Michigan & Labor Unions, Myth Versus Reality

The most fundamental fact about labor unions is that they do not create any wealth. They are one of a growing number of institutions which specialize in siphoning off wealth created by others, whether they are businesses or the taxpayers.

There are limits to how long unions can siphon off money from businesses without facing serious economic repercussions.

Thomas Sowell, Union Myths, NRO, 8 March 2011

Congrats to Michigan for passing a right to work law. No person should ever be forced to pay union dues as a condition of working in their chosen field. It is nothing more than state sanctioned indentured servitude.

The most oft repeated myth about labor unions are that they created the middle class and that they protect the rights of workers. The reality is that our increasing productivity since the civil war created the middle class, and labor unions today are nothing more than parasites on the economy, in addition to being the piggy bank for the left. Labor union numbers have been dwindling for half a century because of market realities, and without government mandates, they will go extinct. There is a reason GM and Chrysler went bankrupt, while foreign car manufacturers with plants in the U.S. did not. And can you say "Twinkies?"

The great economist Milton Friedman gave a short lecture on unions and their lack of any role in the free market several years ago. It is worth taking a few minutes to watch.



And just as a reminder, the real threat to our nation today comes not from the dying private sector unions that ultimately are governed by markets, but public sector unions that are not so governed. To see the effects, one need look no further than California.

Updates & Related Posts:

Powerline notes that the NYT's coverage of the Michigan right to work law omits some of the relevant facts - such as all the ones that would make the unions look bad.

At NRO, a Hillsdale Prof. gives a short history of Right-To-Work, Unions & Trust-Busting.

From Michelle Malkin, a primer on union thuggery in the age of Obama.

From Nice Deb, the union thug violence in Lansing and the left's effort to cover-up, calling it a "false flag" operation. Many links.

Via Instapundit, Byron Preston at PJM notes that the MSM has been wholly silent on the violence, hanging their hat on the canard that the video taped violence by union thugs was a false flag.

From NRO, a discussion of Michigan's modest right-to-work reform and an analysis of why the unions and the Dems are ready to go to war over it:

Democrats are panicked by the spread of right-to-work reforms because the mandatory deduction of dues from the paychecks of public-sector employees provides the party’s financial lifeblood. There are not that many UAW members or Teamsters in the country, but there are legions of bureaucrats, school workers, and surly DMV clerks — and, through its relationship with the public-sector unions, the Democratic party has a direct pipeline into the pockets of practically each and every one of them. The shrieking in Michigan isn’t about workingmen’s wages, but campaign coffers. That is why there is blood.

Tweet

Read More...

Summary only...

The Constitution - - The Last Refuge Against A Scoundrel

We have been witness over the past several weeks to White House strong arming of businesses the likes of which have previously been unknown in this country. And now if appears Obama has crossed a threshold that the Constitution forbids.

First there are the TARP loans. The government has refused banks the ability to repay them. Instead, the Obama administration floated a plan, still under consideration, of de facto nationalizing the banks by converting bank TARP loans to common stock. One would think it could not get worse than that, but one would be wrong.

Obama, in proposing to reorganize the auto manufacturers, wants to place his major constituency, big Labour, at the front of the line when it comes to an ownership stake in GM and Chrysler. The end result of such a move is that secured creditors of the two companies would suffer a relative loss far in excess of that which would be suffered by the unions. Not only has the Obama plan been set up to show blatant favortism in contravention of the commercial code, but Obama and his crew were publicly criticizing - and privately threatening - the secured creditors holding out against this plan. Powerline, refering to this as banana republic capitalism, has the whole story. And indeed, there is nothing to distinguish this act of Obama from similar extortions of property by Hugo Chavez in Venezuela or . . . well, pick your favorite dictator.

