Waging war on public sector unionized employees last year, with Governors Walker, Kasich and LePage leading the charge, lawmakers are now gearing up to take on private sector employees in this year’s sessions in legislatures in states across this country. Indiana is in the forefront of the war against workers’ rights with its governor, Daniels, set to introduce legislation into a Republican-led legislature that will make Indiana a “right to work” state. Right to work states have enacted laws that do not require union membership of employees working in union shops, therefore allowing free-riders to enjoy all the benefits of being a member without having to pay dues.
However, with this year’s Super Bowl being played in Indianapolis, a high-profile union in the form of the NFL Players’ Association has issued a statement weighing in on subject.
“Right-to-work is a political ploy designed to destroy basic workers’ rights. It’s not about jobs or rights, and it’s the wrong priority for Indiana.”
The statement also notes that as union members, players aren’t alone; they are joined by employees working the concession stands and everyone else that brings the games to their fans. Making note of teamwork, how right to work laws will decrease the average income of working families in Indiana by approximately $1,500 and urging Indiana legislators to reject the measure.
Right to work states were predominantly in the South and West but as Republicans have gained control of legislatures and governors’ mansions in traditional “Rust Belt” states, there has been a steady eastward and northward drive to circumvent what was once protected under the National Labor Relations Act. The Wagner Act, as it was first known when passed in 1935, ensured protections for union organizing with union security being one of its main tenets once employees had chosen to organize.
In 1947, the Taft-Hartley Act was passed by Congress, over the veto of President Harry Truman with the president calling it a “slave labor” act. A year later, Truman campaigned against a “do nothing congress” and won re-election in a landslide. However, the act gave states the right to impose a right to work status on workers and many did just that.
Just this week, the Republican-controlled house in Indiana passed a work to right to work bill through its Employment, Labor and Pensions Committee by a vote of 8-5 in what was called a “charade” vote by state Rep. David Bartlett after a five minute hearing where no amendments were allowed and no discussion heard. Fellow Democratic state Rep. Clyde Kersey stated, “I think the light of democracy just went out in the Indiana House,” after the vote was taken. A vote to pass the measure in full can be taken as quickly as later this week.
A few things known about right to work states is that on average, workers make $5,333 less a year than in non-right to work states. Workers are still protected from paying union dues if they conflict with their beliefs and workers are better protected in states where there are protections in place for workers. The only ones benefitting from a right to work statute are employers, not workers. Employers will save money from this law, not the other way around. In states where a right to work law was enacted, such as Oklahoma, where job creation was touted, no such job creation took place and manufacturing jobs have actually been lost.
This cynical and broad-based attack on workers’ rights from Republicans and chambers’ of commerce benefits no one and in the long run will hurt the economy of Indiana as workers have less and less to spend with lower wages. Now is not the time to be decreasing the earning and spending power of the local workforces.
Thanks for this, Thom. Nice to see the NFLPA actually acting like a real union.
It is no coincidence that if one were to make a Venn diagram of the 20 or so states with ‘right-to-work’ laws, and the 20 states with the highest rates of poverty and inequality in the U.S., the diagram would look an awful lot like a perfect circle. What does this tell us? It tells us that Jim Hightower was right when he said: “money is like manure. You’ve got to spread it around, in order for it to grow anything.”
Mark Santow – Shame on you for parroting completely false union propaganda. I took 15 minutes out of my day to prove you wrong:
Right to Work States Income Inequality(1=highest) Poverty Rate by Household (1=highest)
1. Alabama (2nd) (4th)
2. Arizona (20th) (9th)
3. Arkansas (32nd) (6th)
4. Florida (15th) (32nd)
5. Georgia (31st) (14th)
6. Idaho (48th) (39th)
7. Iowa (39th) (29th)
8. Kansas (28th) (20th)
9. Louisiana (18th) (2nd)
10. Mississippi (3rd) (1st)
11. Nebraska (44th) (41st)
12. Nevada (35th) (34th)
13. North Carolina (21st) (17th)
14. North Dakota (36th) (31st)
15. Oklahoma (17th) (7th)
16. South Carolina (29th) (10th)
17. South Dakota (34th) (25th)
18. Tennessee (5th) (11th)
19. Texas (9th) (5th)
20. Utah (50th) (44th)
21. Virginia (11th) (43rd)
22. Wyoming (43rd) (33rd)
www.pbs.org/now/shows/415/states-income-inequality.html#here
Your assertion about income inequality holds true for only 11 out of 22 right-to-work states (50%).
Your assertion about the poverty rate holds true for only 12 out of 22 right-to work states (54.5%).
“Perfect circle” indeed. Do progressives actually believe the nonsense that gets circulated by the unions here?
If you want to really see a striking correlation, look at per capita public debt by state compared with “forced union” states.
RTW,
Tone down the rhetoric. Present your facts and make your case, but drop the hostility (even though I admit it is hard to do).
