In a recent NBC interview, President Obama blamed ATMs for taking away bank tellers’ jobs, and computerized airline check-in kiosks for eliminating aviation jobs. Communications Coordinator Lee Doren points out that innovation doesn’t affect the number of jobs so much as the types of jobs. Accomplishing more while using less labor is actually the key to prosperity. People looking for an explanation for today’s high unemployment need to look elsewhere.
Speaking to the Democratic National Committee (DNC) Winter Meeting in Washington, D.C., over the weekend, Labor Secretary Hilda Solis admitted she was biased toward unions. Unions only account for 11.9 percent of the workforce, but Solis’ favoritism puts them ahead of the other 88 percent of the American workers.
From the Washington Examiner:
President Obama is staying mostly quiet about the union battle going on in Wisconsin. His labor secretary, Hilda Solis, is not.
“The fight is on!” Solis told a cheering crowd at the Democratic National Committee’s winter meeting over the weekend in Washington. Giving her support to “our brothers and sisters in public employee unions,” Solis pledged aid to unionized workers who are “under assault” in Wisconsin and elsewhere.
It’s no surprise Solis sympathizes with the unions against Wisconsin Gov. Scott Walker’s budget reform proposal. After all, Solis often tells audiences how proud she is that her father was a Teamsters shop steward and her mother belonged to the United Steelworkers union. “Admittedly, I am a little biased,” she told the DNC, “because … I come from a union household.”
But is it the role of the secretary of labor to take sides in a fight that pits public employee union members against workers and taxpayers who support Walker’s reforms? After all, the Labor Department mission statement says its purpose is “to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States.” It doesn’t say anything about unionized wage earners, job seekers, and retirees.
“The Labor Department should not represent only that part of the work force that is unionized,” says Elaine Chao, labor secretary under George W. Bush. “It should be responsible for the overall welfare of the entire American work force.”
Introduced last summer, a bill affording President Obama executive power over private Internet companies in the event of a “national cyberemergency” is returning this year, albeit with a few tweaks. The CBS News article, “Renewed Push to Give Obama an Internet ‘Kill Switch,‘” insists that the bill should not cause Internet companies any alarm, citing government promises to limit the bill’s use to “crucial components of national infrastructure.” We must question, then, why it is the case that these promises aren’t built into the bill.
The revised version includes new language saying that the federal government’s designation of vital Internet or other computer systems “shall not be subject to judicial review.” Another addition expanded the definition of critical infrastructure to include “provider of information technology,” and a third authorized the submission of “classified” reports on security vulnerabilities.
For the layperson, information technology is “the use of technologies from computing, electronics, and telecommunications to process and distribute information in digital and other forms.” If it seems as though “provider of information technology” is applicable to literally any website you’ve ever been on, that’s because it is. And if the comprehensiveness of the list of those sites potentially subject to government intervention wasn’t enough, the legislation also includes clauses for government secrecy and unaccountability; that judicial review has gone by the wayside serves as a clear indication that this legislation is intended to envelop the private sector.
But last month’s rewrite that bans courts from reviewing executive branch decrees has given companies new reason to worry. “Judicial review is our main concern,” said Steve DelBianco, director of the NetChoice coalition, which includes eBay, Oracle, Verisign, and Yahoo as members. “A designation of critical information infrastructure brings with it huge obligations for upgrades and compliance.”
In some cases, DelBianco said, a company may have a “good-faith disagreement” with the government’s ruling and would want to seek court review. “The country we’re seeking to protect is a country that respects the right of any individual to have their day in court,” he said. “Yet this bill would deny that day in court to the owner of infrastructure.”
The government practice of ignoring private-sector rights is certainly common enough; it’s when one branch of government is liberated of any checks whatsoever, including those of other branches of government, that Americans have an even greater cause for concern. This is especially true when our patronizing representatives are considerably less-qualified, good intentions and all, to understand the ins-and-outs of Internet security than are major Internet corporations.
Other industry representatives say it’s not clear that lawyers and policy analysts who will inhabit Homeland Security’s 4.5 million square-foot headquarters in the southeast corner of the District of Columbia have the expertise to improve the security of servers and networks operated by companies like AT&T, Verizon, Microsoft, and Google. American companies already spend billions of dollars on computer security a year.
