Free Markets, Free People

Economics

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The flight of the ‘greedy rich’

France’s prime minister, Jean-Marc Ayrault, is hopping mad. In response to the French socialist government’s plan to significantly increase taxes on "the rich"—including a proposed 75% tax on incomes above €1 million—rich people are moving out of the country. This is intolerable to Mr. Ayrault.

"Those who are seeking exile abroad are not those who are scared of becoming poor," the prime minister declared after unveiling sweeping anti-poverty measures to help those hit by the economic crisis.

These individuals are leaving "because they want to get even richer," he said. "We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity," he added.

It could be a scene right out of "Atlas Shrugged".

Mr. Ayrault is angry because rich Frenchmen are fleeing the country to keep their money, instead of handing it over to him. And he is joined by the baying of the other hounds in France’s left wing. Case in point, French actor Gerard Depardieu, whose announcement that he was moving to Belgium provoked responses such as:

Socialist MP Yann Galut called for the actor to be "stripped of his nationality" if he failed to pay his dues in his mother country, saying the law should be changed to enable such a punishment.

Benoît Hamon, the consumption minister, said the move amounted to giving France "the finger" and was "anti-patriotic".

In a stinging editorial, Libération, the left-leaning daily, called him a "drunken, obese petit-bourgeois reactionary".

They are owed this money, by God, and how dare you try and steal it away from them!

This is always the implicit argument of the Left: They have the first claim to your income, and you have a duty to honor that claim. No matter how you earned that money, they have the right to take as much of it as they please away from you, and if you dispute that right, you’re unpatriotic, and should be punished.

This is Leftism in a nutshell. You are not a free individual, but rather a serf of the state or some other politically-defined "larger community" that has an absolute claim on your property and income that you may not defy. This is no different in concept, or in practice, than the idea of ancient Babylon or Akkad that every subject is a slave of the king.

You can dress it up in high-sounding phrases like "solidarity" or "social justice", "helping the poor" all you want, and it still amounts to nothing but the simple declaration that the state owns you.

The people who believe in this idea are the enemies of freedom, and should be treated as such.

~
Dale Franks
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Failing California doubles down on solar power

You’d think, by now, governments would have figured out how poor they are at picking winners and losers.

Of course, they haven’t as witnessed by the witless California government continuing to push solar energy.

For example:

California’s Riverside County is producing more solar energy than anywhere in the U.S., with close to a dozen solar plants either online or proposed.

“On the face of it, it looks like a good deal. They talk about all these huge jobs and long-term benefits to the county. The truth is, it’s a very short term,” Riverside County Supervisor John Benoit said. “We’re going to be carrying the burden of having these types of facilities for decades to come, and because of the incentives that have been provided by federal and state government, there’s virtually nothing left for the county government or the local people to get benefit back after the small number of construction jobs are gone.”

Unlike Riverside’s 500 megawatt natural gas-fired facility, which pays $6 million a year in property taxes, a solar plant being built a few miles away will pay next to nothing, just $96,000.  When Riverside balked at its own upfront infrastructure costs and tried to impose an impact fee, the industry sued.

So Riverside has hundreds of square miles carpeted with solar panels and no jobs to speak of and barely any revenue to show for it.

But surely, as promised, this has led to cheap, reliable and renewable energy, right?

Yeah, not so much:

Solar also promised to be a cheap source of power, fueled by the sun. What the industry didn’t say is the technology only converts a fraction of the sun’s energy, and the intermittent nature of sunshine does not produce the power promised.

And Stanford economist Frank Wolak, a California energy expert, said solar could boost consumer energy bills up to 50 percent, a finding similar to the state Public Utilities Commission. Solar power from two recently approved plants range from $100 to $200 per megawatt hour, at least 8 times higher than the $16 consumers pay for natural gas.

