Free Markets, Free People
Georgia city demonstrates the efficacy of the “public/private model” for efficient and debt free government
This is a pretty cool vid. Sandy Springs is right down the road from me and in a few short years since they’ve incorporated, they’ve literally become a model for how a city should (and can) be run:
Note the warning at the end as to who you can expect to see oppose anything like this in existing cities. This is where unions become a deterrent to good and efficient government, not an aid.
I’ve been busily reading everything I can about the Wisconsin situation as it stands right now. It has been an interesting exercise. Of course, one look at Memeorandum and you can instantly tell which ideological side a particular blog falls on. Also interesting are the titles of some of the stories/posts. Talk about sensationalist.
Of course, that’s not to say that we’re not hearing the same thing from some of the participants on the protests and demonstrations. Things like this:
“In 30 minutes, 18 state senators undid 50 years of civil rights in Wisconsin. Their disrespect for the people of Wisconsin and their rights is an outrage that will never be forgotten,” said Democratic Senate Minority Leader Mark Miller. “Tonight, 18 Senate Republicans conspired to take government away from the people.”
And where were the Democrats? In Illinois. BTW, it was actually a few weeks and 30 minutes as the Democrats were invited, nearly daily, to come back from their self-imposed exile and participate. A fact that James Joyner notes in his reply to the above quote:
Oh, nonsense. They were overwhelmingly elected in November and prevented from acting only by bad faith on the part of the Democratic minority. And the Democrats have the ability to either try to force Republicans out via the recall process or rally back to a majority in 2012 and undo this legislation.
That’s the process, isn’t it? Just as it appears that the majority of the country thought that the passage of the health care bill in Congress was a travesty and made the point on November 2nd of last year, now Wisconsin voters – who put the GOP into the majority – have a process they can use to reverse what has happened. But pretending that it was “disrespectful” to do what they did or a conspiracy to “take government away from the people” is, as Joyner notes, “nonsense”.
Apparently the move by the Republicans in the Senate was precipitated by two things as Christian Schneider at “The Corner” points out:
A letter Democrat Senate Minority Leader Mark Miller sent the governor today, indicating Miller’s unwillingness to further negotiate any details of the bill, was what prompted the GOP’s decision to take the bill to the floor.
“It was like, ‘I’m in the minority, and I’m going to dictate to you what your options are,’” said one GOP source about Miller’s letter. It was just three days ago that Miller had sent Fitzgerald a letter urging more negotiations, despite the fact that Governor Walker had been negotiating with at least two Democrat senators for nearly a week. “With his recent letter, it became clear that all he wanted to do was stall,” said the GOP source.
Another action that provoked the GOP senators to act was Democrat Senator Lena Taylor’s very public decision to have a spring election absentee ballot sent to her in Illinois. The spring election is scheduled for April 5th, which indicated Taylor’s desire to stay out of the state for another month. “That sure didn’t help,” said one GOP source.
Gov. Scott Walker has an Op/Ed in the WSJ that’s an interesting read. One of the points he raises is about what unions are claiming and how unions are actually acting:
The unions say they are ready to accept concessions, yet their actions speak louder than words. Over the past three weeks, local unions across the state have pursued contracts without new pension or health-insurance contributions. Their rhetoric does not match their record on this issue.
Of course it could be said that they are simply establishing their negotiating position. But my guess, given the outcry these past weeks, is that they feel they have the backing not to have to negotiate the cuts they previously said they were willing to make.
Since the bill has been passed the uproar will most likely continue for a couple of days or so, peak and subside. Outside forces have been attempting to finance and enable recall drives. Under WI law, a politician has to have been in office for a year before he or she can be recalled. Interestingly that applies to only 16 Senators, 8 GOP and 8 Democrats. Even more interesting is every one of them has a recall petition being initiated against them.
As I understand it, Walker won’t be eligible for recall until next year. Will the public still be motivated at that time to sign on or will it go the way of Indiana?
When Gov. Mitch Daniels repealed collective bargaining in Indiana six years ago, it helped government become more efficient and responsive. The average pay for Indiana state employees has actually increased, and high-performing employees are rewarded with pay increases or bonuses when they do something exceptional.
In fact, an oft neglected part of the story, which John Fund revealed recently, is why Walker and the GOP are taking the action they’re taking:
The governor’s move is in reaction to a 2009 law implemented by the then-Democratic legislature that expanded public unions’ collective-bargaining rights and lifted existing limits on teacher raises.