Brian – I apologize. It just consistently agitates me how Big Labor uses these blogs to spread their completely fabricated “statistics” and progressives won’t take them to task, even though anybody with a calculator and 15 minutes can get to the truth of the matter. I’ll do my best to keep it factual in the future, as I believe doing so tends to be more persuasive, but I will point out that this is a political blog so some rhetoric and the occasional outrage is to be expected.
RTW: It is safe to assume that everyone who is going to be engaging in online political dialogue is pretty committed to what they believe in. And they will more than likely hold a belief that everyone that disagrees with them is an ill-informed buffoon that needs to be disabused of their false beliefs. This is actually the *wrong* way to approach discussions and is typically why online political discussions devolve into screaming matches so often.
And while I’ll probably get some flak from my lefty friends for saying this, I think listening to the legitimate concerns that other people have is actually a good thing. So, we’re going to try something different here from now on at RI Future. Discuss, present facts, be firm in your beliefs, but don’t devolve to childish behavior. We’ll see if it works!
Glad to have you aboard.
RightToWork: I of course appreciate your comments, and thank you for taking the article (and my comment) seriously enough to actually do a little digging. As Brian notes above, our desire on this blog is to have real discussion and debate, within the ‘left,’ and across ideological and partisan boundaries.
Of course, some level of civility is needed. Since I am an American historian, not a representative of ‘Big Labor’ (an odd term, in this day and age, with union density in the private sector below 10%) — nor am I a ‘parrot’ — I can do without the snarky tone. We are all grown ups here.
Your apology is well taken, and I thank you for it. You make good arguments, so let’s keep it going.
While the overlap of state poverty rates and right-to-work laws is obviously not 100% (sorry for the hyperbole in my earlier comment), I do think the fact that 9 of the 11 states with the highest poverty rates (according to your stats above) have right-to-work laws is hardly a coincidence. My instinct in my earlier comment, while excessive in its specifics, was nonetheless still essentially correct (had I picked the number 10 instead of 20, in other words). It should also be pointed out that the annual wage of the average worker in right-to-work states is approximately $5500 less than it is in the other states. That worker is also less likely to have access to health care through work, and to have to pay for more of it when they do.
Correlation, of course, is not causation. It is possible that other factors may explain the fact that 9 of the 11 states with high poverty rates have right-to-work laws. The fact that all 9 of the high poverty right-to-work states have long histories of racial Jim Crow, only recently dissolved, for example, might explain the correlation. Indeed, as a historian, I can confidently say that it does explain it.
But I think this makes my point, not yours. Indeed, the push for right-to-work laws generally originated in the South, and that push was an integral part of the effort of white Jim Crow authorities to maintain control over a heavily black labor force, both at work and at the ballot box. Taft-Hartley was passed in 1947, in the midst of the CIO’s Operation Dixie, which threatened to undermine the Jim Crow system. The vast majority of southern states enacted right-to-work laws in the late 40s and early 50s — precisely the years in which Operation Dixie took place.
The presumption was that right-to-work laws would weaken (if not eliminate) unions, and that weakened unions would weaken black workers (as blacks, and as workers). It was also presumed (correctly) that they would keep wages down, possibly enabling Southern states to continue to draw industrial production from New England and the Midwest (which turned out to be true).
We have decades of research, both domestic and international, that tells us that countries (and states) with higher rates of union density tend to have higher wages, even for non-union jobs. I assume that whatever your position on the right-to-work issue, you will concede this point? While there may be legitimate arguments in favor of right-to-work-laws (civil liberties, perhaps), I don’t think anyone disputes the fact that there is a correlation between unions and wages.
Recent research (asr.sagepub.com/content/76/4/513.abstract), summarized by Steven Greenhouse in the NY Times (economix.blogs.nytimes.com/2011/08/04/labors-decline-and-wage-inequality/?scp=3&sq=labor&st=cse), also indicates that the decline in union density in the US was a major cause of the increase in income inequality over the past 4 decades — responsible for as much as 1/3 of it.
There is of course even more research (most famously, by Richard Wilkinson and Kate Pickett) on the deleterious effects of income inequality on such things as social capital, crime, infant mortality, obesity, and ‘happiness.’
The hyperbole of my short comment was perhaps excessive, but it expressed in just a few sentences a larger argument: unions lead to higher wages for all workers, where union densities are high. The absence of unions keeps wages low, for all workers. Right-to-work laws are specifically designed to keep union density low. Ergo, right-to-work laws are likely to keep wages low. For most institutional advocates of these laws, that is precisely the point of them. And of course, they are low-hanging fruit for state Republican Parties trying to kick the organizational legs out from under the Democrats.
All of this is not to say, of course, that unions are always and everywhere a good thing. It is to say, rather, that a century or so of evidence from here and abroad makes it pretty clear that unions are good for workers, particularly in areas where union densities are high — and that employers and (since the Progressive Era) Republicans are likely to oppose them.
