labor unions

New Deal Economics

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A great op-ed piece by Amity Shlaes in the Wall Street Journal responding to Paul Krugman’s incessant campaigning on why New Deal spending works. Unfortunately our President-Elect seems to subscribe to Mr. Krugman’s brand of misguided economics.

Some highlights from the WSJ piece:

The New Deal is Mr. Obama’s context for the giant infrastructure plan his new team is developing. If he proposes FDR-style recovery programs, then it is useful to establish whether those original programs actually brought recovery. The answer is, they didn’t. New Deal spending provided jobs but did not get the country back to where it was before.

This reality shows most clearly in the data — everyone’s data. During the Depression the federal government did not survey unemployment routinely as it does today. But a young economist named Stanley Lebergott helped the Bureau of Labor Statistics in Washington compile systematic unemployment data for that key period. He counted up what he called “regular work” such as a job as a school teacher or a job in the private sector. He intentionally did not include temporary jobs in emergency programs — because to count a short-term, make-work project as a real job was to mask the anxiety of one who really didn’t have regular work with long-term prospects.

The result is what we today call the Lebergott/Bureau of Labor Statistics series. They show one man in four was unemployed when Roosevelt took office. They show joblessness overall always above the 14% line from 1931 to 1940. Six years into the New Deal and its programs to create jobs or help organized labor, two in 10 men were unemployed. Mr. Lebergott went on to become one of America’s premier economic historians at Wesleyan University. His data are what I cite. So do others, including our president-elect in the “60 Minutes” interview.

Later, Lee Ohanian of UCLA studied New Deal unemployment by the number of hours worked. His picture was similar to Mr. Lebergott’s. Even late in 1939, total hours worked by the adult population was down by a fifth from the 1929 level. To be sure, Michael Darby of UCLA has argued that make-work jobs should be counted. Even so, his chart shows that from 1931 to 1940, New Deal joblessness ranges as high as 16% (1934) but never gets below 9%. Nine percent or above is hardly a jobless target to which the Obama administration would aspire.

What kept the picture so dark so long? Deflation for one, but also the notion that government could engineer economic recovery by favoring the public sector at the expense of the private sector. New Dealers raised taxes again and again to fund spending. The New Dealers also insisted on higher wages when businesses could ill afford them. Roosevelt, for example, signed into law first his National Recovery Administration, whose codes forced businesses to pay an above-market minimum wage, and then the Wagner Act, which gave union workers more power.

As a result of such policy, pay for workers in the later 1930s was well above trend. Mr. Ohanian’s research documents this. High wages hurt corporate profits and therefore hiring. The unemployed stayed unemployed. “If you had a job you were all right” — the phrase we all heard as children about the Depression — really does capture the period.

Great stuff, and scary in terms of the plans our future President has for this country. Read the full article here.

Shift from Capitalism to Socialism, European Style

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From the WSJ…

The most basic explanation for why Barack Obama may win next Tuesday is that voters want economic deliverance. The standard fix for this in politics everywhere is to crowbar the old party out and patch in the other one. It is true as well that the historic nature of the nation’s first African-American candidacy would play a big role.

Push past the historic candidacy, however, and one sees something even larger at stake in this vote… The real “change” being put to a vote for the American people in 2008 is not simply a break from the economic policies of “the past eight years” but with the American economic philosophy of the past 200 years. This election is about a long-term change in America’s idea of itself.

I don’t agree with the argument that an Obama-Pelosi-Reid government is a one-off, that good old nonideological American pragmatism will temper their ambitions. Not true. With this election, the U.S. is at a philosophical tipping point.

The goal of Sen. Obama and the modern, “progressive” Democratic Party is to move the U.S. in the direction of Western Europe, the so-called German model and its “social market economy.” Under this notion, business is highly regulated, as it would be in the next Congress under Democratic House committee chairmen Markey, Frank and Waxman. Business is allowed to create “wealth” so long as its utility is not primarily to create new jobs or economic growth but to support a deep welfare system.

…

This would be a historic shift, one post-Vietnam Democrats have been trying to achieve since their failed fight with Ronald Reagan’s “Cowboy Capitalism.”

