A band I was in years ago had a song titled, “Sheet Rockers vs. Aluminum Siders,” about a fight our singer saw at work on a construction site.
I was reminded of it earlier today, when members of the International Longshore and Warehouse Union (ILWU) stormed the Port of Longview, Washington, where they held security guards hostage, blocked a train, and destroyed property, damaging railroad cars and dumping grain. They were protesting the hiring at a grain terminal by the employer, EGT, of a contractor employing workers belonging to a different union, the Operating Engineers.
Such union turf battles are not novel. What is unusual about this one is that it doesn’t involve the ubiquitous Service Employees International Union (SEIU), which in recent years has picked fights with UNITE-HERE, the California Nurses Association, and its former affiliate, National Union of Healthcare Workers. And now members of a health care workers local in Michigan are trying to disaffiliate from SEIU, which a local spokesman said, “seem to only be interested in collecting dues from us.”
While SEIU’s unusually large number of fights with other unions is largely due to the efforts of its recent former president, Andy Stern, to centralize his authority, inter-union fights are still nasty in a way rarely seen between market competitors. That’s probably because for unions, the stakes are higher. (Current SEIU head May Kay Henry has largely continued Stern’s policies.)
Under current labor law, unions enjoy the privilege of monopoly representation of all workers in a bargaining unit, which makes representation an all-or-nothing proposition — you can’t fight for market share when the market is indivisible.
For more on SEIU’s fights with other unions, see here.
President Obama wants Congress to pass a $447 billion proposal called the “American Jobs Act,” a costly set of recycled stimulus plans that contains no new ideas about how to fix the economy. It contains more money for the long-term unemployed, more infrastructure spending, and funds for hiring laid-off teachers. It also would extend a cut in the portion of payroll taxes paid by employees. The measures would be financed mostly by deficit spending, but partly, if Obama has his way, by raising taxes on the so-called “rich” — a category that includes most of the small business owners who actually hire people — and by eliminating what the administration refers to as “tax loopholes” — which are not really tax loopholes at all, but rather provisions that allow industries disfavored by the administration to benefit from the same tax code provisions as other industries. (What is a tax “loophole” to the Obama administration is actually evenhanded non-discriminatory treatment of different industries, according to The Washington Examiner‘s Tim Carney and other observers. For example, to Obama, letting the petroleum industry receive the benefits of tax code provisions that also apply to other energy or resource-extraction industries like mining qualifies a “loophole,” as does treating the oil companies the same as farmers or timber companies; while giving tax credits solely to a politically-favored industry or manufacturer, such as a politically-connected “green-jobs” firm, or a taxpayer-subsidized ethanol manufacturer, is not a tax loophole to Obama).
Even the least-bad of Obama’s proposals will not grow the economy. Aid for the long-term unemployed will reduce the size of the economy by encouraging some people to not accept jobs that pay far less than they were accustomed to, even when those are the only jobs available to them. Obama’s proposed infrastructure spending will not grow the economy either, as Veronique de Rugy and others note, since it will be accompanied by costly Davis-Bacon mandates designed to favor unions (which raise the cost of transportation projects and exclude many small non-union contractors), and some of it will be wasted on rail boondoggles and pork rather than roads and bridges, or on Obama Administration pet projects, like energy efficiency, that require specialized skills that most unemployed construction workers lack. (Ironically, Obama removed most transportation spending from the original $800 billion stimulus package for political reasons, replacing it with more harmful welfare and social spending.)
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OPINION
Caroline Baum: “A Layman’s Guide to the Government’s Jobs Speech.”
“Let’s face it: If the president had a plan to create jobs, he wouldn’t have kept it under wraps until now. Why take flak from Republicans and heat from the public if you have what it takes to turn the economy and labor market around? ”
Andrew P. Kelly: “How For-Profit Colleges Can Save Themselves—and Higher Education”
“What’s next for proprietary colleges and universities? If I knew that, I’d be raking it in with the short sellers rather than taking the bus to work every day. But it seems as though the for-profits would be wise to take a cue from other corporations that have reinvented themselves in the face of economic and political challenges. In particular, they may have a lot to learn from companies that evolved from producing and selling goods directly to consumers to providing services and expertise to other organizations. In short, for-profit colleges should consider becoming the next IBM. ”
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The following is my fantasy speech on jobs from Barack Obama. He looks at CEI’s websites, realizes his big-government approach has been all wrong, but also takes the GOP to task for its past regulatory sins.
My fellow Americans,
As I stand here tonight before you in this grand hall of the U.S. Capitol building, let me begin my address with an elegant Latin phrase. Mea culpa.
I was wrong about nearly all the domestic policies I have been pursuing since the beginning of my administration and really over the duration of my political career. During my long vacation at Martha’s Vineyard, when I wasn’t playing golf, I was so frustrated about the economy that I did something I should have done a long time ago. I surfed the Internet to look for answers that my so-called economic experts weren’t giving me.