“While the overlap of state poverty rates and right-to-work laws is obviously not 100% (sorry for the hyperbole in my earlier comment), I do think the fact that 9 of the 11 states with the highest poverty rates (according to your stats above) have right-to-work laws is hardly a coincidence. My instinct in my earlier comment, while excessive in its specifics, was nonetheless still essentially correct (had I picked the number 10 instead of 20, in other words). It should also be pointed out that the annual wage of the average worker in right-to-work states is approximately $5500 less than it is in the other states. That worker is also less likely to have access to health care through work, and to have to pay for more of it when they do.”
Perhaps historians are not as familiar with statistical methodology as scientific researchers, but the simple fact that you are resorting to bizarrely-qualified statements like “9 out of 11″ is evidence of cherry-picking the data and confirmation bias. This is what we call a “red flag.”
A proper analysis does not cut off the data set at the number that most effectively bolsters the starting hypothesis, which can lend support to any conclusion depending on where the set is arbitrarily separated. You made a statement about right-to-work states as a set, meaning all of them, so I analyzed all of them and demonstrated that there is no significant correlation to the povery rate and income inequality rankings that you originally asserted without any proof at all (I call this “propaganda”). The right-to-work state data points you chose to ignore in your revised analysis matter; in fact, they change the result entirely. Your comment was not “essentially correct.” It made a highly specific assertion about the effects of right-to-work legislation, and that assertion was false.
We are arguing over the larger point of whether right-to-work laws tend to impoverish the populations of the states that have them, are we not? Rather than the arbitrary number of ’20 states’ that I tossed out in my initial comment?
Let’s review.
You listed the 22 states with right-to-work laws. Alongside, you listed where they ranked, in terms of poverty rates. Of those 22, 12 ranked among the 20 poorest states.
Of the 11 poorest states in the country, 9 have right-to-work laws. That is simply a fact, drawn from your own data. And it is a fact that is pertinent to what we are really discussing here.
12 of the 20 poorest states in the country have right-to-work laws, with 2/3 of those right-to-work states concentrated in the bottom half (the poorest) part of the group (again, drawn from your own data).
If the vast majority (8) of the bottom 10 states with regard to poverty are right-to-work states, and if the majority of the 20 poorest states in the country have right-to-work laws, it is not unreasonable to at least offer a few thoughts on why this might be — whether there is a correlation here, something that needs to be explained. Given the rest of my argument (that unions raise wages, and that right-to-work laws are in part designed to reduce union membership), I hardly think my comment was unreasonable.
Again, might I ask that you actually engage my argument, and try to do so in a tone that doesn’t assume that someone who sees things differently from you is a fool? I’m willing to give this one more try, if you are.
We always accuse pro athletes of acting as if they live in a different dimension than the rest of it (face it, many are in the 1 percent). Maybe NFL players needed to be in a high-stakes labor conflict themselves facing the loss of their livelihoods to realize that there but for the grace of God…
It’s good to see them finally gaining a greater awareness of the world around them – they encounter enough people in the service economy that maybe it finally rubbed off.
Mark Santow – I do not think that you are a fool. What I do think is that you have a substantial bias in favor of what we right-to-work proponents call “forced union” legislation, and it is significantly driving and affecting your analysis, intentional or not. I have a bias as well, precisely for the individual liberty reasons you identified earlier, but I acknowledge my bias and am extra cautious when proceeding because of it.
You are carving up the data turkey all sorts of different ways. Depending on the size and type of the cuts, it is possible to obtain a data set that is combosed of 99% predominantly dark meat pieces or 99% predominantly light meat pieces. What I am saying is that if you look at the data set as a whole, there is no substantial correlation, much less causation established, between right-to-work and income inequality or various other things that are far too complex in economic, political, and geographical reality to definitively reduce to any one cause. Even one counterexample, like right-to-work Virginia, where I live, which was ranked the #1 state for business last year and holds very high education and household income rankings, can confound all of your analysis because it doesn’t fit your preconceived model and you can’t explain why. Or maybe you can, ex post, through some sort of historical narrative, of which I would be doubly cautious.
In the same paragraph, you say “look at the data set as a whole” and in the next sentence introduce data not included in the entire discussion. The latter calls out high levels of education in VA. Those education levels are almost certainly impacted by VA’s proximity to, you know, that wretched hirer of college grads, the federal government. And a vast proportion of those workers are, shall we say, “high-end union” members. (You’re a data wonk, so you know the densities; you know where all those degrees reside and where they work. If it’s VA, it’s McLean, not Blacksburg!)
And VA’s high ranking for business is almost certainly impacted by your former Governor and current Democratic Chairman Tim Kaine and his pro-IT approach enabled by current US Chief-Information officer Vivek Kundra (who is teh awesome).
So there’s that…
Here’s what’s missing from this discussion. It treats unions as a monolithic entity.