A state already headed for the financial shoals saw a Democratic legislature expand the “rights” of the unions that had help put them in office and lift the limits on pay for other government union members. I have it on good authority that the GOP Senators, when faced with this legislation, didn’t flee to Illinois.
Recalls aren’t easy things to do, and, we’ll see how they work out in Wisconsin. My guess is, after everyone has a chance to cool down a bit, the recall drives – for both sides – will meet with less and less success.
And, of course, depending on which side is most successful is making the case for their side, voters will either return Democrats to the majority in 2012 and see the bill repealed or the voters will decide what was done wasn’t such a bad thing (we’ll see how the budget deficit looks next year) and leave well enough alone.
We’ll monitor and report.
In this podcast, Bruce, Michael, and Dale discuss the demonstrations by public employee unions in Wisconsin, and the state of the economy.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.
Apparently “elections have consequences” only works when Democrats win. Otherwise the try to take their ball and go home – or to another state in the case of Wisconsin and now Indiana:
House Democrats are leaving the state rather than vote on anti-union legislation, The Indianapolis Star has learned.
A source said Democrats are headed to Illinois, though it was possible some also might go to Kentucky. They need to go to a state with a Democratic governor to avoid being taken into police custody and returned to Indiana.
I’m amazed at the number of people on the left, who were so happy to remind the right about the consequences of elections now support this sort of childish nonsense as a good response to the other side carrying out its agenda as they did theirs.
Today’s fight was triggered by Republicans pushing a bill that would bar unions and companies from negotiating a contract that requires non-union members to kick-in fees for representation. It’s become the latest in what is becoming a national fight over Republican attempts to eliminate or limit collective bargaining.
Imagine that – Republicans attempting to stop the extortion of fees required just to do a job contract. How freaking dictatorial is that! Why I imagine the mustachioed visage of the governor will show up on home made signs any second.
And, of course, there’s always a “Baghdad Bob” to be found to spin the unspinnable and somehow do it with a straight face. Rep Teri Austin (D- Anderson) told the Indiana House speaker that the missing Democrats “continue to be in caucus” and are discussing potential amendments to several bills. Additionally:
Austin told reporters that “it doesn’t matter where they (Democrats) are at this point. What matters is that they’re trying to figure out a way to save the state from this radical agenda.”
Asked if they were in the state, Austin said only: “They’re working hard.”
Uh, huh … with some in Illinois and some in Kentucky. Sure they are.
This isn’t the first time they’ve done this:
The last time a prolonged walk-out happened in the Indiana legislature was in the mid-1990s, when Republicans were in control and tried to draw new legislative district maps, eliminating a district that likely would have been a Democrat one, in the middle of the decade. Democrats won that standoff, staying away several days until Republicans dropped the plan.
How desperate are Democrats to protect their new constituency – public sector unions?
Yeah, this isn’t the 1990′s. Different era, different problem and, most likely, different outcome. Keep helping yourselves like this Democrats – please.
It’s a cold day in hell here as I favorably quote someone who I usually savage. And I have to revise my thoughts on the left not getting irony – apparently some do. Who am I taking about? Joe Klein. Yup that Joe Klein, TIME’s Joe Klein. He actually gets it:
Revolutions everywhere–in the middle east, in the middle west. But there is a difference: in the middle east, the protesters are marching for democracy; in the middle west, they’re protesting against it. I mean, Isn’t it, well, a bit ironic that the protesters in Madison, blocking the state senate chamber, are chanting "Freedom, Democracy, Union" while trying to prevent a vote? Isn’t it ironic that the Democratic Senators have fled the democratic process? Isn’t it interesting that some of those who–rightly–protest the assorted Republican efforts to stymie majority rule in the U.S. Senate are celebrating the Democratic efforts to stymie the same in the Wisconsin Senate?
An election was held in Wisconsin last November. The Republicans won. In a democracy, there are consequences to elections and no one, not even the public employees unions, are exempt from that.
I know … you’re wondering, “what did they do with the real Joe Klein”, but hey give the devil his due (keeping with the cold day in hell metaphor) – he’s exactly right.
The other Klein, the Ezra type, not so much.
Let’s be clear: Whatever fiscal problems Wisconsin is — or is not — facing at the moment, they’re not caused by labor unions.