I came upon this amazing web site by a group called the Competitive Enterprise Institute, CEI.org, and its companion blog OpenMarket.org. I had heard of CEI before, but just dismissed these individuals as mouthpieces for the GOP.
My mistake. I now realize that CEI says things that are simply common sense. I was particularly struck by the organization’s one simple yet brilliant insight on economic growth. This amazing insight — from CEI Vice President and Director of Technology Studies Wayne Crews — is that one doesn’t need to teach grass to grow. It will grow all by itself if only we remove the suffocating rocks that are blocking the beautiful blades from sprouting.
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Over at Beltway Confidential today, Tim Carney asks if one of the unintended (or perhaps not-so-unintended) consequences of Dodd-Frank will be to make big banks bigger:
“The Overhead Smash,” is how I describe Big Business’s use of regulation to crush smaller competition. Regulation increases overhead costs. Overhead generally falls heavier on smaller business. For this reason, regulations often benefit the bigger guys by keeping out new entrants and forcing smaller guys to fold.
We could be seeing that in banking, thanks to Dodd-Frank. Check out this report by the Investigative Reporting Workshop. The chief pressures leading to consolidation of the banking sector are market factors, but regulation plays a role:
…a new competitive landscape, increasing regulations and a sluggish economy are putting heavy pressure on banks, particularly smaller community banks…..
The result of more consolidation might well mean that some banks will remain “too big to fail,” despite pressure in Congress and elsewhere to make sure the government isn’t forced to bail out large institutions in the event of another financial crisis.
There is a similar process at work in the aerospace industry, with the International Trade in Arms Regulations (ITAR). As industry analyst and journalist Jeff Foust described a few years back, the new laws passed in the 1990s have had the effect of hamstringing start-ups, requiring extensive paperwork and months of delay before a small company could so much as have a technical discussion with (say) one of those dangerous Canadians.
One of the reasons that it’s been hard to get much action out of Congress to fix the problem is that the big players, such as Boeing and Lockheed Martin, don’t mind it that much, because they have large government contracts that justify and pay for the overhead of a department dedicated to nothing other than dealing with the State Department on such issues, a luxury that a small company with little or no government work can neither afford or justify. Hence, it actually represents a convenient barrier to entry for the larger companies to protect them from competition from upstarts.
Until someone in Congress starts to make decisions on the basis of American competitiveness in space instead of how many campaign contributions they get from the traditional players, this is a problem that will persist.
The federal government has rejected a proposal from New York’s Mayor to exclude sugar-sweetened drinks from the food stamp program. But the government earlier banned white potatoes from the federal WIC Program, under the theory that they aren’t healthy enough. Is a baked potato, which has a lot of vitamin C, really less healthy than sugary sodas? (Potatoes also have more Vitamin C than a banana or an apple, and contain all 8 amino acids, unlike most other staple foods like corn.) The government does not seem to know how to distinguish between “good” and “bad” foods.
Meanwhile, the government also spent $766,000 of your tax dollars to open an International House of Pancakes in Washington, D.C. It’s also subsidizing the development of high-calorie foods that benefit politically connected agribusinesses.
If food stamp use were restricted to certain foods, it might provoke a big outcry, since a record 45.8 million people are now on food stamps, leading some to call America a “food stamp nation.”
Give some people a badge, and the power goes to their head. A TSA agent has threatened to sue a female traveler who complained that the agent engaged in a sexually-intrusive search that was extreme and unnecessarily prolonged. The traveler, who is also a syndicated columnist, says that the agent “four times stuck the side of her gloved hand into my vagina . . . Four times. Back right and left, and front right and left.” She calls that “government-sanctioned sexual assault.” The TSA agent is now threatening to sue the traveler for publicizing what she experienced. The TSA agent, through her lawyer, is now demanding $500,000, in a letter from the lawyer that complains about the traveler’s “detailed description of what you claim my client did to you, including the statement that my client inserted her fingers into your vagina. These outbursts in public and writings on the internet have subject my client to hatred, contempt, ridicule, or obloquy.” One would have thought that a core purpose of the First Amendment was to permit citizens to criticize government officials (and their actions) in an “robust and uninhibited” way without reprisals.
Another writer, Andrew Ian Dodge, earlier shared his painful experience at the hands of the TSA (see this link.) The TSA inflicted prolonged pain on him through completely unnecessary “kneeding and prodding” of his scar from a “colon cancer operation that went from” his crotch to his sternum.
