Wisconsin

[AdamA]

Krugman's a deflationist (and a welfare statist) and would probably make a lot of the same points MT makes, but he believes the only way to improve private balance sheets is to use monetary and fiscal policy that may worsen the public balance sheet (which he believe is not very constrained at this point... he uses Japan as an example).  Interesting to see where people's opinions start to differ from each other.

Good point.  Inflation or deflation, more easy money probably won't solve anything. 
Peter Schiff thinks Paul Krugman should return his Nobel prize.  Not sure I agree, but it's very entertaining to listen to schiff rant about it.

[moda0306]

Some things infuriate me about Krugman, but sometimes he makes surprisingly good points.  My main problem is that he seems to put full priority on maintaining (artificially, if need be) full employment at all costs.  He uses employment figures and GDP (as well as benefits for the needy) as almost his only metrics of economic success, even if their all artificial... since anything that keeps someone "productive" for one more day is worth it.

[AdamA]

http://www.huffingtonpost.com/robert-cr ... 26951.html

Here's another interesting take...

Again, not necessarily my opinion...just like hear how people respond.

[Reub]

I am in a federal govt union. They are blinded by their own ideology and partisanship.

[MediumTex]

I am in a federal govt union. They are blinded by their own ideology and partisanship.

I have noticed that about unions I have dealt with.

They typically seem to believe that management is incapable of doing anything intelligent and that the battle lines between labor and management can never be erased.

Even if such beliefs are based on reality (and they usually aren't) such narrow-mindedness in the leadership is always discouraging to me.

Normally, no matter how adverse parties are, there is some common ground, some overlapping of interests, some shared beliefs.  In my view, good leadership is about identifying those areas in which you and your opponent can agree and trying to build something from there. 

[Reub]

From what I have seen in my 29 years of federal service, management is extremely incompetent. They waste billions with a "b" on a regular basis. My union only rescues them from themselves at a price...whether that be better working conditions or higher wages and benefits. My problem with the union is that they are so politically partisan that they create a situation where they disregard what many of their very own members believe. These public protests by public unions are an embarrassment to me. Unions should stay out of politics!

[Maestro G]

In a show of solidarity, Wisconsin police have marched into the state capitol to support the protesters and vow not to expel them!

http://understory.ran.org/2011/02/25/br ... e-capitol/

The clock is ticking on Walker! Boy did this backfire on him!

He should resign now to spare the state the cost of a recall and save Wisconsin some much needed money! Wow!

Maestro G

[Reub]

Changing the subject a little, has any state ever tried to print its own currency in difficult financial times? This would not be to replace the federal greenback, but rather to augment it. For instance, they could pay their state workers a percentage of their wages and pensions in New York State Nubles, or something.

If this were possible, then bankrupt states could engage in their own "QE2's" and print themselves out of debt.

[julian]

The problem is that most states have spent themselves into insolvency which is not good for any of us. Just as the real estate buble hurt everyone, regardless if you participated, the states fiscal issues are huge and will impact us all. No matter what the outcome, the economy will suffer as people are either layed off or have their income cut. Breaking the unions or not, public employees need to face up to the fact the company they work for can no longer afford what they have promised. Similiar to the UAW at GM, they can milk the states for only so long before they will be forced into some type of bankruptcy. Unlike GM, this problem is too big even for Obama. There will be no worker protection at the expense of bond holders. With that said, I would not want to be a muni holder right now. This situation only reinforces the beauty of the PP. Should this situation implode, one of our assets will protect us. The best thing is no one knows which asset will save us. I can make a claim for at least 3 of the 4. If you want to get another bigger topic started, this issue is just the forerunner of the social security scam that will hit us sooner then later. People thinking they can retire at 65 and count on SS are smoking something. We r all living longer & therfore must work longer. Just as HB would say, no one can predict the future but it will be very interesting.

[fnord123]

In a show of solidarity, Wisconsin police have marched into the state capitol to support the protesters and vow not to expel them!

http://understory.ran.org/2011/02/25/br ... e-capitol/

The clock is ticking on Walker! Boy did this backfire on him!

He should resign now to spare the state the cost of a recall and save Wisconsin some much needed money! Wow!

Walker should fire the police immediately, along with their chiefs, call in the sherriffs or if need be the state guard, and hire a new non-unionized police force.  Reagan had the balls to do this with the air traffic controllers, I hope Walker is made of similar stuff.

The job of the police is to enforce the law, not to pick sides in politics. This action is disgraceful on their part.

[moda0306]

Fnord 123,

Does he have the authority to fire police?  Would he stand a chance at reelection if he did?  So do the taxpayers really want all the police fired?  Aren't the taxpayers the ones who have the interest in seeing this budget fixed?  Are we now encouraging our public officials to fire anyone who speaks out against them... holding their jobs hostage?  Do the police not have a right to support who they wish on their own time?  How does their duty as police officers while on the clock have anything with how they choose to express themselves politically on their dime?  If the police were to be out there in support of Walker, not the unions, would you be calling this disgraceful?  Do you think there are enough qualified individuals to fill all those slots?  Will they have the option of organizing or should Walker outlaw the new sheepolice from assembling outside of work?  Do you think we'd have a middle class in this country without unions?  Do you think if they disappeared today we'd sustain a middle class?  