That, sir, is irrelevant. Whatever “fiscal problems” are present need to be solved by having across the board spending cuts and that’s the point of requiring public service labor union members to pitch in a little more on their benefits. Essentially what Wisconsin is trying to do is put state employees on an even par with private employees in terms of benefits.
Here’s the bottom line of what is triggering these protests:
Besides limiting collective-bargaining rights for most workers—excepting police, firefighters and others involved in public safety—it would require government workers, who currently contribute little or nothing to their pensions, to contribute 5.8% of their pay to pensions, and pay at least 12.6% of health-care premiums, up from an average of 6%.
Wow. No more free lunch. Can’t imagine that, can you? You know, actually having to pitch in for your pension and health-care? Privately employed citizens have been doing that forever. So why are the public sector folks exempt? Well that’s the dirty little secret isn’t it?
Let’s go to Matt Welch for the answer:
We are witnessing the logical conclusion of the Democratic Party’s philosophy, and it is this: Your tax dollars exist to make public sector unions happy. When we run out of other people’s money to pay for those contracts and promises (most of which are negotiated outside of public view, often between union officials and the politicians that union officials helped elect), then we just need to raise taxes to cover a shortfall that is obviously Wall Street’s fault. Anyone who doesn’t agree is a bully, and might just bear an uncanny resemblance to Hitler.
There is Wisconsin in a nutshell – distilled as well as you’ll find it anywhere. These deals were mostly pay for play and the state’s taxpayers were sold down the river. I noted some months ago that the Democrats have become the party of public service unions instead of the party of the blue collar worker. They are dependent on the money and machine those powerful unions provide to stay in power.
And when that machine falters? Well, you get tantrums like this. Remember the union protesters in Illinois a few months ago clamoring for the governor there to raise taxes instead of cutting their benefits? Just like Ezra Klein they want to lay off the fiscal mess on others instead of recognizing its reality and understanding that the free ride has come to an end. It doesn’t matter if the unions had anything to do with the mess – the mess says everything is on the table. That’s the only way out of the mess.
But, this is Armageddon for the Democrats and their stakeholders. If states succeed in breaking the hold public service unions have on government, Democrats stand to lose substantial power. That explains why President Obama has entered the fray. While he wouldn’t back the protesters in Iran because it might be seen as meddling in the internal affairs of the state, he has no qualms whatsoever of meddling in the internal affairs of the state of Wisconsin. Apparently elections only have consequences when he wins.
What has the unions so terrified of the Walker plan? Well here’s the plan:
His plan allows workers to quit their union without losing their job. He requires unions to demonstrate their support through an annual secret-ballot vote. He also ends the unfair taxpayer subsidy to union fundraising: The state and local government would stop collecting union dues with their payroll systems.
Under that plan, union membership would be an actual choice instead of a mandated requirement to hold a job. Horror of horrors. How dare a governor advance something which actually enhances freedom (choice = freedom) – why that makes him a dictator, of course and akin to Hitler.
Make no mistake, these protests in Madison aren’t about democracy, freedom or liberty. They’re about the left’s power and something they love to project on the right and Wall Street – selfishness. The protests are a collective tantrum from adolescents who refuse to acknowledge that their special-interest Candyland no longer exists and while it did, it existed on the back of the tax payers who were made to unwillingly subsidizing their way of life.
This is the wrong fight, in the wrong place at the wrong time, and Democrats are on the wrong side. Public sector unions are not popular and despite Ezra Klein’s denial, are held responsible for some of the fiscal problems the states face (like pensions):
A new poll from the Washington-based Clarus Group asked:
Do you think government employees should be represented by labor unions that bargain for higher pay, benefits and pensions … or do you think government employees should not be represented by labor unions?
A full 64% of the respondents said "no."
That includes 42% of Democrats, and an overwhelming majority of Republicans. Only 49% of Democrats think public workers should be in unions at all.
So, as you watch these “protests” keep them in context. They’re an astroturfed attempt, orchestrated from the highest office in the land, to keep the power current structure in place that underpins the political power of the Democrats. This isn’t about rights or liberty or freedom, this is about power and money. And it has finally unmasked the left in this country and revealed what it is really all about.
Kevin Drum has a blog post up at MoJo in which he supports a claim by Tim Lee that American Liberalism “has incorporated libertarian critiques at a striking rate over the past few decades”. The claim is that is true especially in the area of economic policy. For instance:
Income tax rates are way down. Numerous industries have been deregulated. Most price controls have been abandoned. Competitive labor markets have steadily displaced top-down collective bargaining. Trade has been steadily liberalized.