I live in RI, where – I have to admit – there are unions that enjoyed at one time an excessive largesse from the power possessing individuals. But those unions in no way represent the norm. And they have taken their medicine along with the rest of us.
And they couldn’t be farther from the vanguard, where the real action is.
The vanguard is what these RTW laws are about, and is at the bottom of the pay scale, the bottom of the economy. Janitors, hospitality and retail workers are routinely abused. I know for a fact that the trade term for restaurant workers is “the burn-and-churn”. The idea of investing in a product to improve their working conditions was, literally, laughable for these managers.
If you don’t know what a “split shift” is, RTW, I defy you to work a single week of them, much less a year or two. Also, if you don’t know what a split shift is, you really have no business in a discussion about unions and right to work laws.
All right-to-work legislation does (assuming no add-ons from state legislatures) is prohibit employees from being forced to join or financially support a union organization against their will. I sincerely hope that everyone here besides hardline union leadership can agree that, absent some sort of extra justification for closing shops, this is a *good thing* in itself. So the strong presumption is in favor of freedom of contract, freedom of association, and other individual liberties protected by right-to-work.
Now let’s look at what that extra justification might be. Feel free to add to this list, but the only three justifications I have heard (and I’ve spent a lot of time listening) are as follows:
1. “Right-to-work doesn’t just prohibit unions from moving in and taking over, it also prevents business owners from voluntarily closing their shops, so it violates their property rights and should be opposed on that ground.”
As humorous as I find the idea of progressives defending closed-shop legislation by supporting the “property rights” of business owners, this objection is technically correct. By technically, I mean that it is a true statement on its face, but the number of business owners who would actually *want* a union to move in and all of its employees to be forced to join is so miniscule that it is basically a nonissue. Having said that, from a philosophical standpoint, I agree that these provisions should be kept out of the legislation and business owners should be allowed to reach voluntary arrangements with unions if they want to do so. The vast majority will not.
2. “Right-to-work allows ‘free riders’ to enjoy the benefits of unions without having to join and support them.”
This argument is far more tenuous. There are different types of “benefits” we can talk about. It is false that non-union members can “enjoy all the benefits of being a member without having to pay dues,” as the blog article author stated. Circuit courts have consistently held that unions can “deprioritize” cases involving non-members, and I shouldn’t have to tell anyone here that unions despise nonmembers in right-to-work states and would generally rather chew glass than represent them. You’d often be better throwing your complaint in the shredder than handing it to a hostile union to handle on your behalf. It’s true that nonmembers might enjoy some tangential benefits that can be influenced by unions, like a safer workplace, but this is a rather silly objection because unions would, or at least should, support those initiatives anyway, and it’s not like their members are losing anything there. You could make the tangential benefits argument for any advocacy organization – should people be forced by law to support the ACLU? NRA? Of course not.
3. “Unions benefit workers in aggregate, but workers often don’t know what’s good for themselves, so they need to be corrected by a central authority.”
This is a very “progressive” argument in that it relies on a basic tenet of progressive ideology that can be summarized as the ends justifying the means. I don’t support any aspect of this reasoning. I reject that progressive “policy experts” know what is better for workers than the workers themselves. I reject that government is in the best position to come up with aggregate economic solutions to perceived problems without running a significant risk of causing at least as many problems as it aims to solve. I reject the underlying philosophy of the ends justifying the means, especially where coercion is involved. And I reject that there are not very legitimate reasons for individuals choosing not to join or support unions.
Ask yourselves this: right to work doesn’t prevent anyone from joining a union voluntarily, so why do unions have such a problem recruiting and retaining voluntary membership that they need to lobby government to step in and mandate participation by law? Unions have a lot of major problems. Very often they have corruption problems (lots of cash flow without the risk of going out of business), overpay their leadership, contribute to a hostile environment between management and employees, overcharge employees through dues, hold talented employees back from reaching their potential while supporting workers who deserve to be fired, make businesses unprofitable, increase tax burdens, make professionals look bad in the media, and other legitimate issues. They also have a long and sordid history with organized crime.
The union in my workplace suffers from all of the above and more, and I made the very informed decision not to join – thank goodness for right-to-work. I need union representation like I need a hole in the head – our management is phenomenal and very generous with us. I could hire an excellent attorney to represent me for what the union charges in dues. Why should I not be allowed to make that decision for myself? Because some progressive “policy expert” thinks it would benefit me?
I also think the issue is a little more complicated than the “everyone deserves a living wage” slogan that gets tossed around here. At a minimum, I don’t think people deserve a living wage added with all of the social program and safety net benefits already in place. From an economics-oriented perspective, job wages should generally be set by relative scarcity and supply and demand. It’s not immediately obvious that somebody “should” be able to live comfortably on something like waitering alone. Legislating that into reality could create all sorts of distortions and counterproductive incentives that could have unknown effects throughout the economy. In other words, there are some jobs that we rationally want to be unattractive to people whose talents could be better used elsewhere. My frequent objection is that the progressive analysis ends far too early and these kinds of concerns should be recognized.