Unions are a natural thing, as are corporations and governments.  Each of which is benefitted through perversions in our society at the expense of freedom and individualism.  Just because the scales are tipped in different ways doesn't mean we should lose all perspective of what we're actually suggesting.

[MediumTex]

You know, the parallels between Wisconsin and Libya are sort of intriguing.

I wonder if Qaddafi has thought about just firing all of the soldiers who are not loyal to him and bringing in scab mercenaries to do the work that the disloyal soldiers originally signed up to do.

[fnord123]

Maestro wrote that the police "vow not to expel [the protestors]."

That means they are not doing their job.  This isn't about their off-duty time - they are free to do whatever they want when they are not on the clock.  However, while they are on the job, they are supposed to follow orders.  If they are given an order to remove protestors, and that order is legal, they must comply.  If they do not, they should be fired on the spot.

Most of the rest of the questions you raised were also asked about the ATC strikes early in Reagan's tenure.  See how that turned out for the answers.

As to the "unions == middle class" argument, I do not think there is strong evidence for it.  That being said, I have no problem with private unions (although I oppose laws like Davis-Bacon or "union shop" rules).  Public employee unions do not make any sense however and should be illegal.

[fnord123]

You know, the parallels between Wisconsin and Libya are sort of intriguing.

I wonder if Qaddafi has thought about just firing all of the soldiers who are not loyal to him and bringing in scab mercenaries to do the work that the disloyal soldiers originally signed up to do.

It isn't clear to me what you are getting at.  One of the reasons Qaddafi has been able to hold on is that he does have a bunch of non-army mercenaries that work for him and his sons.  Contrast this to Mubarak, where the monolithic army disposed of him with ease.

Two different approaches, two different outcomes.  Neither one really speaks to the value of unions in state and local government as far as I can tell.

[MediumTex]

You know, the parallels between Wisconsin and Libya are sort of intriguing.

I wonder if Qaddafi has thought about just firing all of the soldiers who are not loyal to him and bringing in scab mercenaries to do the work that the disloyal soldiers originally signed up to do.

It isn't clear to me what you are getting at.  One of the reasons Qaddafi has been able to hold on is that he does have a bunch of non-army mercenaries that work for him and his sons.  Contrast this to Mubarak, where the monolithic army disposed of him with ease.

Two different approaches, two different outcomes.  Neither one really speaks to the value of unions in state and local government as far as I can tell.

Well, the Governor of Wisconsin basically received support from the police and fire unions which helped him get elected and once elected he looked out for their interests by not including them in his proposed ban on public sector collective bargaining.

Qaddafi, like all good dictators, has presumably taken care of his military people over the years in exchange for them helping him maintain power.  

Now, Qaddafi is facing the loss of support from some of his military, as the governor of Wisconsin is facing the possible loss of support from some members of the police community.  In each case, we have a politician whose rise to power was facilitated by the armed element of each society, with part of those armed elements now potentially deserting the politician over matters of conscience and/or politics.

In Libya they are firing into crowds.  In Wisonsin they are walking around with signs and yelling.  Two different ways of dealing with and expressing dislike for the existing regime.

I just thought the parallels were sort of interesting.

As far as the union angle goes, it's just a mechanism for a group of people to concentrate power a bit more than they would otherwise be able to.  The unions are doing the same thing that the politicians are doing.  As I noted in earlier posts, the whole premise behind public sector unions is sort of flimsy--where are the greedy capitalists that the workers need to be protected from?

[Pkg Man]

Unions are a natural thing, as are corporations and governments.  Each of which is benefitted through perversions in our society at the expense of freedom and individualism.  Just because the scales are tipped in different ways doesn't mean we should lose all perspective of what we're actually suggesting.

Labor unions were originally subject to Anti-trust laws, just like monopolies.  From an economic perspective, there is no difference between the two in the outcome they seek to achieve -- obtain a higher price for what they are selling. 

Unions may or may not be natural, but they are unhealthy for an economy.

[moda0306]

I happen to think that both corporations AND unions are under-enforced when it comes to anti-trust laws, but saying unions are unhealthy for an economy is like saying public corporations are unhealthy for an economy.

Corporations impose many bureaucracies and rigid inflexibilities on their customers and employees just as unions do on their employers.  We all have different wants and needs as employees, employers and consumers, and there's no perfectly efficient way of reconciling those.  Here's one way to look at it.  

Corporations are a group of investors coming together because they think that by organizing they can make more money for themselves than if they go it on their own.  

Unions are a group of employees coming together because they think that by organizing they can make more money for themselves than if they go it on their own.

Both can get too large for an economy's own good.

[Pkg Man]

I agree with you that anti-trust laws are not enforced for corporations as they should be.  If they had been then "too-big-to-fail" would just be a theoretical discussion.

If I have to pay 10% more to buy a car it doesn't matter to me if the higher price was due to price collusion or unionized labor costs being passed on to the consumer.  The effect on my wallet is the same.  So I see both as harmful to the economy.