Of course Cowboy Capitalism built the country. More than any previous nation in history, the United States made its way forward on a 200-year wave of upwardly mobile, profit-seeking merchants, tradesmen, craftsmen and workers. They blew out of New England and New York, rolled across the wildernesses of the Central States, pushed across a tough Western frontier and banged into San Francisco and Los Angeles, leaving in their path city after city of vast wealth.

The U.S. emerged a superpower, and the tool of that ascent was simple — the pursuit of economic growth. Now China, India and Brazil, embracing high-growth Cowboy Capitalism, are doing what we did, only their cities are bigger.

Now comes Barack Obama, standing at the head of a progressive Democratic Party, his right hand rising to say, “Mothers, don’t let your babies grow up to be for-profit cowboys. It’s time to spread the wealth around.”

READ IT HERE, [an itemized list of European yoke-style government policies Obama-Reid-Pelosi will install.]

U.S. Chamber of Commerce vs. Democrats

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I think the chamber of Commerce knows a thing or two about how economies are built and destroyed. They clearly see a danger in letting the Democrats run away with the government. From the WSJ…

The nation’s largest business lobby, the U.S. Chamber of Commerce, has raised ire among Democratic leaders for pouring millions of dollars into an advertising push to prevent the party from winning dominance in the Senate next year…

The Chamber says it has raised enough money this year from corporations to spend about $35 million on the election, double its budget for House and Senate races in the 2006 election. The group is supporting pro-business candidates, almost exclusively Republicans in contested Senate races.

Business executives fear that Democrats, bouyed by heavy spending from organized labor, could gain enough muscle in the Senate to spark policies favoring increased unionization, higher taxes, more restrictions on trade and more regulation on the financial-services and housing sectors…

The Chamber has spent $10 million on advertising on behalf of pro-business candidates in tight races since the end of August. No other single organization has spent more on Senate races, according to data collected by the Federal Election Commission. The Chamber says it will spend millions more in the final weeks of the campaign.

The Washington-based Chamber represents three million U.S. business and most of the thousands of local chambers of commerce from around the country. The lobbying federation says it doesn’t favor either party, but backs “pro-business candidates” from both. It has no legal obligation to be nonpartisan.

Overall, U.S. businesses tend to contribute similar amounts to Democrats and Republicans in their direct giving to candidates and political parties. Through Sept. 30, companies and their political action committees donated $129.6 million to Democrats and $132.6 million to Republicans.

The Chamber of Commerce is attempting to counteract another major font of funding and influence — the $300 million that organized labor will spend on campaigns during this election cycle, most of it aimed at persuading unionized workers to vote Democratic. Much of that money has gone directly to campaigns: Through Sept. 30, labor unions and their political action committees have given $52.3 million to Democrats and $4.8 million to Republicans, according to data compiled by the nonpartisan Center for Responsive Politics.

Yet another in a very long line of singularly decisionable proofs that Obama and the Democrats are wrong for America. Combine them and I’m shocked that Obama has any but the far-Left sideshow vote.

American fence-sitters are letting temporary emotion and hot-air speech-writing rule the election cycle, rather than substance, experience, and sound policy to our very painful downfall if Obama and and Democrat candidates win.

Labor Unions Prolonged the Depression

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WSJ Excerpt…

By the mid-1930s, the U.S. economy appeared to be climbing out of the Great Depression. The Dow Jones Industrial Average (DJIA), which had bottomed out at 41 in 1932, was advancing. It increased 73% from the beginning of 1935 through the end of 1936, when it hit 180. The number of unemployed, 13 million in 1933, dropped to 9.5 million in 1935 and 7.6 million in 1936.

Then, in 1937, the DJIA plunged 33% in what is often called “a depression within a depression.” Joblessness skyrocketed.

A principal factor in the meltdown that year was the U.S. Supreme Court’s surprise 5-4 decision in early April to uphold the constitutionality of the Wagner Act, which had passed two years earlier. This measure, which is still the basis of our labor relations regime, authorized union officials to seek and obtain the power to act as the “exclusive” (that is, the monopoly) bargaining agent over all the front-line employees, including union nonmembers as well as members, in a unionized workplace.