Small off-topic correction here:
The Frymaster wrote: “… current US Chief-Information officer Vivek Kundra (who is teh awesome).”
My former boss was in fact completely awesome (except that he kept me up at night writing draft after draft of various things, and is a very meticulous editor) — but he retired August of last year. There will be no more lofty speeches about cloud computing coming from the Office of E-Gov and IT for a little while at least — Vivek was the one driving all of that.
—>”At a minimum, I don’t think people deserve a living wage added with all of the social program and safety net benefits already in place. From an economics-oriented perspective, job wages should generally be set by relative scarcity and supply and demand. It’s not immediately obvious that somebody “should” be able to live comfortably on something like waitering alone.”<—
And to think that we on the left view those on the right as heartless and dehumanized!
Frymaster – It’s not so much about being heartless or being compassionate as it is about the limitations of human knowledge and recognizing that this kind of central economic planning is a tempting but typically counterproductive endeavor. As the saying goes, the road to hell is paved with good intentions. Putting aside the much-debated issue of who was ultimately to blame, the progressive idea that every family deserved to own a home did not end so well in 2008. Similarly, the Federal Stafford Loan program hasn’t achieved the progressive vision of equal access to higher education – quite the opposite. Tuition rates have tripled in two decades as colleges carved out that resulting consumer surplus, and the average college student now graduates with $30,000 in debt and minimal job prospects.
It is a simple matter to say that a waitress “deserves” a livable salary without supplemental income, but a thoughtful economist will ask the harder questions. If government interferes with the market in this way, will more be incentivized to enter the field? Will more be incentivized not to enter others? What will happen to the industry? Prices? Opportunity cost? Like the two examples above, do not expect it to end well.
At the bare minimum, if the goal is simply to raise average wages, it should be accomplished in the least roundabout and attenuated way possible with minimal bureaucracy and possibility of abuse. Granting unions special powers and privileges to accomplish that is one of the worst means of accomplishing that goal from a pure economics perspective. As much as I hate saying it, it would be better to simply write checks.
I’m sorry, but I fail to see any level of humanity whatsoever in your reply.
Am I to take it, then, that your answer to my question above is, “No. I have no idea what a split shift is much less have I ever done anything in a restaurant beyond ordering food.”
Frymaster – I expected more from you than a string of logical fallacies and appeals to emotion. I honestly thought you’d jump at the chance to discuss the ramifications of these public policy issues you love talking about so much.
To answer your question, I worked retail and construction through high school and college. Then I put myself through law school through a combination of loans and substitute teaching. I do know what a split shift is (it’s exactly what it sounds like), but I have not worked one. If you truly want to disqualify people from the public discourse for such arbitrary and contrived reasons, you will quickly find yourself debating alone. Maybe that’s what you want.
Why do you get to determine the scope of discussion? Why is emotion out of bounds? Public policy that doesn’t deal with humans as humans is, well, inhuman. Your cold logic may comfort you, but it alienates me.
That said, I do like to go on, don’t I?
I’m walking up to the liquor store, so we can be as logical as you please in a nonce…
So, just because an economist thinks something or says something, that doesn’t mean it’s true. And the real ‘problem’ with economics as a practice and as a basis for public policy is that it is a poor description of reality.
In particular, the binary approach of logic – this happens, so that can’t happen – distorts reality in a dangerous way in the public policy discussion. Humans are many contradictory things all at once. There is not “a way” that people act or react in a certain situation. When you talk about being “incentived”, you really mean “motivated to act”, and the motivations are guaranteed to be widely varied across a large population.
So let’s get real. The Dismal Science is a part of the discussion, but not all of it.
Next, let’s define what it takes to be successful as basically having two parts: planning and execution. So I offer you Eisenhower’s famous quip (more-or-less): in battle, plans are useless, but planning is indispensable.
In reality, this statement about planning isn’t about plans or planning. It’s about execution. That is, to succeed in execution, you need to have a great plan that you immediately throw out the window because events don’t go anything like you expected.
That, my friend, is the human condition. We do the best we can, and it’s useless. To succeed, says the former President, you need to take what you learned from making your plan and apply it – in real time – to an continuously changing environment.
So with public policy, most programs never have a chance to succeed. The sausage-making that is the legislative process often lets opponents – that is, the GOP or BD Dems – hobble what could otherwise be fairly successful programs.
Only sometimes, programs do change, and sometimes for the worse. After the break, I’ll take a look at a something you call out as a “progressive idea” that didn’t end well, and I’ll show you how egregiously wrong that connection is. Are you in real estate?
Where you, RTW, assert that the progressive idea that “every family deserves to own a home” precipitated the global economic collapse in 2008, that’s wrong eight ways from Sunday.