“It’s probably 50 percent more (than coal or natural gas) today,” Benoit said. “Five years ago, it was probably a 100 or 150 percent more costly to generate a kilowatt with solar. The cost of these panels has come down dramatically. But still, getting back to the old equation, do you want to spend a little bit more to be green? And the legislature and the governor in California have said clearly, we’re going to do that.”

But at what cost to consumers and to what benefit to much of anything except government’s chosen crony, er, beneficiary?  Instead of allowing markets – i.e. consumers and producers – to decide on the mix, government has unilaterally taken that away from them and made the decision itself.

After all, the autocrat has decided:

Answering critics at a solar ribbon-cutting earlier this year, Gov. Jerry Brown laid down the gauntlet, affirming his commitment to solar energy and saying he would “crush” opponents of solar.

“There are going to be screw-ups. There are going to be bankruptcies. There’ll be indictments and there’ll be deaths. But we’re going to keep going – and nothing’s going to stop me,” Brown said.

I can believe that.  Somebody needs to tell Brown the whole effort is a ‘screw-up’.

But since government is involved, the crony gets the treatment other industries don’t:

“There’s been a policy to fast-track and install these utility-scale renewable energy installations that are on the scale of five to 10,000 acres each,” said April Sall of the Wildlands Conservancy. “We’ve seen thousands of acres of the desert bladed and now undergoing utility-style construction to basically convert that from pristine habitat that included those sensitive plants and animals, to becoming potentially a dust bowl.”

Now imagine if these actions and plans were those of “Big Oil”.  Yup, you don’t have to imagine long, do you?  But in this case?

The two largest green groups in the U.S., the Sierra Club and Natural Resources Defense Council, have remained silent on the impact of Big Solar on land use and endangered species, which is not so with gas, oil or coal. Sall and other local environmental groups say the Washington-based organizations see climate change as a bigger threat and therefore won’t get involved.

Shoddy “science” is their excuse and they’re sticking with it.

And that’s your update on the imperial blue state model today.  And yes, it’s going down the tubes which is why this cartoon applies to more than small business in the state:

~McQ


How does one oppose a “right to work?”

Well, if you’re wondering, just take a gander at what is happening in Michigan.

The Democrats will be the first to tell you “elections have consequences”, usually followed by ” … and Obama won”.  Well the same can be said of state level elections and in the case of MI, the GOP won.  In fact, they won everything at the state level, enough to pass “right to work” legislation which essentially says one doesn’t have to join a union to work.

The unions, of course, pitched a tantrum.

And, now that he’s solved all the nation’s problems, balanced the budget, reduced the deficit and has long-term debt on a downward trend, President Obama has weighed in on this situation:

“President Obama has long opposed so-called ‘right to work’ laws and he continues to oppose them now,” said White House spokesman Matt Lehrich. “The president believes our economy is stronger when workers get good wages and good benefits, and he opposes attempts to roll back their rights. Michigan — and its workers’ role in the revival of the US automobile industry -– is a prime example of how unions have helped build a strong middle class and a strong American economy.”

The union’s “role in the revival of the US automobile industry”?!

Is he kidding?  It is the unions which essentially helped make two of the big three financially unsustainable.  Remember, GM and Chrysler went bankrupt and had to be bailed out.  And the federal government screwed with the bankruptcy proceedings and handed  a large portion of GM to the union while stiffing bond holders.

That’s the “prime example” in reality.

And the president’s “belief” that our “economy is stronger when workers get good wages and good benefits” doesn’t mean those things only happen with unions.  Apparently, in right-to-work states, unions continue to lose out when they try to organize because workers are getting both good wage and benefits and seem happy with their situation.  What they don’t see is a benefit to unionizing – i.e. paying dues to a union which will be unlikely to do any better.

Finally, how is allowing someone to choose whether or not to join a union “rolling back rights?”