As Amity Shlaes observed in her recent history of the Great Depression, “The Forgotten Man,” within a few months after the Wagner Act was upheld, industrial production began to plummet and “the jobs started to disappear, with unemployment moving back to 1931 levels,” even as the number of workers under union control was “growing astoundingly.”

Given the reality of unions in the workplace, the law meant that efficiency and profitability were compromised, by forcing employers to equally reward their most productive and least productive employees. Therefore subsequent wage increases for some workers led to widespread job losses.

Pre-Depression-era growth and prosperity did not return to the private sector until the early 1950s, when the spread of state right-to-work laws prohibiting forced union membership and dues greatly reduced the detrimental effects of the Wagner Act.

The U.S. has just experienced another stock market crash, and Barack Obama, the candidate now favored to be the next president, is in favor of what amounts to a new Wagner Act.

“I owe those unions,” Mr. Obama explained in his 2006 political memoir, “The Audacity of Hope.” “When their leaders call, I do my best to call them back right away. I don’t consider this corrupting in any way . . .”

John McCain voted against card-check legislation in 2007, and has pledged to veto such legislation as president. He also supports a national right-to-work law that would repeal all current federal labor law provisions authorizing forced union dues and fees. Unfortunately, his campaign has done little to alert the nation to the dangers of the card-check bill.

Before they cast their votes, the American people ought to be aware of Mr. Obama’s commitment to the passage of a new Wagner Act, and of what the economic consequences of such a law are almost certain to be.

Very much worth a read, READ IT HERE

WSJ: Obama Would Europeanize America

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Another must read from the WSJ today…

The only organization with a worse rating than the Republican president is the Democratic Congress—14% approval, 75% disapproval. But there, too, the Democrats will gain strength. They are expected to increase their majority in the House, and current polling shows that in Senate races Democrats will increase their members from the current 51 (including two independents who caucus with the Democrats) to at least 57. They may even achieve the 60 votes needed to overcome a filibuster.

So where is the new Obama administration likely to take us? Seven things seem certain:

  • The U.S. military will withdraw from Iraq quickly and substantially, regardless of conditions on the ground or the obvious consequence of emboldening terrorists there and around the globe.
  • Protectionism will become our national trade policy; free trade agreements with other nations will be reduced and limited.
  • Income taxes will rise on middle- and upper-income people and businesses, and individuals will pay much higher Social Security taxes, all to carry out the new president’s goals of “spreading the wealth around.”
  • Federal government spending will substantially increase. The new Obama proposals come to more than $300 billion annually, for education, health care, energy, environmental and many other programs, in addition to whatever is needed to meet our economic challenges. Mr. Obama proposes more than a 10% annual spending growth increase, considerably higher than under the first President Bush (6.7%), Bill Clinton (3.3%) or George W. Bush (6.4%).
  • Federal regulation of the economy will expand, on everything from financial management companies to electricity generation and personal energy use.
  • The power of labor unions will substantially increase, beginning with repeal of secret ballot voting to decide on union representation.
  • Free speech will be curtailed through the reimposition of the Fairness Doctrine to limit the conservative talk radio that so irritates the liberal establishment.

These policy changes will be the beginning of the Europeanization of America. There will be many more public policy changes with similar goals—nationalized health care, Kyoto-like global-warming policies, and increased education regulation and spending.

Additional tax advantages for lower and middle income people will be enacted: a 10% mortgage tax credit that would average about $500 per household per year, a $4,000 tax credit for college tuition, a tax credit covering half of child-care expenses up to $6,000 per year, and even a $7,000 credit for purchase of a clean car.

More important, all but the clean car credit would be “refundable,” meaning people will get a check for them if they owe no taxes, which is simply a transfer of income from the government to individuals. In reality this is the beginning of a new series of entitlements for middle-class families, the longer-term effect of which will be to make those families more dependant on (and so more supportive of) larger government. The Tax Policy Center estimates that these refundable tax credits would cost the government $648 billion over 10 years.

These are Mr. Obama’s plans. Meanwhile, congressional Democrats would increase spending for their own interests and favorite programs. More important, the Congress will consider itself more important than a freshman president who has never held an executive position, so they will do what they want and he will have to go along with most of it.