The article highlights the following restrictions, strapped across an otherwise a limitless pool of sites subject to executive overhaul:
Under the revised legislation, the definition of critical infrastructure has been tightened. DHS is only supposed to place a computer system (including a server, Web site, router, and so on) on the list if it meets three requirements. First, the disruption of the system could cause “severe economic consequences” or worse. Second, that the system “is a component of the national information infrastructure.” Third, that the “national information infrastructure is essential to the reliable operation of the system.”
That the definition has been meaningfully “tightened,” however, remains to be seen. A closer look at these requirements reveals as much:
1) The first requirement only stipulates that the disruption of the site might impact the economy (the word “severe” is open to unchecked executive interpretation, so we ought to disregard it altogether). Ironically, government intervention to a given website in a time of crisis is likely to involve shutting the site down (leading critics of the legislation to label it a government “kill switch”) — this most certainly qualifies as a “disruption.”
2) The Department of Defense defines the national information infrastructure (NII) as:
The nationwide interconnection of communications networks, computers, databases, and consumer electronics that make vast amounts of information available to users. The national information infrastructure encompasses a wide range of equipment, including cameras, scanners, keyboards, facsimile machines, computers, switches, compact disks, video and audio tape, cable, wire, satellites, fiber-optic transmission lines, networks of all types, televisions, monitors, printers, and much more. …
A good rule of thumb: when your personal keyboard qualifies for the NII, then so does the technology being used to generate a website.
3) Combined with (2), the final requirement only necessitates that the website be in some way dependant on technology within the United States to operate (it doesn’t even require that the site be based in the U.S.).
How wide a net does this legislation cast? A website should be concerned if it meets the following criteria: it’s big, and it utilizes some technology in the U.S. (one or two websites come to mind). The article does, however, leave us with these words of comfort:
For their part, [bill sponsors] Lieberman and Collins say the president already has “nearly unchecked authority” to control Internet companies.
It’s unclear why the author bothered to qualify his statement with “nearly,” though the message itself is as clear as crystal: private Internet companies exist under the government’s thumb, and they can’t do anything about it.
President Obama needs to look beyond pushing only the U.S.-Korea Free Trade Agreement to standing behind ratification of the other pending trade agreements with Panama and Colombia, says Cato’s Dan Griswold in a Washington Times article today.
Griswold points out that while the FTA with Korea is economically of far greater consequence than the Colombia FTA, that agreement would help cement our relationship with an important ally that is a strong pro-democracy counterpart to dictators like Hugo Chavez. In economic terms, the trade pact would completely eliminate most tariffs on U.S. goods and services — providing companies like Caterpillar Inc. with strong market opportunities.
He takes issue with the Obama administration’s pronouncement that they will not be introducing the implementing legislation for the Colombia FTA anytime soon because they don’t have the votes. That shouldn’t be the case, Griswold says, because of the influx of new legislators who aren’t bound to the union-led opposition to free trade. As Griswold says,
It sounds more like a convenient and self-fulfilling prophecy on the part of the administration. If the votes are not there for the Colombian agreement, it is only because Mr. Obama so far has failed to exercise the same leadership he recently displayed in moving the Korean agreement toward passage.
Here’s what CEI has to say on the need to vote for the U.S.-Colombia FTA.
Image credit: tanya~b’s flickr photostream.
In its Sunday editorial, The Washington Post takes an upbeat post-election look at the prospects for stalled trade agreements, especially the pending U.S.-Korea Free Trade Agreement. With the Republicans running the House, the article notes that some key House committee positions — chairman of Ways and Means and chairman of its trade subcommittee — will likely be held by legislators who call themselves free-traders. There is a note of caution, however, about the role of the new Tea Party members, who may not be as supportive of international trade. But, the Post notes, former U.S. Trade Representative under President Bush, Rob Portman, handily won the Senate seat in Ohio, which may mean there’s less opposition to trade than commonly thought.
In Seoul, South Korea, today top U.S. and Korean trade negotiators are trying to resolve some differences relating to autos and beef so the negotiations will be complete before President Obama and South Korean President Lee Myung-bak meet Thursday at a summit before the G-20 meeting. The trade pact would be the largest economic agreement since NAFTA and would substantially reduce both tariff and non-tariff barriers on both sides. Other countries have moved ahead in signing trade agreements with South Korea, most notably the European Union, and the U.S. would be at a considerable advantage if it backs away from its own Korea agreement.