I guess that can all be categorized as “it depends on your perspective”. While personal income taxes are down in comparison with where liberals would prefer them to be – especially for the rich – corporate taxes remain the highest in the free world. And, speaking of economics and libertarians, we at least understand who ends up paying corporate taxes – and it ain’t corporations.
This is major blind spot of the liberal side of the house. If they admit that corporate taxes are passed along to consumers, then their basis for taxing in such a regressive manner would be questioned. So they continue to pretend that by demanding higher and higher corporate taxes, they’re somehow calling for equity in income distribution – assuming government will take the money collected from corporations as taxes and parcel it out to those who need it most. And further assuming that’s a function of government.
Of course what they end up doing is having corporations take money from those who must have their products but can least afford the cost of the increase driven by the taxation. “Benevolent government” then takes the money, after it takes its cut, and passes it back to the “most deserving”, or the “most in need”. Corporations then, are a tax collection entity, not a tax paying entity.
What happens when corporate taxes are raised is it has an adverse effect on the corporation’s consumer base. If they get high enough, that base begins looking for less costly alternatives or quits buying altogether.
All that to set up this next Drum statement:
The problem is that a system that generates enormous income inequality also generates enormous power inequality — and if corporations and the rich are allowed to amass huge amounts of economic power, they’ll always use that power to keep their own tax rates low. It’s nearly impossible to create a high-tax/high-service state if your starting point is a near oligarchy where the rich control the levers of political power.
You could most likely spend all day on those two sentences. Completely left out, of course, is who is paying income taxes. What we all know is somewhere around 50% of us aren’t. So when we see discussions about taxes we have to keep that in mind. More importantly – and after all the talk of having much in common with libertarianism – check out what Drum’s ideal is: “a high-tax/high-service state”.
Obviously the libertarian camp would find nothing to agree with there.
Essentially Drum’s argument is that we, as a nation, have the right to demand such a state. But while the “corporations and rich” own the “levers of political power” we’ll never achieve it. Solution? Implied: take those levers away from them. Method? Well all of this has been a prelude to the real reason for the post:
I am, fundamentally, old fashioned about this stuff: I think of the world as largely a set of competing power centers. Economics matters, but power matters at least as much, and I think that students of political economy these days spend way too much time on the economy This explains, for example, why I regret the demise of private sector labor unions. It’s not because I don’t recognize their many pathologies, or even the fact that sometimes they stand in the way of economic efficiency. I’m all in favor of trying to regulate the worst aspects of this. But large corporations have their pathologies too, and those pathologies are far worse because there’s no longer any effective countervailing power to fight them. Unions used to provide that power. Today nobody does.
This is the common cry of the liberal today. The need for a “countervailing power” to fight the power of corporations – real or imagined. Weapon of choice? Unions. But the power that unions fight against has nothing to do with the supposed problem with corporations that Drum has outlined. Taxes. Name a single union that has, in any time in the past, rallied and protested to get their corporation’s taxes raised? They understand what such an increase could mean to labor. As for power, unions are more concerned with the internal power of a corporation as it relates to wages and benefits. It is only recently, with the addition of union PACs, that the union movement has begun to address corporate political power.
And if I had to guess, that’s what Drum secretly laments. As private sector unions decline, so does any “countervailing” political power he thinks unions could wield. Of course, it doesn’t help when they act like this . Unions are and have been the liberal left’s power center in their war against corporations for centuries. If you don’t believe that, you just need to review recent elections and their pattern of donations:
The UAW has considerable clout in the Democratic party. In the 2010 election cycle, the union spent $10.1 million through its political action committee, according to the Center for Responsive Politics. That was down from $13.1 million in the 2008 election.
The center said that 100 percent of the union’s 2010 federal donations — $1.4 million — went to Democrats. The funds come from voluntary contributions by members and retirees.
That’s the real impact of the “demise of private unions”. It is also why those like Drum support any effort that makes organizing easier for unions today.