READ IT HERE

WSJ: Obama’s ‘Redistribution’ Constitution

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The left will own the courts. This is why we need to own guns against a government that hates us. The future is very bleak for American under Hussein, Surrender Poodle (Pelosi), and Mormon in Name Only (Reid).

The Wall Street Journal published a piece online today about the ability Obama will have of restocking the courts against the values and wishes of more than half of America’s sleeping conservative population who don’t seem to be interested enough to vote this year (you deserve what you get, but I don’t so go to the trouble of voting against Obama).

One of the great unappreciated stories of the past eight years is how thoroughly Senate Democrats thwarted efforts by President Bush to appoint judges to the lower federal courts.

Consider the most important lower federal court in the country: the United States Court of Appeals for the District of Columbia Circuit. In his two terms as president, Ronald Reagan appointed eight judges, an average of one a year, to this court. They included Robert Bork, Antonin Scalia, Kenneth Starr, Larry Silberman, Stephen Williams, James Buckley, Douglas Ginsburg and David Sentelle. In his two terms, George W. Bush was able to name only four: John Roberts, Janice Rogers Brown, Thomas Griffith and Brett Kavanaugh.

Although two seats on this court are vacant, Bush nominee Peter Keisler has been denied even a committee vote for two years. If Barack Obama wins the presidency, he will almost certainly fill those two vacant seats, the seats of two older Clinton appointees who will retire, and most likely the seats of four older Reagan and George H.W. Bush appointees who may retire as well.

The net result is that the legal left will once again have a majority on the nation’s most important regulatory court of appeals.

The balance will shift as well on almost all of the 12 other federal appeals courts. Nine of the 13 will probably swing to the left if Mr. Obama is elected (not counting the Ninth Circuit, which the left solidly controls today). Circuit majorities are likely at stake in this presidential election for the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eleventh Circuit Courts of Appeal. That includes the federal appeals courts for New York City, Los Angeles, Chicago, Boston, Philadelphia and virtually every other major center of finance in the country.

On the Supreme Court, six of the current nine justices will be 70 years old or older on January 20, 2009. There is a widespread expectation that the next president could make four appointments in just his first term, with maybe two more in a second term. Here too we are poised for heavy change.

These numbers ought to raise serious concern because of Mr. Obama’s extreme left-wing views about the role of judges. He believes — and he is quite open about this — that judges ought to decide cases in light of the empathy they ought to feel for the little guy in any lawsuit.

Speaking in July 2007 at a conference of Planned Parenthood, he said: “[W]e need somebody who’s got the heart, the empathy, to recognize what it’s like to be a young teenage mom. The empathy to understand what it’s like to be poor, or African-American, or gay, or disabled, or old. And that’s the criteria by which I’m going to be selecting my judges.”

On this view, plaintiffs should usually win against defendants in civil cases; criminals in cases against the police; consumers, employees and stockholders in suits brought against corporations; and citizens in suits brought against the government. Empathy, not justice, ought to be the mission of the federal courts, and the redistribution of wealth should be their mantra.

In a Sept. 6, 2001, interview with Chicago Public Radio station WBEZ-FM, Mr. Obama noted that the Supreme Court under Chief Justice Earl Warren “never ventured into the issues of redistribution of wealth and sort of more basic issues of political and economic justice in this society,” and “to that extent as radical as I think people tried to characterize the Warren Court, it wasn’t that radical.”

He also noted that the Court “didn’t break free from the essential constraints that were placed by the Founding Fathers in the Constitution, at least as it has been interpreted.” That is to say, he noted that the U.S. Constitution as written is only a guarantee of negative liberties from government — and not an entitlement to a right to welfare or economic justice.

This raises the question of whether Mr. Obama can in good faith take the presidential oath to “preserve, protect, and defend the Constitution” as he must do if he is to take office. Does Mr. Obama support the Constitution as it is written, or does he support amendments to guarantee welfare? Is his provision of a “tax cut” to millions of Americans who currently pay no taxes merely a foreshadowing of constitutional rights to welfare, health care, Social Security, vacation time and the redistribution of wealth? Perhaps the candidate ought to be asked to answer these questions before the election rather than after.

