guess is if he gets in and we start rewarding people for making things rather then pushing paper around... the economy.... the real economy will get better. of course things are so f'd up because we let republicans play with libertarian ideas that it's hard to say how long this disaster will last.
So hopefully in another 4 years we will have markets more like Clinton's than W's or Reagan's.
The evidence and I'd say the theory are strongly in my favor.
Posted by: muirgeo | Oct 21, 2008 3:35:51 PM
I think this is many people's hope.
Worst case you have to put up with 2 years of this and then the country will come to its senses at the mid-term elections.
Posted by: Chris O'Leary
And then in two years what will happen???? People will re-elected republicans ???? Cause they've done so good.
Dude, if you need some help with this let me know. I'm a doctor... I think I can help.
Posted by: muirgeo | Oct 21, 2008 3:40:31 PM
O'Leary "Worst case you have to put up with 2 years of this and then the country will come to its senses at the mid-term elections."
No, Chris, that's BEST CASE. Worst case is 8 years of B o' B and then Hillary's back again.
Posted by: Needy | Oct 21, 2008 3:45:20 PM
the real economy will get better. of course things are so f'd up because we let republicans play with libertarian ideas that it's hard to say how long this disaster will last.
That's just stupid, once the Republicans became the government, the outdid the Democrats.
The Republicans establishment hates libertarians, hates Ron Paul, and pays only lip service to smaller government to retain the support of economic conservatives.
Posted by: Sam Grove | Oct 21, 2008 4:10:08 PM
"Can someone who likes HR8000/2007 explain to me what's wrong with the secret ballot to choose whether to have a union? What's broken that forces us to discard a cherished American tradition?"
It's not producing the result desired by the unions and their friends, which is increasing union membership.
Since the people are too stupid to know what's good for them, a process must be put in place where they can be "encouraged" by their peers and public scorn to understand what's good for them.
Posted by: Chris O'Leary | Oct 21, 2008 4:14:55 PM
Dang, so that's what happened to my post in the Henderson entry.
I was replying to muirgeo's cut n' paste to the effect that...
Murgeo, I'm waiting for the explanation of how that supports the thesis that:
The meltdown is a result of "deregulation".
That there actually was some sort of "deregulation".
That the increased regulatory budget under bush represents "deregulation".
I'd also like to know how it came to be that the so-called deregulatory Republicans called for closer scrutiny and oversight of the mortgage GSEs and the por-regulation Democrats (led by Barney Frank) worked to defeat the reform proposals.
Posted by: Sam Grove | Oct 21, 2008 4:21:39 PM
Sam,
I posted a comment in the Henderson entry, that didn't appear either. The comment count is increasing, but I don't see any of the new comments.
Posted by: Oil Shock | Oct 21, 2008 4:43:54 PM
I was really hoping for a principled defense of Card Check from one of the resident liberals ... both of whom have posted at least once well after my post hit the airwaves.
Oh, well. I really was trying to learn something. I was not being sarcastic.
-dk
Posted by: Dick King | Oct 21, 2008 4:52:46 PM
Since we're pointing out glitches in the Cafe, I'll add that I can't access the complete October 2008 archive, and could yesterday, either. I tried in Firefox and Explorer and the archive stops at the post, "Interview With Russ Roberts" on Oct 18.
Posted by: brotio | Oct 21, 2008 5:13:38 PM
I suggest that should be the case. Continuing the Hockey analogy would it be fair that competing countries in the Olympics got to play by their own rules. So the Russian team doesn't use off-sides but the U.S. does. So when they compete they are bound by different rules.
If you don't have a set of rules or there simply are no rules you will indeed have a race to the bottom with even greater exploitation then already occurs.
At what point between trading with fair rules, to trading with communist to trading with child laborers or slave laborers do you draw the line.
There needs to fair rules Don for without them there is not fair competition and freedom and liberty suffer as the dollar chases the least common denominator. ~ Muirgeo
Do not olympic teams (and in fact, all sporting teams) agree to play the same game using the same rules? The only time I have seen a sporting "game" with rules being bent is when watching an obvious show like the harlem Globetrotters versus anyone else. So your analogy fails. It fails when you consider that between parties (even when each party resides in a different poltical boundary) of a business transaction (commerce), the rules are established through contract.
Thanks for playing, Doctor. Run along now and let us simpletons ponder corrupt and pandering politicians while you perform brain surgery or whatever the heck it is you do. It must be nice working for a bureaucratic hospial like Kaiser where the billing is done in one centralized and massive department and everything just feels like you providing your services free of charge.
By the way, have you ever let your patients sit and wait because you were more concerned with finishing a comment/reply?
Posted by: LowcountryJoe | Oct 21, 2008 5:48:04 PM
Considering what "labor relations"(or should I say, unionbuster) firms have done, a secret ballot doesn't exist.