Fortunately, it seems that the creditors are fighting back. At least one attorney, Thomas Lauria, has gone public about the threat to the entities he represents made by the Obama administration - to use the White House Press Corps to destroy them in the eyes of the public. Today, Lauria has filed a brief challenging the proposed acts of Obama based on the Fifth Amendment. Specifically, he cites to a 1935 case, Louisville Joint Stock Land Bank v. Radford, that dealt with a provision of the New Deal that would have acted to strip a secured creditor of the value of his security by government fiat. The Supreme Court held that, regardless of the government's compelling interest in responding to the economic chaos of the depression, such an act violated the 5th Amendment prohibition against taking private property without just compensation. It is a case dead on point. Hot Air has the story.

I will assume, without looking it up, that this case is still good law. It's interesting to note that this case fell two years prior to FDR's "court packing" scheme. FDR was tired of being stymied by a Supreme Court that found much of his "New Deal" legislation unconstitutional. In 1937, FDR proposed to expand the number of Justices on the Supreme Court and pack the Court in his favor. FDR lost the battle and the legislation failed. That said, FDR won the war. The Supreme Court got the message and began regularly defering to FDR's wishes and taking congressional findings at face value.

Read More...

Summary only...

Obama Finally Finds Deregulation He Can Support

From telecommunications to electricity to banking to accounting, [Obama, during the Presidential campaign,] blamed the failures as a product of markets out of control, with not enough government regulations to rein in "an ethic of greed, corner cutting, insider dealing, things that have always threatened the long-term stability of our economic system."

According to Obama, deregulation, even under the Clinton administration, produced an “'anything goes' environment that helped foster devastating dislocations in our economy.” The proper government regulation can prevent the ''chaotic, unforgiving” nature of capitalism.

- John R. Lott Jr., Obama Bitter About Free Markets

While our Moral Compass In Chief may want to vastly expand the reach of government regulation in most every area of our economy and life, we now know that there is at least one area where he feels that the people involved are sufficiently upstanding, law abiding and with a proven track record of honest and fair dealing that deregulation is warranted.

Its Big Labor.

This from the Washington Times:

The Obama administration, which has boasted about its efforts to make government more transparent, is rolling back rules requiring labor unions and their leaders to report information about their finances and compensation.

. . . The regulation, known as the LM-30 rule, was at the heart of a lawsuit that the AFL-CIO filed against the department last year. One of the union attorneys in the case, Deborah Greenfield, is now a high-ranking deputy at Labor, who also worked on the Obama transition team on labor issues.

Labor officials declined to say whether she played a role in the new policy, noting that Ms. Greenfield is abiding by all government ethics rules. In court filings, she and other union attorneys called the 2007 rules "onerous."

The Labor Department also is rescinding another key labor financial disclosure regulation. The expansion of the so-called LM-2 rule, approved during the last days of the Bush administration, requires unions to report more information about finances and labor leaders' compensation on annual reports.

Critics worry that the rollback of union reporting requirements will keep hidden potentially corrupt financial arrangements aimed at rooting out corruption, but unions say the Bush administration reporting rules were unfair and burdensome.

. . . Under the Bush administration, the department defended the rules in court. In court filings, government attorneys argued that the new rules were needed to "bring to light a wide variety of financial transactions and arrangements - whether proper or improper - that pose conflicts of interest arising from the relationships between unions, their officers and employees, employers and businesses." . . .

Read the entire article.

Read More...

Summary only...

Watch This

Democrats in Congress, including Obama who has explicitly embraced a plan to pay off Big Labor by enacting the Employee Free Choice Act, a bill that takes away the right to secret ballot in the decision to unionize. It is incredibly anti-American and a virtual invitation to intimidation of American workers by unions. Glad to see it getting a small part of the attention and derision it deserves.

(H/T Hot Air)

Read More...

Summary only...

Character & Principles

"Character" is the sum total of all the choices we make in life.

The real test of character comes when the choices are difficult. They come when acting in accordance with principles such as duty, honor, country, honesty, or loyalty, means foregoing some benefit.