Every new federal judge has been required by federal law to take an oath of office in which he swears that he will “administer justice without respect to persons, and do equal right to the poor and to the rich.” Mr. Obama’s emphasis on empathy in essence requires the appointment of judges committed in advance to violating this oath. To the traditional view of justice as a blindfolded person weighing legal claims fairly on a scale, he wants to tear the blindfold off, so the judge can rule for the party he empathizes with most.

The legal left wants Americans to imagine that the federal courts are very right-wing now, and that Mr. Obama will merely stem some great right-wing federal judicial tide. The reality is completely different. The federal courts hang in the balance, and it is the left which is poised to capture them.

A whole generation of Americans has come of age since the nation experienced the bad judicial appointments and foolish economic and regulatory policy of the Johnson and Carter administrations. If Mr. Obama wins we could possibly see any or all of the following: a federal constitutional right to welfare; a federal constitutional mandate of affirmative action wherever there are racial disparities, without regard to proof of discriminatory intent; a right for government-financed abortions through the third trimester of pregnancy; the abolition of capital punishment and the mass freeing of criminal defendants; ruinous shareholder suits against corporate officers and directors; and approval of huge punitive damage awards, like those imposed against tobacco companies, against many legitimate businesses such as those selling fattening food.

Nothing less than the very idea of liberty and the rule of law are at stake in this election. We should not let Mr. Obama replace justice with empathy in our nation’s courtrooms.

Mr. Calabresi is a co-founder of the Federalist Society and a professor of law at Northwestern University.

READ IT HERE

OBAMA MUST BE STOPPED!

Video: Escaped The Plantation, Voting McCain

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Perhaps the best speech given during this entire campaign cycle.

The O-Team
More genius by ZO. See more great clips here

The Poor, Unions, and Barack’s Socialism

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If unions existed to actually do what they claim, it wouldn’t be so bad. But the fact of the matter is that, these days, they exist simply to extort and postpone the inevitable free market.

Scary thinking about wealth redistribution and removing self-reliance from the poor to make them dependent on the government (from March ’08)…

John Mistress-and-Love-Child-As-Cancer-Treatment-Comfort Edwards: “People want to know why I continue this campaign for president, why Elizabeth and myself are so committed to this cause, to this crusade. I’ll tell you why. Because I want everybody in this country to have the same chances that I’ve had. I came from a place of having nothing, to having everything. And in today’s America, it is so hard for people to work themselves up. People no longer believe that their children are going to have a better life than they’ve had.”

Sanity break: Uh, if he “want[s] everybody in this country to have the same chances that [he’s] had.” then his subsequent comment “I came from a place of having nothing, to having everything” doesn’t make the case. Did he have systematic hand-outs, socialist healthcare, and union bargaining when he was struggling through law school? Didn’t think so. Much as I think he’s an idiot and a hillbilly, Edwards coming from nothing and being filthy rich now very likely took some doing, and I’m surprised he doesn’t value or subscribe to the path of hard work and determination in crafting a person for success. I think it would be hard not to if you truly went from nothing to everything on your own sweat and hand-built resources. It seems to me that there can be only two reasons why a nothing-to-everything would want others to get a government instituted shortcut (and handouts in the mean time, even if you never get off your tail and take the shortcut).

  1. Now that they have money, they want more power than just money can give. They want political power over people. And rounding up the poor and middle class by pandering to their fears and anxieties, even though it contradicts the politician’s own experience, is easier (over the heads of the poor they think) and more vote-lucrative  than collecting a handful of the rich. Yes, I’m saying Edwards doesn’t give a rat’s tail about the poor. He cares about money, power, tacky houses, and tail on the side, NOT the poor.
  2. Second, perhaps they actually didn’t succeed by their own sweat and effort, but were given a significant shortcut themselves in one way or another. Self-loathing is a very rampant condition among the undeservedly rich (just look at Hollywood), particularly liberal rich.

If he succeeded so much from ambulance-chasing to have a mansion where 14 families could live, I’m not sure where he gets the stones to preach to others about giving to the poor.