Set up a betting pool to determine support, intimidate those who lean towards the union, hire enough people who are 'no' voters to tilt the vote(or simply merging them into an inescapable minority ala Singleton on newspapers or Delta Airlines with their merger), along with other "quiet" forms of intimidation.
No wonder they want to skip to card check since it cuts unionbusting out of the process.
I'm a bit surprised they didnt do something to deal with vote dilution (via merger/mass hiring). With the secret ballot in government elections, is there a cutoff time for eligibility(read: registration)? Consider something that goes beyond "Do you work here?" that removes the ability to dilute on either side.
As for offshoring:
How about not threatening people with offshoring their work once in a while? Given the EFCA's aim to drop unionbusting from the picture, think of what an equivalent bill related to offshoring would
do.
Posted by: sethstorm | Oct 21, 2008 5:49:13 PM
If I owned a business and some of my workers wished to collectively bargain, I'd research the state laws and attempt to split the workers into to groups; those that want to collectively bargain and those who want to negotiate their own compensation. I'd probably agree to compensate the 'negotiate on their own' group with more equity options or performace related income that, depending on how well their goals were met, would potentially pay a greater amount out.
No one is entitled to a place to work. An employer extends an opportunity to come earn some money in exchange for labor services. Collective bargainers are somewhat hostile to the existing opportunities.. screw being in a union or dealing with one as you re an employer.
Posted by: LowcountryJoe | Oct 21, 2008 6:05:41 PM
Hey I was looking for a Lenin quote I thought you posted the other day. I can't find that. I thought it was describing the situation from his view just before the revolution... ?
My point was to be that he was describing a failed society based on unrestrained capitalism and you were asking..."sound familiar"... to which I wanted to reply... duh...YEAH!
You mean the first sentence of the Decree to nationalize all banks that Lenin drafted after he and his band of murderers overthrew the provisional government and in which he goes on to mandate slavery? Yeah. Here it is: "The critical food situation and the threat of famine caused by the profiteering and sabotage of the capitalists and officials, as well as by the general economic ruin, make it imperative to adopt extraordinary revolutionary measures to combat this evil."
Leaving aside the fact that you sound less coherent than Snoop Dog talking about economics, can you really be so stupid and ignorant that you actually believe that what Lenin was saying was true? I asked if it sounded familiar because it was a scare tactic used as the excuse to exercise the power to enslave and rob.
Russia had an agrarian economy and an autocratic ruler, idiot. The proletariat made up less than 1% of the Bolsheviks because the proletariat accounted for only something like 3% of the population. Russian crop yields never got high enough to free Russians from "the land" and allowed them to engage in very much other economic activity. It was so isolated and backward that it managed to pass into the 20th century untouched by any modernity of any kind - except that which was forced upon it by Peter the Great. The population both yearned for more liberty and wanted more paternalism from from the Czar and, because of the war, was starving.
Here's another quote from your hero, Lenin, to which I'm sure you'll take a shine to (Kulaks were peasants who owned their own farms).
Ruthless war on the kulaks! Death to them! Hatred and contempt for the parties which defend them-the Right Socialist-Revolutionaries, the Mensheviks, and today's Left Socialist-Revolutionaries! The workers must crush the revolts of the kulaks with an iron hand.. - V.I. Lenin, August 1918
Apparently, the Kulaks were opposed to Lenin and his band of thieves robbing them of their land. Go on, Muirdiot, boldly make a case rooted in your unassailable ignorance for why they should have been robbed of their land.
You never miss an opportunity to display what a useful idiot you are. Here's another chance.
Posted by: Methinks | Oct 21, 2008 6:07:07 PM
Sethstorm,
If you don't like your employer, why stay? Employment in this country is "at will". I don't have a problem with collective bargaining, mind. If a group of workers wants to bargain collectively, fine. But unions aren't satisfied with that. They want to force themselves on workers who don't want their representation. They want those workers to submit to their rules and to force them to pay dues for something those workers clearly see no value in. That's exploitation and coercion - the very thing unions accuse employers of merely because employers offer employment at a mutually agreed upon price.
The truth is, as Tarran so vividly described, unions are parasites which suck the life out of workers, so union bosses resort to force to cow workers who don't want to be extorted by them.
Posted by: Methinks | Oct 21, 2008 6:21:35 PM
FDR's policies prolonged the Great Depression - UCLA economists
Posted by: Oil Shock | Oct 21, 2008 7:19:29 PM
Employees Free Choice Act.
The lie is in the words.
Don,
As long as you keep giving it to them (money, love, trust, honor, respect, obedience, allegiance) even though it is an act of acquiesence, they will squander it.
Lysander Spooner (America's greatest legal scholar and essayist) has a lot to say on law and obedience to bad law. He is a worthwhile read.