At the opposite end of the spectrum are those who fail the test of character. These are the people who weigh each decision on the scales of expediency and in disregard of all but personal ambition or personal gain.

If you needed more evidence that Obama's sole defining characterisc is ambition and yet another example that he views the articulation of other principles as merely words on a teleprompter, here it is.
_____________________________________________________________

First, the soaring rhetoric and clear statement of principles from the One:



But that was two months ago, when pretending to hold these principles allowed Obama to claim the moral highground without suffering in the balance of expediencies. Today, the LA Times is reporting that the Obama campaign is now seeking precisely the types of donations he eschewed so stiringly above. His campaign is doing it on behalf of the DNC to fund his convention:

Facing a large deficit in the Democratic National Convention budget, officials from Barack Obama's campaign have begun personally soliciting labor unions and others for contributions of up to $1 million. In exchange, donors could get stadium skyboxes for Obama's acceptance speech and other perks.

Obama has regularly criticized politicians seeking large donations outside the framework of campaign finance regulations -- so-called soft money -- while touting the virtues of relying on small donations.

But campaign officials last month reluctantly decided they had to take a hand in raising large donations from individuals, unions and corporations. Some of the donors get special bundles of perks, including use of the party suites at Denver's Invesco Field, as well as special policy briefings by Obama advisors, choice hotel rooms and party invitations.

What caused the shift was evidence that the Denver Host Committee was having trouble raising the estimated $60 million in cash and in-kind contributions needed to fund the convention, which runs Aug. 24-29.

Partly as a result of the boost from Obama's campaign, most of the goal has now been met, said Steve Farber, the Denver lawyer helping to lead the effort. In mid-June, the Denver Host Committee's fundraising team reported that it was $11.6 million short of reaching a funding goal.

In an example of the campaign's late-innings effort, a very senior Obama campaign official called the political director of one of the largest labor unions about two weeks ago and asked for a $500,000 contribution on top of a similar amount that had been committed just a few weeks before, according to the union official.

. . . A spokesman for the campaign, Hari Sevugan, declined to say whether Obama himself had become involved in these fundraising efforts or to confirm any details of work done by others from the campaign.

"We are working together with the convention committee on many levels to ensure a successful convention this year," Sevugan said. "As we announced earlier, moving forward, one of Sen. Obama's reform priorities will include changes in the way party conventions are funded to assure they can be run without dependence" on soft money.

Donations made to convention host committees are not covered by federal donation limits. As a result, corporations and wealthy individuals can donate unlimited sums under the premise that the committee is promoting civic pride and economic growth, not a political cause.

However, the leadership ranks of these local fundraising committees are dominated by political partisans and elected officials.

. . . The Service Employees International Union has already committed $500,000 to the Democratic convention and an undisclosed sum to the Republicans.

In addition, a new labor consortium it belongs to, Change to Win, has been asked to donate. Other unions that are members of Change to Win, including New York-based Unite Here, have made unspecified donations to the Democrats' host committee. The American Federation of Teachers donated $750,000 last month.

. . . Use of Invesco Field skyboxes as a fundraising tool provides a positive ending to what was at first considered a financial headache. When Obama announced that he planned to deliver his acceptance speech at the outdoor stadium, campaign officials estimated that it would add about $6 million to the convention's cost. Since then, the sale of the $1-million packages has been highly successful, with many of the boxes selling out.

Those paying the $1-million price tag will get skybox tickets for 25 people and an additional 50 regular tickets to Invesco Field.

What's more, donors will get occasional access to skyboxes at the Pepsi Center, where the rest of the convention will take place. Donors will also have access to private parties and receptions.

Obama spokesman Sevugan insisted that none of the campaign's involvement with large-dollar convention funding indicated a weakening of Obama's resolve to reform the system.

Sevugan said: "In addition to his commitment to reform the convention funding process, Sen. Obama has also taken unprecedented steps to curb the influence of money on the political process in refusing contributions from PACs and Washington lobbyists, money raised by them, and asking the DNC to do the same -- all steps that John McCain refuses to take. . . .

