Category Archives: Business

UPDATE III: Bar (State) Monopolies From Extortion (Reagan PATCO Remarks)

Business, Education, Elections, Free Markets, Government, Labor, Socialism, The State, Uncategorized

By the look and sound of the striking educators on the streets of Madison, Wisconsin (here), the kids (plenty stupid in their own right), are not missing much. Chaos theory aside, the public sector was never supposed to be able to strike; that’s a later socialistic privilege they were granted (See “Regulation of unions and organizing.”) The absence of these coercive cretins in the classroom is no loss. Still, The government education cartel should not be permitted to hold taxpayers hostage. Collective bargaining in general ought to be outlawed unless workers and employers are free to associate and dissociate from one another at will. Otherwise, it’s extortion. Here, the monopolist has, in effect, the right to shake down the taxpayer, who has no recourse; cannot opt out of the abusive relationship, or protect himself from the extortionist.

THIS IS THE LAW OF RULE, NOT THE RULE OF LAW.

(To clarify: The only true monopolies are government monopolies. A company is a monopoly only when it can forcibly prohibit competitors from entering the market, a feat only ever made possible by state edict. In the free market, competition makes monopoly impossible. A large market share is not a monopoly.)

I would have no objection to unions were they voluntary, non-coercive associations that looked out for the needs of workers without trampling the rights of other non-aggressive parties.

While we’re meting justice (in theory, at least), government employees, politicians included, should not be allowed to vote. This is because they are paid from taxes garnished by force from taxpayers, and will always vote to increase their own powers and wages. They have always so voted! The other option is that they keep the vote and accept volunteer, unpaid status.

The moochers and the looters are upon us. Moochers “will claim your product by tears” and manipulation. The rioters among them will “take [your product] from you by force.” Both versions have been loosed upon us.

During the Greek wilding, I warned (as many others) that it was a minor event compared to the events that’ll unfold should we quit funding our federal behemoth’s bacchanalia. The sound and fury of the American public sector unions is going to be like Tyrannosaurus (T-Rex) tearing through Jurassic Park.

UPDATE I: Obama waded right into the affairs of Wisconsin, stating superciliously that “the new Republican governor, Scott Walker, [was] launching an ‘assault’ on unions with his emergency legislation aimed at cutting the state budget.” Obama had once before meddled in a state’s affair and was badly burned. Remember the case of the bad ass, race-baiting Harvard professor, Henry Louis Gates Jr.? BHO’s full-throated reaction in that case was in his capacity as the president of Black America (“the Cambridge police acted stupidly,” he asserted, “in arresting somebody when there was already proof that they were in their own home.”)

But Barack wears many hats. And today, he responded to the “oink sector” strike in Madison, Wisconsin, as a union man, a man beholden to “Organizing for America, the successor to President’s Obama’s 2008 campaign organization. It helped fill buses of protesters who flooded the state capital of Madison and ran 15 phone banks urging people to call state legislators.”

UPDATE II (Feb. 20): Larry Kudlow on a “European-style revolt”:

The Democratic/government-union days of rage in Madison, Wis., are a disgrace. Wisconsin congressman Paul Ryan calls it Cairo coming to Madison. But the protesters in Egypt were pro-democracy. The government-union protesters in Madison are anti-democracy; they are trying to prevent a vote in the legislature. In fact, Democratic legislators themselves are fleeing the state so as not to vote on Gov. Scott Walker’s budget cuts.
That’s not democracy.
The teachers’ union is going on strike in Milwaukee and elsewhere. They ought to be fired. Think Ronald Reagan PATCO in 1981. Think Calvin Coolidge police strike in 1919.
The teachers’ union on strike? Wisconsin parents should go on strike against the teachers’ union. A friend e-mailed me to say that the graduation rate in Milwaukee public schools is 46 percent. The graduation rate for African-Americans in Milwaukee public schools is 34 percent. Shouldn’t somebody be protesting that?

UPDATE III (Feb, 22): PEW AND THE PUBLIC. Pew Research cautions that “it is not clear whether the public nationally will support Wisconsin Republicans’ efforts to prevent government workers from unionizing. In the Pew Research survey, which was conducted before the Wisconsin protests drew national headlines, people were asked for their reaction when they hear of a disagreement between a labor union and a state or local government: 44% say that when they hear of such a dispute they side with the unions while 38% say they side with the governments.”

This, even though “organized labor is in a much weaker position today than it was during the air traffic controllers’ strike.” Back in August of 1981, the public solidly supported Reagan’s “reaction to the PATCO (Professional Air Traffic Controllers Organization).” He fired the controllers, and banned the government from ever rehiring them.

WE ARE DOOMED.

Here are Reagan’s memorable remarks on the air traffic controllers’ strike. Note this president’s clear reference to the burden the oink sector imposes on its fellow citizen; notice his allusion to the government’s monopolist position. Reagan was capable of clearly articulating the principles of freedom, and, in this case, he also acted on these principles.

Fire Wisconsin’s government employees.