The progressive idea is that poverty is an historic negative on human civilization and that homelessness in the US is a national shame. Housing is a basic requirement. I’m not going to bicker over rights vs. needs vs. whatever. If you lack the basic instinct for species preservation and improvement, I doubt there’s anything I could say to change that. No man is an island, etc., etc., it tolls for thee.
As to first time home-buyer programs and FNMA and whatever the hell Freddie’s acronym is, that’s a complex story of a more-or-less successful program that got turned into a casino. Most people think of the siblings as government entities, but full faith and credit went away in the 1990s. As quasi-privates, the gamblers got their hooks in and went to work. That there was, after a decade or whatever, such a thing as “liar’s loans” (that we, the people, once again own at an enormous loss the proceeds (short side) of which are in private hands) only goes to show how incredibly far from their original intent those entities were taken.
They didn’t go there because of progressives. They got taken there by banksters – and all real investors and traders (or at least the ones I know) use the casino terminology and fully accept the scumminess of what they do. But the really, really bad stuff is in the derivatives, which themselves have been perverted from their original purpose – to hedge against risk. Like any powerful tool used “in the dumbness”, derivatives used as a profit machine are inherently dangerous and going to blow up. Widely used, derivatives are bubble machines.
But, there, we’re back to that nastiness of “market realities”. So sorry.
Really, the weakness in your approach is Righty’s age old problem – the argument is thin and brittle, built on preposterous ultimata and a flattened, black-and-white palette that turns a complex, colorful world into a Family Circus cartoon. The housing market is a big, complicated thing with lots of parts. All of the worst possibilities came to be. Fannie and Freddie got “busted out”; you’re blaming the victim.
Frymaster – I’m not sure if you realize the extent to which many of your statements perfectly align with Austrian-school economics and libertarian thought. What you are really objecting to is not “economics” as a field, but rather the neoclassical school of economics specifically, which has dominated the academic field and come to rely heavily on hardcore econometrics, data extrapolation, and market forecasting over the last few decades. Libertarian/Austrian economists are deeply skeptical of this kind of applied economics just as you are, and for many of the same reasons. The economy is far too complex to reduce trillions of individual transactions and motivations to neat little graphs, data sets, and canons.
Where I think you switch rails is with your idealistic notion that centrally planned economic programs *could* be successful if all of your “opponents” would simply stop frustrating them. In this way, it’s a bit like the perennial Marxist claim that communism *could* succeed if the capitalists and other traitorous forces would only give them a chance. The Austrian economists – Hayek, von Mises, Schumpeter, etc. – point out that central economic planning is not only unlikely to succeed due to human forces but inherently flawed, precisely because of your point that knowledge is dispersed and motivations varied. Attempting to aggregate knowledge and make decisions through a central enlightened authority is actually the most inefficient means of accomplishing these societal goals you have because it is fundamentally incapable of making use of the vast information network and local decision making processes that markets provide.
Bonus points:
1) 9 out of 11 (or 8 out of 10, which was my take-away), isn’t any kind of cherry-picking. 80% on a statistical average of 46-ish % is, you know, almost double. An index of 180 something. That’s something I’d notice. It’s not even “directional” data. That is some actionable $h1t.
2) You, calling out policy experts for telling you what’s good for you… lolz. Have you read your own writing? And I get it. Who the hell am I to be calling the kettle the gander?!? But, seriously, come down here with us humans. We’re not so bad.
Do I realize there’s this thing called the Austrian School? Fresh-water economics? Never heard of it…
See, this is the thing with economics. Because an analysis is good doesn’t mean the actionable conclusions are good.
Instead of the Austrian School, let’s talk about Marx, shall we, widely recognized as the greatest economist of his generation. In Marx, we get three parts: an analysis, a prediction and a prescription.
As to the first two parts, I’d just, I don’t know, open a newspaper or something and I’d have to give him SCOREBOARD. I’ve actually described my politics thus: I’m a socialist who’s trying to prevent capitalists from turning everybody into Marxists.
It’s not a debate. It’s quod est freaking demonstratum. The cold, hard reality of capital markets is that, at best, they are stupid. At worst, they are evil. If, as is claimed and I would concur, markets are efficiency engines, then their natural end state is a monopoly. And in market after market, we see that absent government intervention, monopolies would have occurred.
Marx’s prescription is, in my reading, unrealistic as a dominant structure. But at small scale, it’s teh awesome. If you don’t know about what’s possible with worker co-ops, you’re not up to speed. Mondragon is a giant beast of awesome that spun out of a trade school in Spain.
So the radical capitalist prescription offered by you trout-fishers is just as destructive as Marx’s was at dominant scale. (See above under open a newspaper.) At small scale, there’s obviously a lot of value in ideas of letting things be free to develop under their own value. But the idea that everything everywhere should be hands-off is freaking nuts. Not for nothin’, but actual casinos are the most closely regulated, monitored and adjudicated markets in the history of markets. It’s just common sense to treat gamblers like gamblers.