So when Tim Lee writes that "Competitive labor markets have steadily displaced top-down collective bargaining," I just have to shake my head. Competitive for whom? For the upper middle class, labor markets are fairly competitive, but then, they always have been. They never needed collective bargaining to begin with. For everyone else, though, employers have been steadily gaining at their expense for decades. Your average middle class worker has very little real bargaining power anymore, and this isn’t due to chance or to fundamental changes in the economy. (You can organize the service sector just as effectively as the manufacturing sector as long as the law gives you the power to organize effectively in the first place.) Rather, it’s due to a long series of deliberate policy choices that we’ve made over the past 40 years.
But here’s the bottom line: if there were indeed a crying need for unionization felt by the “average middle class worker”, the ability to join a union (or form one) still exists. The problem is, it’s mostly fair and thus doesn’t favor the union as previous organizing laws did. However, if the organizing drive meets the criteria outlined in labor law,bingo, a union is born and members are able to cash in on the supposed benefits of such a relationship.
The problem, however, is fewer and fewer people apparently see any advantage in such a relationship anymore, if declining membership is any indication. Like anything else in the world, the consumer of a product has to convince themselves that the product’s benefit justifies its price. It seems that is no longer the case when it comes to private unions. Drum prefers to blame the demise on “policy”. I see it as the consumer saying, “no thanks” after the price/benefit comparison is made. The fact is policy or law doesn’t prohibit the formation of unions. Only votes do. And for quite some time, the votes – of those they would unionize – haven’t favored private union organizers.
It’s worth noting, by the way, that corporations and the rich know this perfectly well, even if lots of liberals have forgotten it. They know exactly what the biggest threat to their wealth is, and it’s not high tax rates. This is why the steady erosion of labor rights has been, by far, their single biggest obsession since the end of World War II. Not taxes, unions. If, right now, you were to offer corporations and the rich a choice between (a) passage of EFCA or (b) a return to Clinton-era tax rates on high incomes, they wouldn’t even blink. If you put a gun to their head and they had to choose between one or the other, they’d pay the higher taxes without a peep. That’s because, on the level of raw power, they know how the world works.
Of course he’s right, but not necessarily for the reasons he believes. Unions have grown into an impediment. A costly impediment to competitiveness. Whether anyone likes to admit it or not, labor is a commodity. Despite the emotional arguments of the left concerning labor and “real people”, people who want to work aren’t owed a job or a certain level of compensation. They have to be worth it to earn it.
So yes, corporations are more concerned about unions than taxes, at least to the point that passing along increased taxes starts costing them customers. Then they pay more attention to taxes. And if taxes do start to cost them customers? Where is the easiest commodity for a corporation to cut in order to maintain a competitive price as it collects the increased taxes? Yes – labor.
Without apparently realizing, the liberal left’s call for increasing corporate taxes dramatically for their “high tax/high services” state is a call for more unemployment. Unions would attempt thwart the ability for corporations to adjust headcount to remain competitive. Result? The US steel industry redux.
Is that really what the liberal left wants? I can pretty much guarantee it isn’t what any libertarian would want. But perhaps it is the fact they don’t even realize how it all works (and what they’re really wishing for) that’s the most dangerous aspect of all of this.
The answer, partially, is unions. While the talent of a Broadway show may cost a pretty penny, many of the "aspiring" among them most likely aren’t making as much as the stagehands.
At Avery Fisher Hall and Alice Tully Hall in Lincoln Center, the average stagehand salary and benefits package is $290,000 a year.
To repeat, that is the average compensation of all the workers who move musicians’ chairs into place and hang lights, not the pay of the top five.
Across the plaza at the Metropolitan Opera, a spokesman said stagehands rarely broke into the top-five category. But a couple of years ago, one did. The props master, James Blumenfeld, got $334,000 at that time, including some vacation back pay.
Now I’m not one to begrudge high salaries, if they’ve been earned. And I’ll be the first to tell you that any CEO who earns a bonus when his or her company has a down year shouldn’t get one. However, that’s really not the point here. These are wages (the top paid stagehand at Carnegie Hall makes $422,599 a year in salary and $107,445 in benefits and deferred compensation) driven by unions. The first figure mentioned is the average salary at Lincoln Center. If I were a lefty, this would probably fall under the "corporate greed" category. The jobs are neither highly skilled nor technical. But they’re locked down and belong to only one entity – the union. The pay is at that level for one simple reason – power and the willingness to use it, even when it really isn’t necessary. And that power engenders fear:
How to account for all this munificence? The power of a union, Local 1 of the International Alliance of Theatrical Stage Employees. "Power," as in the capacity and willingness to close most Broadway theaters for 19 days two years ago when agreement on a new contract could not be reached.
