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  • Retro-Laborite Federalism? The Key to A Democrat Comeback?

    Posted by Chicago Boyz Archive on November 16th, 2004 (All posts by )

    Well the Democratic sulking is ending, and the thinking and planning and strategizing is beginning in earnest. Tom Geoghegan, one of the sharper minds and better writers amongst the lefties, has a fascinating piece in The Nation. It is his proposed game plan for the Democrats post-election. He says, Take It to the Blue States. Geoghegan concedes that he is miserable that Bush won, but he is not sitting around crying over spilt milk. He is trying to formulate a counter-attack for the Ds.

    Geoghegan’s long-time belief has been that the way for the Democrats to regain power is to restart the Labor Movement. His older book Which Side are You On? is a good read. I notice it is not on Amazon, sadly. But you can get it for $2.87, literally, on www.bookfinder.com. Worth reading. So, how to do this?

    Geoghegan says: Make Blue State elections about wages and benefits, with the Republicans as the stingy bad guys. His bet is there are enough voters who are wage-earners that this would work. His proposals include the following. ” Let people, individually, one by one, sign up as union members, and not only as part of a ‘bargaining unit.'” Make this attractive by offering counseling and legal advice to union associates when they are fired or demoted. If this were popular, it would put a large population in touch with organized labor who are nowhere near it now.

    Next, and this is rather ingenious, Geoghegan says repeal the ancient common law rule of employment at will, which means that the basic rule is that an employee can be fired without cause. Have Blue State legislatures pass a law that says simply: “Nobody can be fired, except for just cause.” The purpose:

    Any law in a Blue State that knocks out employment at will would do more for organizing in that Blue State than eking out a win over Bush and the right. How? Simple. It bulletproofs the people who want to join a union. When the boss tries to bust a union by firing Norma Rae without cause, she can go to court. Get a jury. Damages. Even an injunction. Contempt. With this law, if we had organizing drives, we could get some cover for our people. If poor Norma Rae is fired now, all we can do is file charges with the NLRB. If we prove antiunion motive, maybe the board will act. There are no sanctions and no discovery, and it takes forever. Believe me, it would be much easier, and worse for employers, to go into a court under a state law and take depositions. As we lawyers like to say, let’s poke around their house.

    Geoghegan also suggests that the Democrats are too vague and too scared to just throw some hard punches when they claim to be “for working families” or “for labor”. The Democrat needs to be concrete and specific. Mandatory paid maternity leave, three months. Mandatory paid vacation, one week annually. Mandatory four paid sick days annually. Mandatory severance pay, one week for every year of work. Now that is specific. Tangible transfers of money from employers to employees, by law, in the Blue States. Grab the boss by the ankles, turn him upside down, and shake the money out of his pockets.

    Geoghegan wants to make this program the centerpiece of the Democrat resurgence: “Let’s plan, now, for 2006. In every Blue State, we should have each new benefit, separately, with a separate box, on the voter’s Blue State ballot. Paid maternity leave. Paid vacation. Paid sick leave. Real severance pay.” He goes on:

    Oh yes, be sure to say: We will give assistance to small business. Then maybe, after a while, go to paid maternity leave of four months. Same with vacation. Let’s start with seven days. Then maybe go to ten. And what will the GOP say, No? Let them say no. Let the Heritage Foundation scream. We want the screaming so loud, it wakes up people in the pews. Let the Republicans go to the voters and say no. Let’s have a big, noisy battle in every one of the Blue States. I can hardly wait.

    His conclusion is that millions of voters would realize that they were Democrats after all.

    This is an interesting program. Possibly one that could be effective for the Democrats. Especially if we are in a recession by 2006. I think the maternity leave provision would be popular and pass easily in Illinois, for example. There are people who have agreements with their employers about some amount of maternity leave, but they don’t dare take it all. If it were a matter of law, more people would take the whole thing. This would unite white collar and blue collar workers I think repealing employment at will would be very popular. I suspect most people don’t even know this is the law and would be outraged if they did. These proposals may have particular appeal to some lower income workers who might be with the GOP on the war or other issues, Hispanic voters in particular.

