Free Markets, Free People

Daily Archives: April 21, 2011

Election 2012–the shape of things to come?

Larry Sabato has released a first look at how things appear today in reference to the 2012 Presidential election.  As he says, it’s only use is to establish a “baseline” from which to watch the events and the trends over the next year plus before the election.




As it stands now, the electoral votes for the Safe, Likely and Leans numbers are 247 for Dems and 180 for Reps.  Note the toss up states (111 EVs).  They say a lot. 

Remove the leaners and you’re at 196 D and 170 R.  That, at least to me, is a much more likely place to start.  The leaners and tossup states are going to be the obvious places to watch.  Not including them leaves 172 EVs to be claimed.  You need 270 to be elected.

So … have fun and speculate away.


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NLRB to Boeing – build 787 in union state or we sue

It is a battle between a business’s best interests and about its fundamental right to make decisions about how it conducts its business and the government’s "right" to interfere and dictate how and where it will do its business.

In what may be the strongest signal yet of the new pro-labor orientation of the National Labor Relations Board under President Obama, the agency filed a complaint Wednesday seeking to force Boeing to bring an airplane production line back to its unionized facilities in Washington State instead of moving the work to a nonunion plant in South Carolina.

One of the reasons the South has thrived while the Rust Belt has, well, rusted, is companies have taken advantage of the “right to work” rules in most Southern states to locate there without fear of work stoppages at every turn.  That would seem to be a fundamental right that any business should enjoy, the right to locate their business where they feel their best interests are served.  What the government is saying is that’s not true – if you have union employees elsewhere.

In its complaint, the labor board said that Boeing’s decision to transfer a second production line for its new 787 Dreamliner passenger plane to South Carolina was motivated by an unlawful desire to retaliate against union workers for their past strikes in Washington and to discourage future strikes. The agency’s acting general counsel, Lafe Solomon, said it was illegal for companies to take actions in retaliation against workers for exercising the right to strike.

First, it’s not “retaliation” if the facts in the story are correct.  Boeing has hired 2,000 more employees – union employees – at the Washington state plant since the decision was made to add a second assembly line and do it in South Carolina.  So A) it’s not taking jobs away and B) the additional jobs since the decision hardly speak of “retaliation” in any sense a rational person would be able to discern.

Second, the “complaint” comes as the plant in South Carolina nears completion and 1,000 workers have been hired there. 

So, given those facts, this is a crap statement (that’s technical talk):

In a statement Wednesday, Mr. Solomon said: “A worker’s right to strike is a fundamental right guaranteed by the National Labor Relations Act. We also recognize the rights of employers to make business decisions based on their economic interests, but they must do so within the law.”

This is the usual duplicitous talk you get from this administration – acknowledge the right of the employer to make business decisions based on their economic decisions and then immediately deny what was just acknowledged.  This too is crap":

“Boeing’s decision to build a 787 assembly line in South Carolina sent a message that Boeing workers would suffer financial harm for exercising their collective bargaining rights,” said the union’s vice president, Rich Michalski.

No, they haven’t sent such a message.  What they’ve said is they have a backlog of orders and can’t afford (business interest) work stoppages every 3 years while unions negotiate a new contract. That is a legitimate concern.  And they want some sort of continuity built into the productions system that accounts for that probability.  No one is denying union workers their “rights” in Washington nor have any union employees been fired because of them – again, since the decision to locate in SC was made, 2,000 additional union employees have been hired there.

What’s is happening here is government has chosen to take sides and is attempting to intimidate Boeing.  The side it has picked – surprise – is the union side.  And it plans to use its power to attempt to force a company into doing something which is not in its best business interests, despite the lip service Solomon gives that “right”.  But there’s no “hostile business climate” here, is there?

Bottom line?

The company also said it had decided to expand in South Carolina in part to protect business continuity and to reduce the damage to its finances and reputation from future work stoppages.

And in a free country, Boeing would have every right to expect to be able to do that without interference.