It is insane to try to manage a super-complicated civilization with an overly-simplistic structure. It just don’t fit! We need complex, flexible, ever-changing structures to manage ourselves. Everything about radical capitalist, Libertarian, Rand-driven, Baby Boomer cop-outs pisses me off. That architect guy in that book…? What an asshole. Any truly creative person would just walk away, move on to the next thing. Perfection? What a waste of time.
Life is not being. Life is becoming. But before that has any meaning, there has to be life. I my estimation, the USA is sucking on that score. For most of us, maybe even you, life is unnecessarily stupid. We don’t even have national healthcare. What the hell is wrong with us?
And, until that concept is more broadly understood and a more realistic assessment of where we stand on that issue is accepted by the powers that be and thought leaders everywhere, I will not get off this topic.
So, this comment is actually on topic; it’s about unions and big-time sports, what with us on the eve of the godless Northeast showing Jesus what the gridiron is all about…
Free agency in baseball – our “National Pastime”, a monopoly enabled by a specific act of Congress exempting Major League Baseball from the Sherman Antitrust Act – came into being through the litigation of one Curtis Flood, whose <a href=”http://en.wikipedia.org/wiki/Curt_Flood#Flood_v._Kuhn”>civil suit against the league</a> was based on the idea that a monopoly’s contract was de facto slavery. The case went to the Supreme Court; obviously, he won.
Just sayin’…
“If, as is claimed and I would concur, markets are efficiency engines, then their natural end state is a monopoly.”
This is not true. Firms can become more efficient by growing larger, gaining market share, and utilizing economies of scale. But they are far less adaptable to changing conditions than smaller firms, so they can get wiped out very quickly by changes in the economy, technology, or many other dynamics, while many of their smaller competitors can adapt. We see this happen again and again to companies that were only years before thought to be unchallenged. Disproving your hypothesis is the natural experiment of living organisms in a perpetual state of competition with each other. “Unregulated” evolution over billions of years has not produced anything resembling a long-term monopoly at any point in time. In fact, it has produced the opposite – countless species, ever-changing. What Schumpeter called “creative destruction” in the market economy.
“And in market after market, we see that absent government intervention, monopolies would have occurred.”
This is a totally unsupported statement. Besides the obvious point that there is no sure way of knowing what “would have occurred,” Antitrust law has been a confused mess of bad economics and worse law ever since its introduction into American jurisprudence around 100 years ago. It has undergone numerous major overhauls at various stages in the 20th century when it was realized to be completely ineffective or counterproductive, and numerous jurists and economists have written about this at length.
Contrary to your assertion, there has been pitifully little evidence of anti-competitive output-lowering behavior by firms or any real risk of a firm cornering a market in recent history. One illustration is the antitrust lawsuit brought against IBM by the Department of Justice in 1969 for its business practices regarding mainframe computers, which dragged on in litigation for 13 years and cost millions of dollars, at which point that market had severely declined and IBM was barely competitive in it anymore and the DOJ dropped the lawsuit. The Microsoft lawsuit was similarly flawed -look at the competitiveness of Firefox and Google Chrome just 10 years later, and that natural integration of technology would not even be legal if the DOJ had succeeded in its myopic objection to the bundling of browsers and operating systems. A favorite progressive talking point is that Walmart is a “monopoly” in its market, but it doesn’t meet any aspect of the definition. In reality, Walmart is hyper-competitive and has retained its large market share precisely because it races competitors and the company philosophy is that it is at risk of being toppled the moment it becomes complacent.
The only thing that can be said with certainty is that markets have proven themselves to be far more dynamic than critics give them credit for. The big firm that “nobody could ever unseat” according to interventionists is in reality most often displaced and forgotten within a few decades. There are exceptions, but they are just that. The auto manufacturers and investment banks have gone bust and been replaced by smaller firms absent a Federal bailout. A&P was the largest retailer in the United States in the 1960′s. There was no government intervention there, and most people have never even heard of it today. Why the decline? Competitors drove many of its operations out of business.
Recent history…1969? Defending MSFT?
You’ll have to do better that this if you want me to pay attention.
When you look around the table, and you can’t identify the stupid money…it’s you.
That’s alright, Frymaster. You’ve made it amply clear that you have more interest in throwaway one-liners and insulting “the opposition” than in having a discussion. Your contemptuous view of all non-progressives as ignorant children who need to be schooled in your brilliance, which you have voiced countless times on this blog, is not conducive to much of anything beyond a shouting match.
I’d just as soon take my “stupid money” and go. Good luck in your search for a poker group that can tolerate you for more than a weekend or two.
lolz. I’d look foolish, indeed, if I tried to deny the spot-on accuracy of your assessment of me. I wrote a book of commentary and opinion, right? Of course I’m full of myself, and, yes, I’m not particularly nice about it.