    The Democrats have lost two elections in a row fighting on some vague populism, “I’ll fight for you”. I think I was not alone in scratching my head over what that actually meant. They could do worse than adopting Geoghegan’s approach over the next four years, and coming out with a specific, gloves-off, 1930s style populist Laborite anti-business platform.

    What have they got to lose? At least both sides would know for sure what they are arguing about.

    (Jonathan and I had an argument about this article. I think it could be politically effective. He thinks it would be a big failure, politically.)

     

    36 Responses to “Retro-Laborite Federalism? The Key to A Democrat Comeback?”

    1. ginny Says:

      Is it just me or did a lot of voters listening to a billionaire candidate backed by the money of Soros and the Oracle of Omaha and the big spenders from Hollywood and all those other populists out there talking the populism talk have trouble seeing them do the populism walk?

      If this were really all that popular why didn’t, say, Kucinich do better? Or Nader?

      Isn’t he under the impression that all business is big business?

      I figure we have those little petri dishes over in Europe and we can check in every once in a while and see what’s growing. If it is their economy and not their unemployment rate, their standard of living and not their crime rate – well let’s learn from them. Right now, do we want to trade our unemployment rate for France’s?

    2. Jonathan Says:

      What does Geoghegan think the Democrats have been trying to do for decades in the states they’ve controlled? The main reason they haven’t been able to implement his or similar policies is that too many voters understand that such measures drive up costs and encourage businesses to relocate (and take jobs) to friendlier environments. Look at California, whose high taxes and burdensome regulations, some of which resemble Geoghegan’s recommendations for workplace paternalism, have driven huge numbers of businesses and workers to relocate in places like Arizona and Nevada. California’s lousy business (and hence employment) climate had not a little to do with the election of a pro-business Republican governor. This pattern of exported businesses and jobs is also evident in other high-cost Democratic states, like NY, which has (to cite just one industry) exported many of its financial jobs to less costly places. Somebody will have to pay for Geoghegan’s programs. Does he think voters are too stupid to believe that it won’t be them?

      There’s also a fundamental tension between reality and Geoghegan’s hoary socialist notions of adversarial work relations between bosses and workers. It’s no longer 1933: modern work roles tend to be less hierarchical, a much smaller proportion of workers is unionized (because unionization doesn’t make sense for them, not because workers haven’t been organized effectively) and an increasingly large proportion is self-employed. Geoghegan’s program is not merely unattractive to small-business and self-employed people, it’s overtly hostile. It can only help the interests of some workers by hurting others. It’s bad politics as well as economics.

      Socialism is dead. Maybe one day the Democrats will realize that, but until they do they’re going to have difficulty making progress with a population that is increasingly interested in making its own decisions, whether about work, schools, medical care, personal investments or retirement accounts. Bush, whatever his flaws, understands this, particularly the ownership stuff, which is increasingly important. The Democrats don’t seem to have a clue. They are beating a dead horse and Geoghegan wants them to beat it harder. That might work in a few economically underperforming states that have made themselves disproportionately Democratic by driving productive people away, but it won’t work nationally. Democrats would do better to challenge Republicans on civil liberties, digital property rights, and other issues where the Republicans are vulnerable and alternative policies wouldn’t necessarily drive up everyone’s costs.

    3. Chris Hebert Says:

      As yogi would say, it’s deja vu all over again! We’ve already seen this put to practice in Europe. Now you can load up the car with the wife and kids on your newly expanded vacation entitlement and …be blocked from getting on the autoroute by pissed-off truckers like in France. Or, you can watch your pharmaceutical industry, once the world’s largest producers of drugs (1960) end up with not one pharmaceutical company in the top 15! In Switzerland (where I live) the GDP growth dropped in 2001 to about 0.8%, to 0.2% in 2002, and to -0.3% in 2003. Go ahead, Geoghegan, make my day!

    4. Ana Vasconcelos Says:

      A brazilian writer once said that when an idea gets very old it moves to Brazil.
      It seems it is moving to the blue states.
      Ana Vasconcelos

    5. spongeworthy Says:

      This guy couldn’t care less if it’s untenable, he only wants to dupe the rubes into turning every red state into New York.

      One thing about New York is that we have a tremendous underground economy here, partly to bypass some of the restrictive employment laws. The costs of that bleed into the human services budget since these off-the-books workers are technically poor people and use a lot of services.