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Just introduced by New Jersey Rep. Frank LoBiondo (R), the Piracy Suppression Act of 2011 aims to improve U.S. policy with respect to ocean pirates who are mostly operating in the Gulf of Aden or nearby in the Indian Ocean or Arabian Sea. It is primarily concerned with dealing with the problems of “who pays?” when the U.S. Navy rescues foreign-flagged vessels from modern-day swashbucklers with assault rifles and rocket-propelled grenades. Fine.
But further down, the bill calls on the secretary of transportation to create a program to train mariners on the use of force.
The program shall include–
`(1) information on waters designated as high-risk waters by the Commandant of the Coast Guard;
`(2) information on current threats and patterns of attack by pirates;
`(3) tactics for defense of a vessel, including instruction on the types, use, and limitations of security equipment;
`(4) standard rules for the use of force for self defense as developed by the Secretary of the department in which the Coast Guard is operating under section 912(c) of the Coast Guard Authorization Act of 2010 (Public Law 111-281; 46 U.S.C. 8107 note), including instruction on firearm safety for crewmembers of vessels carrying cargo under section 55305 of this title; and
`(5) procedures to follow to improve crewmember survivability if captured and taken hostage by pirates.’.
Why on Earth is the U.S. Department of Transportation, a department of dubious value even before LoBiondo’s bill, being instructed to teach mariners about piracy risks? DOT’s Maritime Administration (MARAD) already issues advisories to the maritime community. In fact, if you go to MARAD’s most recent advisory, they tell you to go to the EU’s Maritime Security Centre – Horn of Africa (MSCHOA) website for the latest information. Presumably, the Department of Transportation will hire a team of experts who will instruct ship captains to bookmark this PDF’s URL (full disclosure: I have no formal DOT anti-piracy training). Granted, MSCHOA only tracks acts of piracy around the Horn of Africa, and there is other piracy around the world. But that advice could pretty much be summed up as: exercise caution in the Strait of Malacca and don’t go yachting off the coast of Venezuela.
And are we expected to believe that the maritime industry hasn’t, you know, thought to tell crew members about piracy risks? Or, even if the crews are officially kept in the dark by some sort of twisted corporate policy (they aren’t), that they haven’t bothered to look into this piracy stuff on their own? Perhaps a single Google search before leaving port (the Internet can be really, really slow on the high seas)? Or any of the maritime industry trade publications and blogs? And insurance companies don’t care about this type of information? The industry and those employed by it are well aware of these issues. Ocean carriers incorporate piracy risk into their shipping prices. There are even a bunch of businesses that specialize in providing maritime security and anti-piracy training. They do not need subsidized “training” from federal bureaucrats.
In their instinctual drive to “do something,” lawmakers often forget to ask, “Why am I doing this in the first place?”
NEWS
TAXES – Top 50p Tax Rate Damages UK, Say Economists
“Twenty high-profile economists have urged the government to drop the top 50p tax rate, which they say is doing ‘lasting damage’ to the UK economy. In a letter to the Financial Times, they say it should be axed ‘at the earliest opportunity’ to boost growth.”
OIL DRILLING – Chevron Hits New Deepwater Oil Reserves
“‘The Moccasin discovery underscores the importance of the deepwater Gulf of Mexico as a source of domestic energy for the United States and as a focus area for Chevron’s worldwide exploration portfolio,’ said George Kirkland, vice chairman, Chevron Corporation. ‘Moccasin is an important addition to our queue of high-quality opportunities around the globe.’”
CONGRESSIONAL SUPER COMMITTEE – Super Panel Chiefs Have Not Met, Ever
“For Rep. Jeb Hensarling (R-Texas) and Sen. Patty Murray (D-Wash.), the job of leading a congressional search for $1.5 trillion in deficit reduction over the next three months is tough enough. But that task is further complicated by a little-known oddity: The two Capitol Hill veterans have never met each other. Not in the month since they were tapped to lead the vaunted “supercommittee,” nor in the preceding nine years that they jointly served in Congress, aides to both lawmakers say.”
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Who ought to have greater fiduciary duties: a consumer-selected, paid adviser whose advice is optional, or an adviser who you legally must pay and whose advice is imposed by law?
Assistant Secretary of Labor Phyllis Borzi believes the former.
The Department of Labor redefining the term “fiduciary“ does just that. Paid investment advisers will be held to a greater fiduciary standard than the federal government and elected officials. The federal government meets the precise dictionary definition of fiduciary, “An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit.”
From the definition it is clear that the Obama administration and past administrations have not lived up to their role as fiduciary to the taxpayer. The United States has not had a budget in three years and has $14 trillion-plus in debt. That alone would violate any definition of fiduciary.
Policies of this nature have been consistent throughout the Obama administration: Over-regulate the business community, stifle economic growth, and hinder job creation. All with lip service of protecting the middle class and equality, while in reality the policies expand the divide. Limiting access, individual choice, and raising the price of financial products only furthers the gap between the rich and poor.
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