DiLorenzo Dishes It Out To Subcommittee On Domestic Monetary Policy

Business, Debt, Economy, Federal Reserve Bank, Healthcare, Individual Rights, Inflation

Pearls before swine? Probably. Still, the freedom movement is gaining momentum. First came Randy Barnett’s powerful testimony before the Senate Judiciary Committee (read “Turning Citizens Into Subjects: Why The Health Insurance Mandate Is Unconstitutional”). My good friend Thomas DiLorenzo, Professor of Economics at Loyola University in Maryland, followed. Tom tried to explain to members of the Committee on Financial Services (Subcommittee on Domestic Monetary Policy and Technology) that the “Fed’s monetary policies tend to create temporary and unsustainable increases in employment while being the very engine of recession and depression that creates a much greater degree of job destruction and unemployment.”

Here’s an excerpt from “How the Fed Fuels Unemployment”:

When the Fed expands the money supply excessively it not only is prone to creating price inflation, but it also sows the seeds of recession or depression by artificially lowering interest rates, which can ignite a false or unsustainable “boom” period. Lower interest rates induce people to consume more and save less. But increased savings and the subsequent business investment that it finances is what fuels economic growth and job creation.
Lowered interest rates and wider availability of credit caused by the Fed’s expansionary monetary policy causes businesses to invest more in (mostly long-term) capital projects (primarily real estate in the latest boom-and-bust cycle), and there is an accompanying expansion of employment in those industries. But since the lower interest rates are caused by the Fed’s expansion of the money supply and not an increase in savings by the public (i.e., by the free market), businesses that have invested in long-term capital projects eventually discover that there is not enough consumer demand to justify their investments. (The reduced savings in the past means consumer demand is weaker in the future). This is when the “bust” occurs.
The economic damage done by the boom-and-bust policies of the Fed occur in the boom period when resources are misallocated in the ways described here. The “bust” period is actually a necessary cure for the economic miscalculations that have occurred, as businesses liquidate their unsound investments and begin to make decisions on realistic, market-based interest rates. Prices and wages must return to reality as well.
Government policies that bail out businesses that have made these bad investment decisions will only delay or prohibit economic recovery while encouraging more of such behavior in the future (the “moral hazard problem”). This is how short recessions can be turned into seemingly endless ones. Worse yet is for the Fed to create even more monetary inflation, rather than allowing the necessary economic adjustments to take place, which will eventually set off another boom-and-bust cycle.

MORE.

Obama’s Hate-Your-Boss Hotline

Barack Obama, Business, Economy, Individual Rights, Liberty, Regulation

“Get in the game,” the president instructed U.S. business leaders, in an address to the U.S. Chamber of Commerce today. As Bloomberg.com reported, this audacious president urged business to “support their country by moving cash from the sidelines into the economy,” “hiring more American workers,” and, generally “investing in this nation.” This, as Obama carves greater and greater sections out of the hide of American businesses for the assorted, unproductive oink sectors.

Just the other day, this deeply silly man “launched a new program at the Department of Labor which will refer workers who have complaints about their bosses to a toll free number at the American Bar Association, where they can get a lawyer to work on their case on a contingency fee basis.” (Via Elizabeth MacDonald of Fox Business) Yes, litigation always reduces the costs of doing business, doesn’t it?! What’s not to like in a collaboration between “the federal government and private bar” to promote “worker rights,” already covered by the Occupational Safety and Health Administration (OSHA) and other legislation. This is how Obama is “doing his part to improve the business climate” in this country.

The meek reply to BHO’s demands from Johanna Schneider, “who directs external relations for the Business Roundtable,” will not do. “Jobs will follow demand,” she said. “Unless you see sustained demand for your product or your service, you cannot from a fiduciary standpoint invest in more employees.”

Business leaders will have to learn to speak the language of individual/natural rights, and link the rights of property and freedom of association to prosperity and peace. Unless they sound morally indignant about the violation of their rights, parasitical collectivists such as BHO will continue to make light of and mock the “incredible pressure to cut costs and keep margins up,” as the Idiot-in-Chief put it.

The Liars At Labor

Business, Debt, Economy, Government, Labor

The economic “experts” have a lot riding on the recovery ass. Hence the notion of a jobless recovery, which is a lot like a housewarming for the homeless.

“The unemployment rate fell by 0.4 percentage point to 9.0 percent in January,” reports the U.S. Bureau of Labor Statistics. However, at 64.2%, the labor force participation rate … is now at a 26-year low, the lowest since March of 1984. The “labor force as a percentage of total population” has plummeted.

The reason for the “drop” in the unemployment rate, as the labor force shrinks from 86.2 million to 83.9 million—or 2.2 million in one year!—is the rise in the number of discouraged individuals who’ve left the labor force.

The more accurate, less finessed, number from the Liars at Labor is the U-6, which includes the unemployed and people who would like to work, but who have not looked for a job recently, as well as those involuntarily working part-time. “Not-seasonally adjusted U-6 surged from 16.6% to 17.3%” in February.