      Once again, the Left plans to buffalo the working man into buying into what we all know is just another step toward a welfare state. We’re too smart for you, Chairman Mao!

    6. Lex Says:

      “This guy couldn’t care less if it’s untenable, he only wants to dupe the rubes into turning every red state into New York.”

      Nope.

      I know him well. He believes in it. He thinks its more than tenable. He thinks it is the way to raise wages for middle class people. Anyway, he is saying do this in the Blue States, not the Red ones.

      “fundamental tension between reality and Geoghegan’s hoary socialist notions of adversarial work relations”

      Nope.

      He’s a labor lawyer. In his practice he constantly sees workers who’ve been screwed by their employers in one way or another, sometimes leagally actionable, sometimes not. The employer-employee relationship will always have a zero-sum element to it, and employers routinely try to get the bottom line bigger by screwing people of out their wages, or making them work in dangerous or dirty conditions or not paying them overtime or any number of other ways. Nothing hoary about it. The incentives are there to do this for managers and they do it when they can get away with it. That is part of capitalism. It happens all time.

      I’d like to hear the Republican argument to the voting public of Illinois why we must maintain employment at will. So it is easier to fire people, of course. Do most voters like the sound of that? We may get to find out.

    7. Robert Schwartz Says:

      Geoghegan and, I think, Thomas Frank (Wassa Matta Wit Kansas), both seem to be operating out of a very deep nostalgial time warp. They really really want it to be 1934 again.

      At least Geoghegan is trying to grapple with the problem that there will never be another Rouge Works again. But wishing and hopping won’t make it so.

      Next.

    8. Shannon Love Says:

      Lex,

      “I’d like to hear the Republican argument to the voting public of Illinois why we must maintain employment at will.”

      They won’t have to. More and more people have experience from the employer side of the equation. They understand just what an administrative nightmare it would be. A wide swath of electorate now understand that such laws increase labor cost, depress employment and cause job flight.

      Simply promising to play economic Santa Claus won’t work anymore. To many people are now aware that somebody has to pay for gifts Santa brings.

    9. Shannon Love Says:

      Another thought,

      If one wanted to revitalize unions and to create more support for the Democratic party, the best strategy would be to weaken labor laws. Many people don’t join unions and don’t mind voting for Republican because they get protections from general law that once only labor unions provided. Reducing the default legal protection would drive more people to join unions.

    10. Ken Says:

      “I’d like to hear the Republican argument to the voting public of Illinois why we must maintain employment at will. So it is easier to fire people, of course. Do most voters like the sound of that? We may get to find out.”

      I like the sound of that. When my kids start out, how in the Hell are they going to convince an employer to take a chance on them, thin resume and all, if the employer’s stuck with them semi-permanently after they’re signed on?

    11. Lex Says:

      “More and more people have experience from the employer side of the equation.”

      A majority? I wonder.

      I’m not sure this is time warp stuff.

      What I really wonder is if the Democrats will actually try some very specific proposals like these, rather than the vague, substanceless populism ala Gore and Kerry.

      They won’t stay in a funk forever. They are going to come back with something, and they don’t seem to be in the mood for a DLC approach.

    12. Jonathan Says:

      Anyway, he is saying do this in the Blue States, not the Red ones.

      But the more these kinds of policies are implemented in blue states, the more businesses, jobs and workers flee to red states. That’s empirically what happens. Sure, that’s a way to create larger blue majorities in blue states (as may be happening), but the people who stay behind are better off only if they are relatively uncompetitive as workers or are govt clients (govt employees, social workers, etc.). And in the long run, everyone in these states will lose, as people are losing in Europe, because they will be uncompetitive in the global business environment that everyone now lives in. Uncompetitiveness means lower wages, higher costs, higher govt expenditures (all those subsidies), but lower tax receipts. That’s a politically unsustainable combination, IMO.

      He’s a labor lawyer. In his practice he constantly sees workers who’ve been screwed by their employers in one way or another, sometimes leagally actionable, sometimes not.