Read the entire article. The hypocrisy of any claim to be honoring Obama's pledge after admitting to actively soliciting huge soft money donations is of such dimension as to transgress into obscenity. As Hot Air asks, "[c]an anyone remember a reform pledge Barack Obama hasn’t broken?"

Read More...

Summary only...

Another Obama Dichotomy

There are enough dichotomous issues about Obama to fill a laundry list, with the most discordant being Obama’s claim to be a post racial candidate while adopting as a preacher and mentor for twenty years the lunatic racist Rev. Wright. Then there is Obama’s claim to be able to heal the bi-partisan divide of the country while never having once in his career attempted to reach across the aisle on an issue of bi-partisan controversy. And there is Obama’s claim that he will clean Washington of special interests even as he panders shamelessly to Democratic special interests for their support. In that latter category today, there is news that Obama has agreed to work for release of the Teamsters Labor Union from federal oversight for corruption and ties to organized crime - an oversight the Justice Dept. has refused to end - thus earning the Teamsters' support.

Obama’s claim that he will clean Washington of special interests is hypocrisy writ on a grand scale. He has pandered to most Democratic special interests during his term as Senator, there being priot to today two particularly egregious examples. There was his recent support for the tort bar over our national security on the issue of immunity from prosecution for the telecom industry. And there was his vote to pay off Big Labor with the jaw droppingly anti-democratic and Orwellian-named Employee Free Choice Act. Add to that a third example. In order to gain the support of the Teamsters – a union whose history is rife with corruption and Mafia influence – Obama has agreed to seek the end of federal oversight of the Teamsters instituted in 1992 to try and clean up the union. This today from the WSJ:

Sen. Barack Obama won the endorsement of the Teamsters earlier this year after privately telling the union he supported ending the strict federal oversight imposed to root out corruption, according to officials from the union and the Obama campaign.

It's an unusual stance for a presidential candidate. Policy makers have largely treated monitoring of the International Brotherhood of Teamsters as a legal matter left to the Justice Department since an independent review board was set up in 1992 to eliminate mob influence in the union.

Sen. Obama's rival for the Democratic nomination, Sen. Hillary Clinton, has declined to take a stance on Teamsters oversight. During his eight years in office, President Bill Clinton took no action to end the special board. Democratic presidential nominees in 2000 and 2004 -- Al Gore and John Kerry -- didn't address the issue, according to Teamsters officials.

Neither Sen. Obama nor Teamsters President James P. Hoffa has spoken publicly about easing up federal oversight, a top priority for Mr. Hoffa since he became union president in 1999. On the campaign trail, Mr. Hoffa stresses Sen. Obama's criticism of the North American Free Trade Agreement as the big factor in winning the 1.4-million member union's support.

But John Coli, vice president for the Teamsters central region, who brokered the Teamsters endorsement, said Sen. Obama was "pretty definitive that the time had come to start the beginning of the end" of the three-member independent review board that investigates suspect activity in the union. Mr. Coli said that Sen. Obama conveyed that view in a series of phone conversations and meetings with Teamsters officials last year.

Obama spokesman Tommy Vietor confirmed the candidate's position in a statement to The Wall Street Journal, saying that Sen. Obama believes that the board "has run its course," because "organized crime influence in the union has drastically declined." Mr. Vietor said Sen. Obama took that position last year.

. . . And, board members say, it would be extraordinary for a president to try to alter the oversight. "Presidents very rarely try to tell the Justice Department what is the right thing to do in matters of judicial administration," said William Webster, a member of the board since 1992 and a former director of both the Federal Bureau of Investigation and the Central Intelligence Agency.

The Teamsters' backing has been particularly important for Sen. Obama, who is struggling to win over the white working-class voters who dominate the union's core membership of truckers and warehouse and port workers.

Read the entire article. And Obama is going to clean up special interests? The divide between Obama’s words and his deeds is not merely a gap, it is an immense canyon. Is there anything that this man has said that is backed by his deeds?