Wakin reported that this power was palpable in the nervousness of theater administrators and performers who were asked to comment on the salary figures.
Kelly Hall-Tompkins, for one, said, "The last thing I want to do is upset the people at Carnegie Hall. I’d like to have a lifelong relationship with them." She is a violinist who recently presented a recital in Weill Hall, one of the smaller performance spaces in the building.
She said she begrudged the stagehands nothing: "Musicians should be so lucky to have a strong union like that."
Right – and musicians would be playing to empty venues if they did since the cost of their entertainment would be beyond what most wage earners can afford. Instead musicians exist in a much more competitive world where their earnings are tied to their talent. Ms. Hall-Tomkins, for one, would prefer the IATSE model, I’m sure.
But you’ll also notice that she, and apparently others, were afraid to comment on the story for fear of ruffling union feathers.
Unions had a place once – and I’ll even say that their existence today can be a good thing if they represent their members properly, that is make sure they’re paid a competitive wage and benefits as well as being treated fairly. However, in many cases, like that above, they end up demanding exorbitant salaries and benefits only because they can.
Where are the Bernie Sanders of the world yelling “when is enough enough”? As long as the theater owners, administrators and artists refuse to speak out about those sorts of salaries and benefits that drive up ticket prices, the union will continue to push. And some stagehands will earn more than the President of the United States (although I think our current President is more suited for the roll of stagehand than his present job).
In the world of leftist “fairness”, this would seem a prime target for those who like to go after CEOs and “greedy corporations”. But expect not a peep about this union, public sector unions or any union for that matter. After all, while they may be as “greedy” as any corporation the left could name, they’re “family” and thus exempt from such criticism.
The short answer, of course, is it is a monstrous
bill law those effected by it are just beginning to understand. And maybe it’s just me but when you begin to grant waivers to the law, a) you’re playing special interest politics (it applies to the little people but not the politically well connected) and b) the law is obviously flawed.
One of the more recognizable business names included on the newly-expanded list of waivers issued by the feds is that of Waffle House, which received a waiver on November 23 for health coverage that covers 3,947 enrollees.
Another familiar name was that of Universal Orlando, which runs a variety of very popular resorts in the Orlando, Florida area. Universal was given a waiver for plans that cover 668 workers. These waivers deal with limited health benefit plans, sometimes referred to as "mini-med" policies, which companies as large as McDonald’s use for some its employees. The plan have limits on how much can be paid out in coverage, limits which would be phased out under the new health reform law.
The feds though have granted waivers from that law, amid concern that certain groups would drop their health insurance programs entirely. Those waivers are good for one year, and can be considered for renewal.
That final line is important because, of course, it gives the government leverage to push for changes in coverage within the companies it has to this point exempted. If not, it simply lets the exemption expire. But that doesn’t change the fact that the only the politically connected to this point have been exempted. Instead of admitting the problem with the law and issuing a blanket exemption to all businesses that are effected like the favored few, the administration prefers to do “favors” for those that apply.
Among those so favored to this point are – surprise – a number of unions:
Several weeks ago, critics singled out a number of unions which had received government approval for exemptions from certain provisions of the law dealing with annual medical spending limit requirements.
And there are more unions who have received waivers in this latest batch, like the Bricklayers Local 1 of MD, VA and DC, the United Food and Commercial Workers Union in Mount Laurel, New Jersey, the Indiana Teamsters Health Benefits Fund, Service Employees International Union Local 1 Cleveland Welfare Fund, and more are listed.
This, of course, is a result of poorly written legislation that wasn’t debated, vetted or carefully considered. It is a mish-mash of liberal wishes and desires bundled in a huge and unread document and shoved through the legislative process in a most underhanded way. The fallout has been gradual but building as more and more companies get into the nitty-gritty of what this will mean to them. And the waiver apps are flying. Since mid-November, the waivers granted has doubled from 111 to 222. And there’s no reason to believe that’s going to slow down as the implementation dates near.
It is also another in a long line of reasons the business climate in this country remains unsettled. The fact that a company gets a waiver doesn’t mean that within a year the administration will decide it must comply. I’m sure these businesses have already calculated the cost to them of such a demand. Would you do any major hiring or expansion with that hanging over your head?
Yeah, neither would I.
Charles Lane hits at least part of the Democrats problem with voters right on the head.