For the sake of a rounded argument… here are my reasons not to give shortcuts to the poor…

  1. Andrew Carnegie (read post here)
  2. I shouldn’t live on another man’s work, if I’m able to do my own. This creates self-reliance and self-respect. Give a man a fish, feed him for a day, teach a man to fish feed him for a lifetime, etc.
  3. The joke that is government bureaucracy shouldn’t be the one transacting/handling the sharing.
  4. And last, but certainly above all, is the self-respect one earns from doing it themselves. Give a child a fragile toy and it will be broken in minutes. Make the child earn the toy or help pay for it, and it will last. Simple concept, but Obama is clueless about even these basic principles.

Now the scariest, transparent, and most flatly dishonest lie I’ve heard Obama spew to date…

Barack Hussein Obama: “We are at a crossroads in this country. We are facing some challenges as great as any generation has faced. And we have some fundamental decisions to make about the kind of America that we’re going to build for, not just us, but for our children and for our grandchildren. The notion that we have no responsibilities towards each other, they call it the ownership society in Washington. But in our past there’s been another name for it, it’s been called social Darwinism; every man and woman for him or herself. And it allows us to say that, you know what, if your health care or your tuition rises faster than your wages life isn’t fair. It’s a bracing idea, it’s a tempting idea, it’s the easiest idea in the world to say that we’re all on our own. But here’s the problem, it doesn’t work. It defies our history. It ignores the fact that it has always been government research and investment that’s made advances possible in this country from the railway to the internet. It’s been the creation of a massive middle class through decent wages and benefits, and good public schools that’s allowed us to prosper. It’s been the ability of working men and women to join together in unions that’s allowed our rising tide to lift every single boat.”

You are a very scary human Obama… totally clueless and very very dangerous. We’re sorry for your messed -up childhood and your lack of any sort of identity, but trying to persuade the country toward an irresponsible end is reprehensible…

He says “It’s the easiest idea in the world to say that we’re all on our own. But here’s the problem, it doesn’t work.” Let me take that in two parts…

1. “It’s easy.” Really!? What’s easy is to rob from the upper-middle class and give to the poor and take credit for it in the form of political power. Just a little clue on the taxation in this great land for Obama’s audience who might read this pulled together by Glenn Beck’s researchers…

According to the Tax Foundation, the top 1% of wage-earners in this country pays nearly 40% of the burden (an 11% INCREASE over 1999, when WHO was President? Oh that’s right…Bill Clinton). Not fair? Well, you may be saying, ‘that’s because they have ALL the wealth!’ Wrong again. The top 1% of earners account for just 21% of the total adjusted gross income. Hmm. Come to think of it…you’re RIGHT! That really isn’t fair. They’re paying DOUBLE what they should be. By the way, the top 10% of earners pay 70% of the load. When you get all the way down to the top 50% of earners, they account for 96.4% of the entire tax burden. The next 10% pays 3.6%. And the bottom 40% of wage earners…pay NOTHING. That’s right, nothing. In fact, they pay nothing, and then often get a “refund” (handout) at years end.

2. It doesn’t work.” Regardless of what distorted ideas free-loving mommy and green-card-seeking free-education aspiring daddy instilled, it doesn’t make it true. The free market is what works. Socialism does not, and can not, without a unification of religion. Even then the people must be extraordinarily interdependent and mature. They ALL must be interdependent and mature or it doesn’t work. We’re so far from that (particularly most of the people currently on welfare) that I’d consider it impossible until the Savior returns to round up and take names. Should we try to recreate the Soviet Union in the mean time, thinking maybe it’ll work this time? Let’s not. I guess you were asleep in your Ivy League classes (or simply spoon-fed by radical liberal professors while you were there) but hand-outs create an entitlement society, not accountability. These principles are so basic I can’t seem to wrap my head around how unbelievably ignorant someone would have to be to not understand them. I feel sorry for Obama. He’s truly blind and in the wilderness. Hillary and Edwards are just political opportunists who polarize for power. They manipulate intentionally. I think Obama genuinely thinks he’s right about these things and that makes him most oblivious and dangerous, because his sincere stupidity is going to persuade some of those who don’t think for themselves.