The Washington Post editorial also points out not only the economic but the important geopolitical ties that a U.S.-Korea FTA and other pending FTAs would further:
At stake is not only economic growth, but also the strategic balance in Asia. As China rises, this agreement would help keep the peace by binding two long-time democratic allies closer. Similar arguments apply to stalled agreements with two U.S. allies in Latin America, Colombia and Panama. The finalization and swift congressional approval of all three pacts should be among Mr. Obama’s highest priorities for 2011.
Hear, hear.
U.S. Trade Representative Ron Kirk is scheduled to meet today with Korean Trade Minister Kim Jong-hoon in San Francisco to discuss the pending U.S.-Korea Free Trade Agreement. Hopes are high that with this discussion some lingering issues (autos and beef) holding up the pact could be resolved before President Obama’s upcoming meeting with South Korean President Lee Myung-bak at the G-20 Summit in Seoul in mid-November.
The National Association of Manufacturers has focused on the importance of the FTA in building market share for U.S. manufacturers, who, with the stalled trade agreement, are losing out to countries that have already signed trade agreements reducing tariffs for their goods and services exported to South Korea. An earlier post at OpenMarket made that point as well.
South Korea has not been shy about entering into trade deals. Just this month, the European Union and South Korea signed a trade agreement that opens up both markets. According to the Korea Herald,
South Korea has so far signed six FTAs with 17 countries including Chile, Singapore, the four-member European Free Trade Association (Norway, Switzerland, Iceland and Liechtenstein), the 10-member ASEAN, India and the U.S. All of them except for the one with the U.S. have taken effect.
As Gabriel Sahlgren wrote in a 2007 CEI Issue Analysis:
The agreement is expected to abolish about 95 percent of tariffs on all industrial and consumer goods within three years, and remove most of the lingering 5 percent within a decade. According to a study by the U.S. International Trade Commission, the deal would increase U.S. GDP by $10.1-11.9 billion, and may boost annual trade between the countries by as much as $17.8 billion. But critics ignore those gains.
* * * * *
The KORUS-FTA is not a perfect agreement, but it would generate so many economic and political gains for the U.S. that the benefits appear greater than its attendant problems. It would increase U.S. GDP by $10.1- 11.9 billion and bilateral trade by $17.8 billion annually, boost America’s standing in the region, and generate momentum for the cause of global free trade. Finally, to ratify it would bolster good relations with South Korea, an important ally, which negotiated and renegotiated the agreement in good faith.
An agreement that would make sense economically and politically — what’s not to like?
The private sector shed 39,000 jobs in September. Liberal journalists claim this was “unexpected.” This reveals their shaky grasp of economics.
If you were an employer, why would you hire somebody in an economy that’s barely growing, when you could be hit by all sorts of employee-related expenses in the future, the way employers have already been hit by increased costs due to Obamacare? Employers are worried about additional costs that could force them to lay off newly hired workers if Congress passes cap-and-trade global warming legislation (which would impose massive costs on many industries, requiring cutbacks in production). Recent EPA rules aimed at global warming will wipe out at least 800,000 jobs, with a blizzard of additional new rules expected to follow. And the stimulus package, despite its $800 billion cost, did little for employers, wiping out export-sector jobs, and funneling green-jobs money to foreign firms. (The current weak “recovery” actually began in June 2009, before the stimulus package even began being spent.)
Thanks to steadily-expanding government red tape, every time you set a worker’s pay, or have to fire a lazy or incompetent employee, you now face the risk of being sued (You are less likely to hire someone if you can’t fire them later if they turn out to be lazy or incompetent). Employees who are fired for even good reasons often turn around and sue the employer for age, race, sex, or disability discrimination, or for the “hostile work environment” they claim existed during their employment due to things like overheard remarks. Getting meritless lawsuits tossed out is expensive — years ago, it was typically $25,000 on legal bills if the employer succeeded in getting rid of the lawsuit at the earliest possible stage (on a pre-trial motion to dismiss), $75,000 at the next stage (”summary judgment”), and $250,000 if the employer won at trial. Under a legal double-standard called the Christiansburg Garment Rule, if the employer wins, the worker seldom has to pay the employer’s legal bills; but if the worker wins, the employer has to pay the worker’s legal bills as a matter of course (or even a multiple of the employee’s legal bills if the lawsuit is brought in some liberal states like New Jersey (see Rendine v. Panzer (1995)).