I knew Obama wouldn’t be able to stay out of state level politics, given his base and their demands.  The Democrats have become the party of unions.  Private unions are dying off and they’re getting pretty desperate.  First WI and now MI?  My goodness, can NY and IL be far behind?  How dare the GOP give workers the right to chose not to join a union as a prerequisite to working.  For a party that brags about being the party of choice, other than one particular choice they champion, the Democrats are pretty much opposed to all others.

Unions are the buggy whip of the latest evolution in labor.  Improved communications, a global economy and the realization that businesses have options as well have made unions an anachronism.  Reality and economics say labor is a commodity – a factor of production.  What labor is increasingly realizing is that the jobs they have can be exported or, given today’s technology, mechanized when costs exceed their worth.   Wages are leveling out and in today’s economy, the demands that were once commonly made by unions are no longer economically feasible.    But additionally, bad companies can no longer exist in the dark of a communications vacuum and pay and treat their workers poorly without there being repercussions.  Competition drives wages and benefits as well or better than unions ever did.

It’s a different world.  Unions are 19th century holdovers.

Time they shuffled off into Obsolete-land where they belong.

~McQ


Keystone XL: So now what will the excuse be to delay it?

You likely recall the controversy concerning the President’s denial of approval for the Keystone XL pipeline a few months back.  Citing the route through the state of Nebraska as a problem, Obama decided to defer a final decision until after the election.

Up for grabs – a lot of oil and 20,000 jobs.  Most saw approval as a no-brainer and the route through NE as easily “fixable”.   But Obama was having none of it, choosing to please his base vs. opting for jobs for Americans.  Since the disapproval, Canada, where the pipeline originates, has announced plans to sell that oil to China.

So, where are we now?

Well, there’s a new route through NE and local leaders have voiced strong support for the pipeline:

TransCanada has proposed a new route for the pipeline that avoids the Nebraska Sandhills, and the Nebraska Department of Environmental Quality is seeking comment before it drafts its report on the new route. Port-To-Plains Alliance, which is made up of more than 100 local elected officials and community leaders, has today offered its “strong support” for the Keystone XL Pipeline.

Their reasoning seems pretty strong — if you’re interested in putting Americans back to work and helping the economy:

Keystone XL will provide significant economic benefits for our region. The pipeline is expected to create approximately 20,000 manufacturing and construction jobs in the United States. It could also generate more than $5.2 billion in tax revenue to the Keystone XL corridor states. At a time when state and local governments across the country are struggling to balance their budgets, these employment and revenue benefits are critical to our region. Specific benefits for Nebraska include:

  • More than $465 million in new spending for the Nebraska economy
  • More than 7,500 person years of employment
  • Increased personal income by $314 million
  • Additional state and local tax revenues of more than $11 million
  • $390 million in increased Gross State Product

And that’s just Nebraska.  Other states stand to gain significant revenue as well.

Then there’s the issue of the Bakken Formation oil in Montana and  North Dakota.  It too needs the pipeline to be finished so it can efficiently ship oil from there to the coastal refineries.

Again, the major problem has apparently been solved.  It’s a move that would lessen our dependence on Venezuelan and Middle East oil (instead opting for supplies from a loyal and stable ally), would make the shipment of Bakken oil less costly, benefit state and Federal revenue (at a time when both entities are hurting for it) and, most importantly, create multi-thousands of jobs.

So, what excuse do you believe Obama will use to further delay or disapprove it this time?

~McQ


Mangling history leads to mangling culture

Very interesting read today by David Gordon in “Minding the Campus” (via Insty).  In his piece he talks about the subject of history being at present in the best of times and in the worst of times, to mangle Dickens.

What am I talking about?  Well, the blog in which Gordon’s article appears subs its title with “Reforming our Universities”.

Why is that important?  We’ve talked about it in the past.  It is where liberal America has set up shop for decades.  And the effect is never been stronger than now.   In fact, a lot of what you see as the changing attitudes in America can, I think – at least in part – be traced to academia.