But review your own commentary against the same criteria…
The follow-up comments toThom Cahir’s Taft/Hartley article illustrate how advocates of this amendment to the National Labor Relations Act (Wagner Act) disguise where I feel its most negative impact has played out; that being on American workers on the job-site. Its academic, economic and political aspects have been dissected to a fare-thee-well over the years, but it would be nice to see more experiential evidence to warrant its accolades from the right or its condemnation from the left.
With that in mind, I offer the following from a recently retired union affiliated construction electrician.
In the late 1970′s work in the northeast had dried up and hard-hats like myself had to hit the road in order to earn a living. I accepted a job with the Tennessee Valley Authority at the Bellefonte Nuclear Power Station, the nuclear plant that TVA was building just over the state line in Hollywood, Alabama – a town about the size of Peacedale, RI.
Tennessee and Alabama had both adopted the Taft/Hartley amendment to the NLRA, and the TVA at the time did not require that those doing electrical work on its projects be licensed.
I was assigned to a crew whose duty it was to ground all of the equipment that was permanently in place at the plant. Without getting into specifics, electrical grounding is necessary for proper machine operation and especially important for worker safety.
There were twelve in my crew, and of these twelve, there were two licensed electricians – myself and a Brother from Washington, DC. The other ten faux electricians ran the gamut from ex-farmer to ex-ice cream truck driver, with similar exes in between.
This five or six to one ratio of skilled, licensed electricians versus unskilled, unlicensed electricians was consistent throughout the twenty or so other electrical crews responsible for wiring the power station.
It was the most dangerous job I have ever been on in my career, and I knew I was in trouble right from the start. I could see that most of those I worked with had little or no construction experience. They seemed to be nice enough people but that was beside the point. Word had gotten out among the blue collar workers in Hollywood, Alabama and the nearby communities that they could hire on at Bellefonte and get paid union wages; and this without having to pay dues to the union that negotiated those wages, along with their hours and their working conditions.
Although they didn’t pay for those services, those services were not provided for free.
People like myself sponsored them with our dues, just as our dues paid for our appprenticeships of four years of on-the-job training and classroom related instruction that enabled us to master our trade.
Of course, I left that job as soon as I could find work elsewhere. That took me about two or three months, and my main goal throughout that period was physical survival as much as financial survival. Each day I would watch my unskilled co-workers going ninety miles an hour doing things that they did not know how to do. They were making substantially more money than they had ever made before and they weren’t quite sure why. But they figured they had better work fast or they would be let go; and they were probably right about that.
It has become acceptable in many quarters to refer to these individuals as ‘free riders,’ but I don’t use that term. My label would be unacceptable in this forum. I also don’t use the term ‘Right to Work State’ to describe a state which has chosen to adopt the Taft/Hartley amendment. I recognize it as a disingenuous manipulation of dialogue being used to misidentify things.
I soon learned that legitimate craftsmen were refusing to work at Bellefonte. In the end, Tennessee and Alabama got what they paid for when they opted out of the job protections offered by the Wagner Act.
As with most of the other jobs I have been on, I put Bellefonte in my rear view mirror and gave it very little thought over the years. But I was working on a project in Las Vegas two years ago when The TVA came up during a lunchtime conversation. An electrician out of the Chattanooga Local who was on that Vegas job with me told me that the Bellefonte Nuclear Generating Station never did go on line. Billions of dollars have been spent there, but no electricity at all has yet been produced. The site has been sitting idle for more than twenty years now, and it has basically been used to provide spare parts needed at TVA’s other nuclear plants that are up and running.
Maybe those guys got it right the next time.
Patrick Brady – Unionization has little to do with safety in objective terms. There may be correlation in some circumstances, but that certainly doesn’t justify forcing people to pay dues to unions. If you want people to be properly licensed, it’s much more efficient and philosophically consistent to require proper licensing. You’re also talking about 40 years ago – a lot has changed since then in the way of safety standards and awareness. I’m sure you’ve heard the argument that unions used to serve a purpose… well, you can finish that sentence. Finally, you’re talking about one of the most dangerous professions in existence. How does the danger of electrical work justify something like requiring teachers to unionize?
“Right-to-work” is no more dishonest than saying people who oppose closed shop legislation are “anti-union.” I strongly support the right to unionize, but I also strongly support the right not to unionize. Again I have to ask why unions have such severe recruitment and retention problems if they offer such a valuable service.
Take a real stand and vote here: www.chronicle-tribune.com/news/should-indiana-democrats-be-fined-for-boycotting-right-to-work/poll_4e7e9018-4300-11e1-aa24-001871e3ce6c.html
This is all well and good but you have to look at the states that have right to work statutes and they are working, have the lower unemployment rates and reasonable taxes. The “blue” states are sitting on the edge of bankruptcy. Case in point, Detriot Michigan! Enough said.
The problems of Detroit, Michigan stem from a whole assortment of other problems that have nothing to do with the political party in office. Ed Glaeser’s book Triumph on the City does a good job of briefly describing why Detroit’s economy is such a mess, and none of them have anything to do with Democrats or Republicans.