Public sector unions are not just the base of the party — they’re the base of the base.
But in an era of increasing discontent over taxes, government spending and the perks of government employees, these are not necessarily the allies you want to have. A party that depends on the public employees to get elected will have trouble reaching out to the wider electorate — i.e., the people who pay the taxes that support public employee salaries and pensions.
Bingo. The supposed strength of the Democratic party was its support of the common man – the blue collar worker. The middle class family. I’ve always thought such a characterization was nonsense, however, that was the narrative they successfully embedded for years.
That is now visibly changing. And I think it is apparent that the new narrative isn’t a particularly good one politically speaking. They’re now the party of big government and government unions. In an era of financial difficulty that’s not exactly the constituency you want to be identified with – especially when it is becoming common knowledge that government workers now earn more than private sector employees doing comparable jobs.
And that’s especially true now that the woefully underfunded public pension plans are coming to light and Democrats are casting around for a solution to include considering ideas such as using 401(k) funds to rescue them.
This new constituency is not a particularly popular one and even more damaging is they’re a very visible one. Think of all the incidents that reflect badly on government unions which have involved the SEIU lately.
When the majority of the country is oriented toward smaller government, less spending and less intrusion, working to satisfy a constituency whose entire existence demands precisely the opposite approach is not the best place to be at election time.
Here’s a formula for you to study:
Green groups want less forestry in the developing world. Industry wants green protectionism to cut the volume of competitive imports. Unions want green protectionism to stop imports to ensure they can keep workers in high-paying jobs.
So using the environment as an excuse, we have these three groups colluding to further their own agendas. Call it “green protectionism”.
In a recent case it has been to keep toilet paper made in foreign countries out of Australia.
That’s right, toilet paper.
Can anyone now figure, based on that formula, what the missing part of the equation might be? The part that is necessary to make such collusion pay off?
Yes, government. Certainly green groups can want less forestry in the developing world, and industry can wish for a way to cut the volume of competitive imports. And unions always hope to ensure high paying jobs.
But only one entity can actually make all those wishes, wants and hopes come true. If government becomes involved it has the power to fulfill the wishes and hopes of these three disparate special interest groups.
That’s what happened in 2008 when two Australian toilet paper manufacturers, Kimberly Clark Australia and SCA Hygiene as well as the Construction Forestry, Mining and Energy Union (CFMEU) and the World Wildlife Fund essentially colluded to keep foreign manufactured toilet paper, primarily from Indonesia and China out of the country. Their ostensible complaint was those countries were “dumping” their product in Australia.
For a short time they succeeded in getting imports restricted by the Australian Customs Service, until, it seems, the ACS did a study to determine the validity of the complaint. Their findings were significant. The Australian Customs Service report calculated that the potential downward pressure of imports could be as high as 42 percent of the price.
In other words, the collusion would cost consumers in Australia 42% more because the competitive pressure that kept prices low would have been removed. In addition, a recent report commissioned by the Australian government found that “illegally logged material” – one of the prime reasons these groups claimed Australia should ban imports of foreign wood products – only comprised 0.32 percent of the materials coming into Australia. In other words, the threat was insignificant.
That’s Australia, but what about here? Well, we’re hearing the same sorts of rumblings concerning “green protectionism”.
Sadly these campaigns appear to be part of a spreading green protectionist disease, where industry, unions and green groups work together. In the United States the disease was brought to life by the Lacey Act, which imposes extra regulation on imported wood and wood products to certify their origin and make them less competitive.
The Lacey Act is actually an update of a 1900 law that banned the import of illegally caught wildlife. It now includes wood products (2008). And that means, since extra steps and cost are incurred by foreign manufacturers, that consumers are stuck with the increased cost.
While the reasons for protectionism may sound good on the surface – save the forests, higher wages, less competition to ensure jobs – it isn’t a good thing. If freedom is defined by the variety of choices, what protectionism does is limit those choices and impose an unofficial tax on consumers. They end up paying the cost of collusive action between government and special interests.
So, each time your government announces that it is doing you the favor of limiting the imports of this commodity or that, based on “green” concerns, hold on to your wallet. Whatever the government is protecting you from, you can rest assured that the price of the domestic variety is headed up, since the other product of government intrusion is limiting competition. Rule of thumb: restricting free trade is rarely a good thing. And the only entity that can do so is government. “Green” is just the newest color in an old and costly game – protectionism.