Gordon notes its beginning:

This extraordinary bias began in the late 1960s with the anti-Vietnam war protests. Many participants, at least those who subsequently went into academia, have never gotten over it. Their fossilized views have made their own disciplines largely museums of dead ideologies. Another of the remarkable changes within the historical profession has been the growth of women’s history.  With only a negligible representation in 1975, almost 10% of all historians today identify themselves as historians of gender and women’s affairs.

What bias is Gordon talking about?  Well it’s a bias that he sees as “mangling history” to our detriment:

The evolution of the historical profession in the United States in the last fifty years provides much reason for celebration.  It provides even more reason for unhappiness and dread.  Never before has the profession seemed so intellectually vibrant.  An unprecedented amount of scholarship and teaching is being devoted to regions outside of the traditional American concentration on itself and Europe. New subjects of enquiry — gender, race and ethnicity — have developed.  Never have historians been so influenced by the methodology and contributions of other disciplines, from anthropology to sociology.

At the same time, never has the historical profession been so threatened.  Political correctness has both narrowed and distorted enquiry. Traditional fields demanding intellectual rigor, such as economic and intellectual history, are in decline.  Even worse, education about Western civilization and the Enlightenment, that font of American liberties, and the foundation of modern industrial, scientific and liberal world civilization, has come to be treated with increasing disdain at colleges and universities.

Now call me crazy, but you can see easily the effect of what Gordon is talking about today in the last election.  Increasingly students (and that includes further down the academic chain in high schools) know less and less about our history and traditions and more and more about, well, women’s studies, gender studies, things which have little bearing on economic and intellectual history – for instance:

The problem with this is that it has helped force out many other kinds of historical enquiry.  It is important to emphasize women’s role in society and in history. However, it is difficult to see how a feminist perspective could contribute very much to a purely economic history of the English industrial revolution (as opposed to its social consequences), or to a diplomatic history of Europe between the Napoleonic and the First World War. As a result, these kinds of studies are receiving ever less attention.

We all understand that women and minorities were mistreated.  Got it.  And we all know that was wrong, with 21st Century hindsight.  But what happened back when all that bad stuff was going on, in terms of economic and intellectual history, is still critically important today.

Instead history’s “new focus” has helped bolster both the “victimization” and “entitlement” mentality:

Worst of all, women’s history has contributed to the current holy trinity of race, gender and class that dominates the historical profession. Under normal circumstances, the tight focus on victimization would soon fade.  Since oppression studies explain so little, they soon become boring. But, as a part of a political chorus demanding ever-more extravagant entitlements for key voting groups, an essential part of the identity politics that is so destructive of national unity, the trinity is ensured a long life. Historians can grow tired of an intellectual movement.  Politicians of a useful political tool, never.

There is also something else beyond the fanciful and fraudulent political and academic rhetoric of “equal opportunity – affirmative action.” That is jobs. Key voting groups designated as oppressed have been hired preferentially in the academy, most especially in the social sciences, including history. To justify these preferences, historians of gender and race must keep emphasizing oppression. How otherwise can their privileges be justified?  Hence, the refiguring history to justify their positions in the professoriate.

We used to hear people laugh derisively when someone mentioned “political correctness”.   But what you’re reading here is an example of political correctness run amok.

And it’s effect?  Read James Taranto’s piece in the WSJ today.  It’s an incredible example of political correctness gone nuts. I’m talking about Emily Yoffe’s answer to an obviously absurdly insensitive question addressed to her.  However, her answer, among much of the left, is both appropriate and “correct”.  It’s what they believe.   It’s what they’ve been taught.

Will it get worse?  Well, Gordon seems to think it will:

A remarkable generational change is also coming. Most of the historians in the declining fields, economic, intellectual and diplomatic history, earned their degrees more than 30 years ago. At the same time, more than 50% of the new PhDs are now trained in women and gender history, in cultural history (a watered-down version of social history), in world and African-American history. This is going to make an extraordinary difference in what kind of scholarship will continue to be undertaken, and how the past will be taught. The history profession, seemingly innovative and robust, is in fact intellectually debilitated, and sadly reduced in scope.