We can love our country and our people, and still loathe our government.
http://www.chron.com/disp/story.mpl/business/6069493.html
Check out what the Houston Chronicle reported on people's reaction to honoring Milton Freidman.
You gonna change them and make it all better like we are educating muirduck?
Posted by: vidyohs | Oct 21, 2008 9:34:14 PM
Employees Free Choice Act.
The lie is in the words.
All you have to do is invert their proclamation at the top of their legislatery and you'll discover the real gist.
Department of Justice
Department of Defense
Social Security
There's a tavern near the San Francisco Justice Department named 'Inn Justice'.
Posted by: Sam Grove | Oct 22, 2008 1:39:48 AM
Philosophy of liberty simplified to 1st grade level, that even dyslogicals can comprehend
Posted by: Oil Shock | Oct 22, 2008 1:42:09 AM
muirgeo says:
"Well my guess is if he gets in and we start rewarding people for making things rather then pushing paper around..."
He being the Tabula Rasa...
There is no doubt that bureaucracy will increase as a greater percentage of government under the 'Enlightened One'.
Posted by: babinich | Oct 22, 2008 5:47:40 AM
"Philosophy of liberty simplified to 1st grade level, that even dyslogicals can comprehend
Posted by: Oil Shock | Oct 22, 2008 1:42:09 AM"
My computer went to the URL but nothing came up. Just a blank screen.
Posted by: vidyohs | Oct 22, 2008 6:07:47 AM
Go on, Muirdiot, boldly make a case rooted in your unassailable ignorance for why they should have been robbed of their land.
But we aren't fighting the last war. We're fighting the next one. The corporatists calling themselves "capitalists" won the last war decades ago, and we're still pretending to fight the "socialists" while Rome burns.
There was no "baby boom" before the Russian Revolution. The boomers don't care whether their rents are called "capitalist" or "socialist". The capitalists (people entitled to the rents now) don't care either. Ideologues in this forum care about these labels, but our choir is barely audible outside of this little sanctuary.
Posted by: Martin Brock | Oct 22, 2008 8:02:24 AM
If a competition does not reveal what is unfair and unequal between competing parties, then it was not a competition.
Which begs the question, what is a fair competition, stalemate?
I think not.
Equal does not exist in nature. Only in the laws of man can anything near equality be achieved, and when we try to use law to create an enforced equality in other things we guarantee stagnation. Stagnation is death.
Unions are the admission of the individual man that he is unwilling to expose himself to competition in the market place.
Like methinks said, "Go find another job" if job is all you can think.
I say better yet, "Start your own business and compete with the one you left."
Unions are the refuge of the weak and cowardly.
Posted by: vidyohs | Oct 22, 2008 9:19:09 AM
Coase made an interesting point that dovetails with Don's article; Coase wrote ( in his book "Essays on Economics and Economists" p. 73):
"[C]onsider the question of preventing fraud, for which government intervention is commonly advocated. It would be difficult to deny that newspsper articles and the speeches of politicians contain false and misleading statements; indeed, sometimes they seem to consist of little else. Government action to control false and misleading advertising is considered highly desirable. Yet a proposal to set up a Federal Press Commission or a Federal Political Commission modeled on the Federal Trade Commission would be dismissed out of hand."
Posted by: indiana jim | Oct 22, 2008 9:41:56 AM
Ironic:
OPEC conspires to keep the price of oil artificially high by manipulating production. This = Bad.
Trade unions conspire to keep the price of labor high by manipulating production. This = Good.
There is something flawed in that logic.
Posted by: Gary | Oct 22, 2008 10:09:08 AM
Here is the letter I sent to Professor Bruce Lincoln, U. of Chicago, blincoln@uchicago.edu, in regards to his protest of honoring Milton Freidman because his policies "have been shown to be a failure by the meltdown of the free market."
Dear Sir,
Thank you for confirming the existence of my theory of “Channel Intelligence”, which is just one of the various forms I have observed and cataloged. Channel Intelligence is accompanied by “Tape Deck Intelligence” and “Pond Scum Intelligence”.
Channel Intelligence is the condition that allows a person to become educated in a specific field (channel), a field in which he/she may reveal brilliance, innovation, and imagination, yet be so devoid of any knowledge outside that field so as to be functionally illiterate. In the channel the person may reign supreme, but out of the channel be dumb as dirt.
In your protest against Milton Freidman and his ideas you make the claim that the financial meltdown is attributable to the failure of the “free market”. You climbed out of your channel and made a fool of yourself.