If two companies get together and decide to set prices for the products they sell they are breaking the law.  If two employees get together, form a union, and decide to set the prices for the products they sell (labor) they are not breaking the law.  But the reality is that in both casses they are doing essentially the same thing, i.e., setting a price that is greater than would prevail under competition.

[moda0306]

It's not always necessarily the same.  The cooperative/collusive behavior is only illegal and undesirable when they get to a point of controlling the market (which we seem to agree happens too often in both the case of unions and some corporations).  If two apple vendors in a crowded marketplace of apple vendors decided to collude and double their prices they'd still lose all their business.  Put those same 2 apple vendors in a group of 3 apple vendors, and you start to get what could be considered "collusion."  Until you approach a monopolistic scenario, collusion is pointless.  So I think your example is comparing apples (2 employees completely subject to the throws of the market) with oranges (2 businesses with market influence).

As it currently stands I think, on average, corporations much more often have this type of near-monopolistic (oligopolistic?) control over a marketplace than labor, organized and unorganized alike.  Obviously there is the UAW and public unions, but I think most of the time the employee has less bargaining power than his/her employer.

[MediumTex]

One of the easiest ways to annoy a monopolist is to create your own monopoly that interferes with his ability to operate his monopoly.

This dynamic is part of the reason that state governments have basically been neutered by the federal government.

[moda0306]

I think there is a balance, depending on industry and job type, of the right size and competition level of both companies, unions, and government... but as MT points out, once monopolistic cohesive bubbles start forming in one of those sectors (think big oil in the 1800's), another bubble tries to form to counteract it (union movement and federal labor laws)... it's all just a race to the bottom at that point, until we're left with a trifecta of bureaucratic, unsustainable, too-big-to-fail, self-fulfilling messes in big unions, big business and big government.

I think of Terminator 2 after the bad guy gets frozen and broken into a million pieces.... where all the little pieces of liquid metal are just running around bumping into each other (perfect competition) and then they start bonding with each other and forming the cop terminator (monopolistic bureaucracy trifecta).  I wonder when the day will be where we freeze and get broken into a million pieces again.

[Pkg Man]

One of the easiest ways to annoy a monopolist is to create your own monopoly that interferes with his ability to operate his monopoly.

This dynamic is part of the reason that state governments have basically been neutered by the federal government.

I think it is more of a case of state governments selling their sovereignty than being neutered by the federals.  They were willing participants at the government trough.

[6 Iron]

Well, the Governor of Wisconsin basically received support from the police and fire unions which helped him get elected and once elected he looked out for their interests by not including them in his proposed ban...

This is inaccurate. The governor was supported by the Milwaukee police and fire unions, but the statewide unions supported his opponent in the election. Governor Walker implied that he did not include police and fire in the ban on collective bargaining for non salary benefits because of his fear of disrupting emergency services, which based on what we have seen in Wisconsin, I would say was a reasonable fear.

[Maestro G]

In a show of solidarity, Wisconsin police have marched into the state capitol to support the protesters and vow not to expel them!

http://understory.ran.org/2011/02/25/br ... e-capitol/

The clock is ticking on Walker! Boy did this backfire on him!

He should resign now to spare the state the cost of a recall and save Wisconsin some much needed money! Wow!

Walker should fire the police immediately, along with their chiefs, call in the sherriffs or if need be the state guard, and hire a new non-unionized police force.  Reagan had the balls to do this with the air traffic controllers, I hope Walker is made of similar stuff.

The job of the police is to enforce the law, not to pick sides in politics. This action is disgraceful on their part.

The only thing that is disgraceful about all this is that Walker is in the "back pocket" of the Koch brothers, and his payback is an attempt to eliminate a basic labor right under the guise of pension reform. This borders on corruption, but of course, this is not unique to Walker.  Once again, a rabid pro business republican trying to resolve enormous fiscal problems on the backs of the working middle class!

Maestro G  >

[Pkg Man]

In a show of solidarity, Wisconsin police have marched into the state capitol to support the protesters and vow not to expel them!

http://understory.ran.org/2011/02/25/br ... e-capitol/

The clock is ticking on Walker! Boy did this backfire on him!

He should resign now to spare the state the cost of a recall and save Wisconsin some much needed money! Wow!

Walker should fire the police immediately, along with their chiefs, call in the sherriffs or if need be the state guard, and hire a new non-unionized police force.  Reagan had the balls to do this with the air traffic controllers, I hope Walker is made of similar stuff.

The job of the police is to enforce the law, not to pick sides in politics. This action is disgraceful on their part.

The only thing that is disgraceful about all this is that Walker is in the "back pocket" of the Koch brothers, and his payback is an attempt to eliminate a basic labor right under the guise of pension reform. This borders on corruption, but of course, this is not unique to Walker.  Once again, a rabid pro business republican trying to resolve enormous fiscal problems on the backs of the working middle class!

Maestro G  >

How exactly do the Koch brothers benefit from elimination of collective bargaining rights over benefits for PUBLIC employees?

Even if Governor Walker is in their "back pocket", I sure hope he is successful.  Even FDR saw no role for public employee unions.