Read More...

Summary only...

Obamanations on Defense & the Economy

This is an undated video with Obama's plan for a real minimizing of our defensive capabilities. Coupled with his plans to chat over tea with Iran, Obama portends to be a disaster not only to America's national security, but to its ability to defend itself. (H/T Powerline)

And there is this from WSJ on Obama's plan to "end the tax breaks for companies who ship our jobs overseas, and we will give those breaks to companies who create good jobs with decent wages right here in America." It reads like a blueprint to unionize all major businesses in America and it demonstrates no understanding of economics:

Mr. Obama's proposal would designate certain companies as "patriot employers" and favor them over other, presumably not so patriotic, businesses.

The legislation takes four pages to define "patriotic" companies as those that: "pay at least 60 percent of each employee's health care premiums"; have a position of "neutrality in employee [union] organizing drives"; "maintain or increase the number of full-time workers in the United States relative to the number of full-time workers outside of the United States"; pay a salary to each employee "not less than an amount equal to the federal poverty level"; and provide a pension plan.

In other words, a patriotic employer is one which fulfills the fondest Big Labor agenda, regardless of the competitive implications. The proposal ignores the marketplace reality that businesses hire a work force they can afford to pay and still make money. Coercing companies into raising wages and benefits above market rates may only lead to fewer workers getting hired in the first place.

Under Mr. Obama's plan, "patriot employers" qualify for a 1% tax credit on their profits. To finance this tax break, American companies with subsidiaries abroad would have to pay the U.S. corporate tax on profits earned abroad, rather than the corporate tax of the host country where they are earned. Since the U.S. corporate tax rate is 35%, while most of the world has a lower rate, this amounts to a big tax increase on earnings owned abroad.

Put another way, U.S. companies would suddenly have to pay a higher tax rate than their Chinese, Japanese and European competitors. According to research by Peter Merrill, an international tax expert at PriceWaterhouseCoopers, this change would "raise the cost of capital of U.S. multinationals and cause them to lose market share to foreign rivals." Apparently Mr. Obama believes that by making U.S. companies less profitable and less competitive world-wide, they will somehow be able to create more jobs in America.

He has it backwards: The offshore activities of U.S. companies tend to increase rather than reduce domestic business. A 2005 National Bureau of Economic Research study by economists from Harvard and the University of Michigan found that more foreign investment by U.S. companies leads to greater domestic investment, and that U.S. firms' hiring of more offshore workers is positively, not negatively, associated with the number of American workers they hire. That's in part because often what is produced overseas by subsidiaries are component parts to final, higher-value-added products manufactured here.

Mr. Obama is also proposing to raise tax rates on affluent individuals, as well as on capital gains and dividends. This would also lead to more capital and jobs leaving the U.S. The after-tax return on U.S. investment would fall appreciably if these tax hikes were adopted, and no amount of tax-credit subsidy will keep capital from fleeing to lower tax jurisdictions.

If the U.S. didn't impose the second highest corporate income tax rate in the world, companies would have less incentive to move jobs overseas. Rather than giving politically correct companies a 1% tax credit, it makes more sense to reduce the U.S. corporate tax rate for everyone -- by at least 10 percentage points to the global average.

Economists have long understood that companies don't really pay taxes; they merely collect them. A study by the American Enterprise Institute has shown that U.S. workers bear the cost of the corporate income tax in lower wages and salaries. To borrow Mr. Obama's language, what's really unpatriotic is the 35% U.S. corporate tax rate.

Read the entire article.

Obama scares me. His presidency would yank our nation deep into socialism, reduce our defense, and see an explosion of radical Islam. We are at a crucial moment in history. There was only so much damage a Jimmy Carter presidency could do, occurring when it did. Obama portends to be far worse than Carter, and his candidacy comes about at a time when he really could drive America into a second-class state.

Read More...

Summary only...