If you think it is bad in the history department, you’ve seen what is going on in the science department (global warming climate change “science”).

Many have been hinting for years that the culture battle – the battle between individualism and freedom v. collectivism and entitlement-  is being lost in academia.  Gordon manages to put an exclamation point to the claim.  One of the reasons our population knows less and less about economic and our intellectual history is because it has been waylaid and replaced with “disciplines” which stress entitlement and victimization.

Is it then a surprise when more and more of the population view themselves and this country through those lenses?  And is it then any more surprising when they perceive government  - more and more government – as the answer?  Again, it’s what they’ve been taught.

~McQ


“Fiscal Cliff” negotiations with Democrats? Gimme the usual please …

When is the GOP (and the public) going to learn?

How many times have we heard that the only thing standing in the way of a grand bargain to reduce our growing national debt is Republican intransigence on taxes? If Republicans would only agree to dump Grover Norquist, Democrats will agree to cut spending and reform entitlements. Then, we can all join hands and sing Kumbaya as we usher in a new era of compromise and fiscal responsibility.

Except that now that Republicans have agreed to raise taxes, er, revenue, as part of an agreement to avoid the looming fiscal cliff, liberals appear to have decided that there really isn’t a need to cut spending after all.

Yup, in fact they’ve taken entitlement reform “off the table”.

Senate Democratic leaders signaled Tuesday they would not agree to any entitlement reforms before the end of the year that cut spending on Medicare and Medicaid beneficiaries.

They also said that any year-end deal to avoid the expiration of tax cuts and implementation of spending cuts — known as the fiscal cliff — must include a provision to raise the debt ceiling, which would otherwise have to be addressed early next year.

The White House and Reid have indicated they will not consider cuts to Social Security, a notable change from 2011, when President Obama said “everything is on the table,” including entitlement programs dear to his party’s base.

In other words, we’re back to “tax the rich”, raise the debt ceiling and spend, spend spend.  Meanwhile, it is left up to the GOP to “compromise” by breaking the tax pledge (led by the Judas goats, Saxby Chambliss and Lindsey Graham) or be forever branded as the intransigent “bad guys” in this.

Meanwhile, low information Americans who, by over 60% approve of taxing the rich, will buy the spin by the press painting the GOP as the cause/reason for the calamity while Democrats “lament” the problem (“but, hey, that’s now the law thanks to Republicans”) and gleefully rub their hands in delight at all the new revenue they’ll have to “redistribute”.

Some things never change, do they?

~McQ


So why are private unions in decline and government unions still strong?

If you haven’t figured it out yet, it has to do with competition in one area and none in the other.

How so?  James Taranto sums it up pretty nicely on the private union side of things:

The trouble for private-sector unions is that the global economy vastly increases the supply of labor, diminishing their bargaining power. If it’s too expensive to run a factory in the U.S., companies can simply move their facilities to other countries.

Or, labor isn’t worth what it once was thanks to globalization. We call that “economic reality”.  Back in the good old days for unions, they were getting wonderful pensions, outrageous benefits and $20 bucks an hour for a guy to open and close a blast furnace door.  Now they can make and ship steel across the Pacific Ocean and truck it to its destination in the US cheaper than we can make it.  Thus the shift of the industry from here.

The bonus for these companies?  No labor negotiation hassles, lower wages to pay (comparatively) and the option to move again if the costs again become onerous (and the steel industry has done that a couple of times).

However labor hasn’t yet allowed that lesson to sink in – well, at least unions haven’t.