Before claiming that a business sector is unregulated, I suggest you actually climb out of your channel and do some research into just how regulated business is and just how ignorant it is to talk about “unregulated free markets” in this nation. That creature does not exist and never has; and, as experience around the world has proven over and over, the more a government regulates markets the poorer they perform. Russia, the Soviet Union, Communist China, Chile, and Cuba became economic basket cases of poverty with total government control of the markets. England, France, Sweden, Holland, Belgium, Denmark, Germany, Argentina, and Brazil have all suffered decline and in some cases near communist style poverty because of their inability to see and use free markets. Thanks to Thatcher, England saw a bit of a turn around. Argentina and Brazil are turning around, but France, Sweden, Holland, Belgium, Denmark, and Germany are slowing choking to death on their socialism.
I am 67 years old and I lived through this with an open mind and an observing eye.
The financial sector of our economy, and the housing industry, just may be the most heavily regulated of all. The seeds of the failure began to be sown way back in the Civil Rights marches and protests of the 60s and 70s. Out of those came the claim by the blacks that banks and large merchants did not and would not open branches in the Black areas of cities and thus prevented Blacks from accessing services with the same convenience as had by White. One area in particular became a mantra of the Black “leaders” and that was that Blacks could not get loans for housing and autos with the same frequency as Whites.
Banks were simply doing prudent business with people known for defaulting, insufficient incomes, insufficient (if any) down payments, and a history of bad credit if any history at all. Banks are not charities. I know that may be a revelation to someone that would protest Milton Freidman and his ideas.
However, the pressure on banks and merchants from the government began back then and escalated into regulation requiring banks to knuckle under if they wanted to continue business. Along with this pressure to deal with deadbeats came the implicit promise that if the loans went bad then government would cover them. Government even got into the real estate business with the creation of Fannie Mae and Freddie Mac to ensure that deadbeats got loans.
Now anytime a farmer puts a new feed trough out for the pigs, all the pigs, not just the weaker ones, will eventually find their way to the new trough. That is what happened with the housing industry, soon it was no longer just Black deadbeats at the trough, it was deadbeats of all colors.
Though warned and warned repeatedly that government regulation and interference was making a crash inevitable, government simply put the pedal to metal and plunged headlong into the crash.
No politician is ever going to willingly admit to that kind of stupidity, since the majority of those politicians were liberals, the media, is still running interference for them by publishing their accusations that it was the “failure of the unregulated market” that caused the problems.
The sad part is that you are not alone in your Channel Intelligence, there are many of you; which explains why socialism still has such an appeal in America.
I suggest you pick up a copy of “The Post American World” by Fareed Zakaria, read it, and pay particular attention to his analysis of how liberalization of trade and markets is lifting nation after nation around the world upwards and out of grinding poverty. Then pay particular attention to how he assesses what communism and socialism has done to grind nations down into poverty.
The book is an excellent book and does not deal in economic matters exclusively. It does just show your protest against Freidman to be the foolish act it was.
Sincerely,
vidyohs
Posted by: vidyohs | Oct 22, 2008 10:19:27 AM
The corporatists calling themselves "capitalists" won the last war decades ago, and we're still pretending to fight the "socialists" while Rome burns.
Colourful language, Martin, but I don't know what you mean. Can you elaborate? You like to use definitions for common terminology which are unique to you, so I sometimes can't understand your arguments until you explain them in greater detail.
Posted by: Methinks | Oct 22, 2008 11:14:33 AM
The "too big to fail" institutions comprising the "systemically critical financial sector" constitute a "corporation" in this sense. They aren't lots of independent corporations. They're all one corporation. If they were independent corporations, they wouldn't be "systemically critical".
Posted by: Martin Brock | Oct 22, 2008 11:29:37 AM
Martin, I don't know what the baby boomers have to do with this (why specifically baby boomers?), but I don't see the functional difference between this war and that. I also think banks are "systemically critical" because government has mad it so, not for any natural reason. There are restrictions on who can offer what services and even who can and can't own a bank. Even if they banks were naturally interlinked by lending to one another to maintain adequate reserves and if institutions were also linked because they issued insurance to one another (CDS is a form of that), I doubt that there would have been as much risk floating around in the system if there were not promises from the government to backstop the industry via the Fed and Fan & Fred. If there is no backstop (i.e. the were not able to socialize losses), it's doubtful many banks would have made such imprudent loans because they would have adjusted their risk assessment to not include government backstops.
You can be as angry as you want at corporations for seeking rents. But it's like being angry about earmarks - as long as the federal government gives states money, it is the job of every state representative to get as much of it as they can for their own state. Likewise, as long as the government has the ability to create rents, corporations and special interest groups will seek them.
Theoretically, in a socialist society the means of production are owned collectively. In practice, it is impossible for a collective to run anything. Individual groups emerge, asserting the need for more subsidy. So, in practice, socialism and corporatism are very much alike. It's really the same war.
Posted by: Methinks | Oct 22, 2008 12:32:33 PM
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