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Tipping point? Not really, but …

While I’ll be the first to acknowledge that “government handouts” are bad and at a all time high, this is more of a sensational few paragraphs than real.  It speaks to the general confusion among the mass of American voters concerning what they do and don’t want cut when it comes to “entitlements”:

Households received $2.3 trillion in some kind of government support in 2010. That includes expanded unemployment benefits, as well as payments for Social Security, Medicare, Medicaid, and stimulus spending, among other things.

But that’s more than the $2.2 trillion households paid in taxes, an amount that has slumped largely due to the recession, according to an analysis by the Fiscal Times.

Also, an estimated 59% of the 308.7 million Americans in this country get at least one federal benefit, according to the Census Bureau, based on 2009 data. An estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; and 3.2 million get Veterans’ benefits.

And the handouts from the government have been growing. Government cash handouts account for a whopping 79% of household growth since 2007, even as household tax payments–for things like the income and payroll tax, among other taxes–have fallen by $312 billion.

That is a tough feeding trough to take away from voters.

Uh, we’re into a bit of apples and oranges territory here.  Most who have paid into them all their working lives do not see Social Security and Medicare as a “handout”.  Same with veterans who signed a contract and worked for relatively low wages for the benefits service in the military would bring.   They see SS and Medicare as a “paid benefit” and those going to veterans as an “earned benefit” or contractual obligation.

Medicaid, food stamps and housing subsidies, however, are handouts.   And the case can be made that so are “extended” unemployment benefits as well.

That said, the obvious problem doesn’t change – we’re paying out more than we take in by 100 billion dollars.  But we’ve been doing that for decades overall – thus the yearly deficit and the huge debt.

There are a number of ways to change that but in general they are:  A) cut spending,  B) raise taxes, C) a combination of both.

There are advocates for each of those courses of action.  Generally Republicans favor course A.   Democrats favor course B but would probably live with course C if the cuts weren’t too deep and the rich got nailed in the tax regime.

One of the reasons I support course A first is the amount in revenue we currently have coming in the door.  It is plenty.  It is also in the 19-21% of the GDP range which seems to be the historic range above which we collect taxes.  Regardless of the marginal tax rates, we never take in more in taxes than this range.  The reason, I would assume, is there’s a point at which those being taxed begin to take action to legally avoid taxation.   And in a capitalist system, there are those who studiously comb the tax regulations for loopholes and then sell them to those who have a growing tax liability.  Thus the historic percentage.   People are only willing to part with so much of their earned money to government.

That brings us to why course B is unpopular.   Most citizens of the US innately agree that government gets plenty of revenue.  And that means most also feel that the problem isn’t revenue, but instead profligate spending.  The reason that most are not open to new taxes is they feel government gets plenty now, but, more importantly, that it spends it for any number of things it has no business involving itself in.

So what’s the answer?

Course A first and foremost.  Show us (the citizenry) that you’re seriously committed to cutting spending and all that entails (trim government size, scope and reach).  Take action now to do what is necessary to put “entitlements” on a sustainable footing.  I think it is clear that their elimination is not something which is in the cards at this point, but there is much that can be done to make them viable.  And yes, that may mean privatizing portions of them.

Then and only then, when the citizenry is convinced government has been reduced to an appropriate size and all the spending that can be wrung from it has been wrung from it will they finally be open to the possibility of increasing revenue – but again, only if they see it as necessary.

I’m not sure why the left doesn’t get this.  Maybe it is just me, but this seems as clear as the nose on your face – it is spending which has gotten us in this mess, not “lower taxes”.  The fact that spending has outstripped revenue is not the fault of tax payers.  The fact that government is in areas never envisioned by the Constitution or founders is not the fault of the taxpayers.   The fact that Congress and various presidents have mortgaged the future of our republic and billed our grandchildren and their children is not the fault of the taxpayer.

So why must the taxpayer foot the bill?

That’s the ideological fight we face.  It has to be made clear that we’re not willing to give them more until there’s real and huge progress in reducing spending and with that a commensurate reduction in the size of government.

Without that, “no new taxes” is as valid an argument as any out there and Republicans shouldn’t cave on that principle regardless of the pressure to do so.


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