Taranto points to a very recent example of the point as well as some union members who “get it”:

Last May, after contract negotiations stalled, nearly 800 IAM-represented employees walked off the job at Caterpillar’s hydraulic-parts factory. After a few weeks, more than 100 returned to work, fed up over the lack of progress in the talks and pinched by the union’s $150-a-week strike pay, some workers say.

When an agreement was reached in mid-August, the contract provided less than the one before it: The IAM gave in to an hourly pay freeze for veteran employees, an end to pensions, a doubling of health care premiums and a one-time ratification bonus of $3,100 instead of $5,000 under the previously proposed pact. The terms were almost identical to a Cat contract ratified by the UAW [United Auto Workers] a year earlier.

Doug Oberhelman, chairman and chief executive of the Peoria-based heavy-equipment maker, acknowledges that the givebacks hurt employees. But, in a recent speech in Chicago, he explained that management compared compensation to factory hands across Illinois and around the world and concluded that to be “market competitive,” Caterpillar had to insist on the concessions.

100 of the members of the International Association of Machinists apparently saw the handwriting on the wall, figured their family came first and returned to work.

So much for solidarity.

Hostess is another example of out of touch private sector unions.  When the Teamster’s union confronted Hostess over its claims it couldn’t afford their demands and giving into them would cause the company to have to liquidate, the Teamsters examined Hostess’s books and agreed.  They backed off.  Not the Baker’s union though.  Apparently their union chief never bothered to examine the books or negotiate.  He just advised his union to strike.  The result is well known and, by the way, the Teamsters were livid – not at Hostess, but at the Baker’s union.

Meanwhile a few facts have surfaced about the Baker’s union boss that should make members of unions everywhere recognize at least this guy for what he is:

BCTGM boss Frank Hurt encouraged the strike (knowing it could shut down the company).

As BCTGM membership has fallen 30% since 2000, Hurt’s salary has gone up nearly 45% to over $260,000

The bakery industry union pension fund is less than 50% funded ($10 billion in liabilities), yet bakery union bosses have their own fully-funded (100%) pension plan — funded by members.

Bakery union bosses Hurt and the Sec.-Treasurer both have their kids on union payroll.

We often hear complaints about CEOs who get pay raises while their companies go down the tubes.  I wonder if the left is willing to apply the same criticism to a guy who raises his own pay 45% while losing 30% of the membership and funds his own pension 100% while shorting the union member’s fund by over 50%?

Unions also tend to play at stupid games that simply frustrate people trying to run a business and make a profit.  In this case it is two different unions fighting about who gets to plug in and unplug refrigerated containers.

A federal judge has been forced to intervene in a dispute between two unions over who is in charge of plugging and unplugging refrigerated shipping containers at the Port of Portland.

Oregon district court judge Michael H. Simon ordered the International Longshore and Warehouse Union (ILWU) to abandon its efforts to snatch the responsibility of manning the outlets from the rival International Brotherhood of Electrical Workers (IBEW).

“[The ruling] simply means that the same people who have been doing the work since 1974 will continue to do it,” said IBEW spokesman Norman Malbin.

Absurd.

The ILWU’s reaction?  It said the contract with the electrical workers represented a “lost work opportunity” for members.  Of course it was a job they’d never had nor had when they tried to take it over.  But these are the sorts of things private unions are reduced too these days.  Stealing each other’s jobs.

As we’ve covered here, the great Wal-Mart walkout wasn’t a spontaneous event or even an event demanded by the workers of  Wal-Mart.  In fact, as mentioned, only 50 of 1.4 million Wal-Mart workers even walked out.

It was a union event using the front group “OUR Wal-Mart (Organization United for Respect at Wal-Mart)”, it was all set up by the United Food and Commercial Worker’s Union.   And if flopped, hideously.  In fact, the real reason the UFCWU tried to make this happen is because their stores are uncompetitive with Wal-Mart grocery stores.  If you can drive up salaries and benefits, you’ll eventually drive up prices.  You?  They couldn’t care less about you, Mr. and Ms. Consumer.