You are much less likely to hire someone if you can’t avoid being sued by them later over the pay package you negotiated with them when they were hired. That’s now a real possibility for employers. Setting employee pay has gotten harder under the Obama administration due to the 2009 Lilly Ledbetter Fair Pay Act, the first law signed by President Obama, which essentially eliminates the deadline for bringing pay discrimination claims against employers, meaning that employees can wait many years after their pay is set, and sometimes even after they are fired, before bringing a lawsuit against their employer. (Some courts have even allowed employees to use the new law to challenge demotions many years after they occur, under the theory that their demotion indirectly affected their pay.) The Ledbetter Act was named after Lilly Ledbetter, who waited until she was about to retire before suing over alleged pay discrimination, meaning that the supervisor who allegedly discriminated against her was dead and unable to defend himself against discrimination charges by the time the jury decided her case. (Ledbetter testified in her deposition that she knew of the pay disparity by 1992, but didn’t file a complaint with the EEOC until 1998). The Ledbetter Act overturned the deadline applied by the Supreme Court in its 5-to-4 ruling against Ledbetter.
The Obama administration wants to make it even easier to sue for discrimination through bills like the Civil Rights Restoration Act and the Paycheck Fairness Act. The Paycheck Fairness Act would require equal pay for some employees who do unequal work, and allow them to seek unlimited punitive damages against their employers. Right now, most pay discrimination claims require a showing of unequal treatment (that is, intentional discrimination), although, under Title VII of the Civil Rights Act, big employers can be ordered to pay very limited amounts (back pay, not emotional distress or punitive damages) for certain practices or pay scales that have an unintentional “disparate impact” on women or minorities (like paying people more because they have a high-school diploma, if the job supposedly doesn’t really require a high-school diploma). The Paycheck Fairness Act would import such standards into the Equal Pay Act, which covers even tiny employers (unlike Title VII), and subject them not merely to back-pay claims, but to uncapped punitive damages and claims for “emotional distress” over pay disparities.
It would require the employer to prove in court things that no tiny employer could ever afford the legal-fees to demonstrate. Under the Paycheck Fairness Act, an employer would have to show an overriding “business necessity” and lack of any alternative to justify the use of certain factors “other than sex” in setting pay scales. This is worrisome, because even under existing laws that allow lawsuits over “unintentional” discrimination, employers have been forced to spend hundreds of thousands of dollars on expert witnesses to show that a challenged practice was reasonable, only to have the courts say that that was not enough, that the practice had to be more essential (and more closely-related to technical requirements like “content validity” and “construct validity”).
The House passed a budget enforcement resolution yesterday. It sets 2011’s discretionary spending $7 billion below what President Obama has requested.
Next year’s discretionary spending target is $1.12 trillion for next year. The $7 billion difference represents savings of 0.625 percent. Barely a rounding error. If total spending (including mandatory and defense spending) ends up at $3.5 trillion next year, the savings becomes 0.2 percent.
Of course, 2010 discretionary spending was $1.39 trillion. 2011 spending will very likely end up much closer to that than the targeted $1.12 trillion. The appropriations process is not kind to non-binding resolutions, however well-intentioned. Especially when the resolution “doesn’t detail how Congress should reach that [deficit reduction] goal.”
Congress lacks the will to cut $270 billion of spending. The interests benefitting from that spending will scream bloody murder the second their programs are put on the chopping block. In an election year when incumbents are more fearful than usual, no politician worth his salt wants to cause an uproar.
Congress need not worry too much, though. Even in anti-incumbent years, re-election are almost always above 90 percent. The vast majority of congressional turnover happens through retirement, running for other office, or death.
The pattern is holding this year, so far. The University of Virginia’s Larry Sabato recently pointed out that 5 incumbents have lost their state primary elections this year, while 240 were re-nominated. That’s a 98 percent success rate. There will be a few more casualties, especially in the November general elections.
Most members are safe. They can, and should, rock the boat by cutting unnecessary spending. If anything, the most aggressive cutters might become folk heroes like Chris Christie in New Jersey. They just don’t have the guts.
I will be more than happy if Congress proves me wrong. We’ll find out over the next few months.
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