Those examples all deal with private unions.  Competition and the cost of labor are driving the reality of today’s wages.   Unions can’t deliver on the big promises anymore.  Many have not done a good job of managing their members benefits either.  Smart companies make it clear that they will willingly provide good wages and benefits without unions.  Tack on tough economic times and the need for a union becomes even less apparent.  At one point paying union dues was considered to be a positive thing.  Workers got something for the dues that they felt was greater than the cost of the dues.   Today?  More and more are seeing those same dues as a liability.

Finally, government unions.   They remain strong because there is no competition.  And, their bosses are in bed with them, negotiating with your money, not theirs.  Government’s don’t have to make a profit to stay in business, do they?

But perhaps even their act is wearing a little thin.  Take the LAX protests by the SEIU:

At LAX, although a large crowd of union members came out to protester, CBS LA notes that ”the majority of them [the protesters] were not airport workers.” They were other members of the SEIU.

So troubled were the airport workers by the Thanksgiving Day protest, the Associated Press reports that according to a press release from former union members, “a majority had signed petitions to leave the union and called upon the SEIU to cancel the demonstration.” One former union member Fred McNeill admitted to CBS LA that it had gotten “personal” for the leadership of the SEIU, “And that’s just not right.”

Another woman, who CBS LA interviewed through her car window at the airport, said she she was a union member (she did not specify which union she belonged to), but even she didn’t agree with the way the union was blocking traffic on one of the busiest travel days of the year.

Unions on both sides have become short-sighted and petulant because their golden age is demonstrably dead.  Economic reality and a changing world have dealt them severe blows and instead of looking at ways to shore up their base and maintain their presence, they’re reduced to throwing tantrums and thumbing their noses at the very people they need to suppor their cause.

Government unions can still get away with that.  Private unions can’t.   And the only reason that difference is made is because competition and economic reality rule one side and monopoly and government protection rule the other.

~McQ


To give is to waste?

My friend George Scoville wrote a Black Friday-appropriate post on a problem with gift-giving, which touches on a broader point that libertarians should heed.

A microeconomics paper that’s bounced around econ-blogs for several years says gift-giving causes a huge deadweight loss: when someone else picks a gift for you, it may not be what you would have bought for yourself when you would have bought it, which normally implies that goods and services are being distributed inefficiently.

If that’s true, then Christmas is a tremendously wasteful institution, within an order of magnitude of the income tax, and we’d be better off giving each other cash gifts.

Humbug!

First, on a technical note, that paper was written in 1993, before Amazon wish lists and social media made it easier to detect people’s interests and needs, so perhaps we’re getting better at matching gifts with recipients.

More importantly, the paper fell short of meaningfully capturing deadweight loss, because it focused entirely on the value of the goods.  Gift economies mostly operate on another kind of supply and demand: the desire for social cohesion, meaning closer relationships with family, friends, and other peers.

This is no trivial matter: relationships with people we can count on make us happier, healthier, and more successful.  Anything that helps to build and cement those bonds is valuable, and while some academics and marketers try to quantify that value (it may be more than you’d think), the normal rule is that relationships of trust should not be fungible with cash.  All societies have some social taboo against trading off the sacred and the mundane, which sometimes leads to absurdly stupid conclusions, but also allows people to build trust without worrying that anything intimate or of an extremely hard-to-price value (what’s the rest of your life worth?) will be easily sold for any of the mundane things that can be bought with cash.

It’s awkward when people give each other cash as gifts even if the amount is equal, and gift exchanges in which only one side puts any thought into it show unequal empathy.  If you put a lot of thought into anticipating someone’s wants, and that person gives you a very generic gift, it’s like being put in the Friend Zone.

The point of gifts is to trip a hardwire in the brains of social mammals: cycles of giving and gratitude that go beyond simple reciprocity.  When you’re trading cash, everyone is acutely aware of the value of what’s been exchanged, and there’s no fudge factor in the brain for “the thought that counts.”

That’s something we disagreeable, rationalistic libertarians should keep in mind, because the gift economy is a powerful force in human relations that resists and resents the intrusion of market forces, even if markets efficiently bring us the gifts.


Wal-Mart protest a flop

So how did the great Wal-Mart protest go?

According to the Bentonville-based company, roughly 50 people who are actually on Walmart’s payroll joined today’s “walkout” nationwide. The protest organizers say “hundreds” participated. Even if 1,000 took part, that’s still less than 1/10 of 1% of Walmart’s 1.4 million associates.

If you can’t find 50 disgruntled employees in an organization of 1.4 million, well, you’re a refugee from the real world.

But look at that last number.  1.4 million people have jobs because of Wal-Mart.  Then there’s the downstream effect – suppliers, etc.  My guess is you’re looking at an organization responsible or at least partially responsible for 3 to 5 million jobs in this country.

And yet it is under attack.

Now, there were protests at Wal-Mart stores.  But what should be clear is they weren’t protests by Wal-Mart’s vast majority of associates.

The “organization” which organized this flop,  “OUR Wal-Mart”,  is calling it a clear success.  I mean what else would they call it?  The fact that it only drew 50 employees in protest (50 who I assume are now ex-employees) seems to have been waived away for the fact that there were some protests.

Woo – hoo.

So who were the protesters?  You’ll enjoy this:

Seems strange then that, according to organizer OUR Walmart’s website, the group speaks for actual Walmart employees. In the “About Us” sectionof its website, this not-for-profit describes its mission as follows: “We envision a future in which our company treats us, the Associates of Walmart, with respect and dignity. We envision a world where we succeed in our careers, our company succeeds in business, our customers…” (Italics mine.)

OUR Walmart was listed as a subsidiary of the United Food and Commercial Workers Union (UFCWU) in a 2011 Department of Labor filing. While the union disputes that the two organizations are one and the same, one thing is certain: The organizers of today’s protest represent not Walmart employees, but employees of grocery stores that compete with Walmart.

Oh, I’m shocked, shocked I tell you.  Members from a union that represents the workers of stores that compete with Wal-Mart?  Ah, of course – OUR Wal-Mart.

[W]hile the anti-Walmart movement claims to be about helping Walmart employees get better health care, improved working conditions, higher pay–not to mention preventing our children from the temptation of petty thieveryit’s really primarily about stopping the threat of cheap groceries–the same ones that go a long way towards helping cash-strapped Americans put food on the table.

Emphasis mine … and the reason, as mentioned yesterday, is this model works.  It appears, at least superficially, that all but 50 Wal-Mart employees agree.  Given the consumer reaction to the protests (uh, nil, nada, zip – didn’t slow down sales a bit), it’s rather hard to understand how any sane person could call the protests a success.  But then no one said those who put together OUR Wal-Mart are sane, did they?

Not surprisingly, a union’s hand is found in a movement deceitfully claiming something that isn’t true and trying to cause problems for a company that employs a huge number of Americans and is responsible, at least partially, for the jobs of a huge number more.

And, watching these shenanigans, you can’t help but believe that unions are desperate – very desperate.  Here’s a company which is offering the same products as their union stores offer at significant discounts and that’s an obvious threat to their continued employment.  So they think nothing of starting a “movement” that is union backed and likely union financed to undermine that company by enticing workers, who apparently aren’t at all as disgruntled or as upset as this group has claimed, into a job action that’s guaranteed to be against their best interests and that would likely get them fired.

50 heeded the siren song and are likely now trying to figure out how to claim unemployment compensation.

And, they have the UFCWU and their apparent inability to think critically to thank for their folly.

Hey, maybe they can go apply at the union stores.  I’m sure they’re hiring, huh?  I’m equally sure they’re more than eager to hire someone who walked off their last job.

~McQ

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