      Everyone is always trying to screw everyone else. That’s human nature. Workers and poor people are better protected in a competitive business environment that provides ample alternatives than in a cossetted welfare state, which offers one flavor of “protection” at high cost, take it or leave it. And workers and poor people, who can read and surf the ‘Net like anyone else these days, increasingly know it. At least, I wouldn’t bet politically against them knowing it. And it’s not difficult to make a strong case that all of this socialist baggage increases unemployment. The Republicans are often incompetent at making that case, but it is theirs to make because it is true. Geoghegan’s notion that the minimum wage, for example, is so self-evidently a good idea that Republicans do not know how to counter it is so clearly false as to be fantastic.
      Also, unions today tend to be corrupt rackets coasting on their reputations from the old days — kind of like the mainstream press. For every tale of employment woe in which the union sticks up for the downtrodden employee, there are numerous cases of intimidation and violence by union people trying to stifle the opportunity of nonunion workers. Not to mention gross corruption and financial mismanagement on the part of union managements that is reminiscent of the UN (google “Diplomat hotel”, for one example). Methinks the union case is going to be a tough sell.

    13. Spoilt Victorian Child Says:

      No one ever went broke, etc.

      And while Geoghegan likely does believe in it, that’s clearly a secondary concern when considering whether or not an idea is politically viable.

      One thing that I do agree with him on is the need to hammer away at very specific issues. “Fire at will,” for example. When I asked friends why they were voting for Kerry, they nearly all said something like “abortion,” or “the environment,” or “stem-cells,” or “the war.” But these are big, nebulous issues, and I think most of them didn’t really know what they were supporting or why. (I should note that I voted for Kerry, so that you don’t simply think I’m making fun of them.) Clearly that sort of confusion makes it very difficult to support a candidate with passion.

      All that said, if they do move in this direction, I’ve probably voted Democrat for the last time.

    14. Jonathan Says:

      Correction:

      For every tale of employment woe in which the union sticks up for the downtrodden employee, there are numerous cases of intimidation and violence by union people trying to stifle the opportunity of nonunion workers.

      I think I went overboard here. However, whatever the actual ratio of helped workers to nonunion workers abused by unions, I think it’s clear that union violence is a major problem. It’s also a continuing problem, because laws against assault and intimidation are not always enforced against union members in labor disputes. My point, again, is that unions have significant costs that should be taken into account when considering their overall benefits.

    15. TangoMan Says:

      The key to Democratic political success may lie in the most untouchable political problem: immigration reform.

      There is a strong current of anti illegal immigration feelings in the country, and this was even mentioned during the debates as the number one topic that the moderator got feedback on.

      People want the borders tightened up. This will appeal to some of the Democratic constituencies. With the loss of manufacturing jobs Blacks are taking a disproportionate hit and stagnating on their income levels. Hispanics already here don’t want more labor supply coming. The losers will be the bleeding hearts who want us to bring the American lifestyle to the unfortunate.

      The Democrats may peel some voters away from the Republicans by appealing to law and order and actually enforcing the law. They’ll appeal to fiscal conservatives because the illegals are net tax recipients who consume more in services than they contribute via taxes. There’s no way a migrant farm worker pays enough in taxes to offset the cost of emergency room medical care, schooling for 1+ kid at $10,000/annum/child, policing, urban congestion, crime, etc. The fiscal conservatives will recognize that low wage benefits accrue to the employers and consumers and the tax bill goes to all of the taxpayers.

      People are still deeply wedded to the concept of nationalism, dispite the attempts of the Wall Street Journal editorials and libertarian preaching on open borders.

      The resulting restriction in labor supply will help the existing Black and Hispanic communities and after the wage readjustments, the fiscal situation for the taxpayers would improve as well by eliminating the drain of the net tax recipient class – the illegals.

    16. Ken Says:

      “I think I went overboard here. However, whatever the actual ratio of helped workers to nonunion workers abused by unions, I think it’s clear that union violence is a major problem. It’s also a continuing problem, because laws against assault and intimidation are not always enforced against union members in labor disputes. My point, again, is that unions have significant costs that should be taken into account when considering their overall benefits.”

      Well, without union violence, or at least the threat of it from the union or from union-friendly governments, forming a union is pretty pointless. You can pool as many workers as you want, you ain’t going to get a monopoly. All you’ll get is a contracting firm.

      To get a monopoly, you need the power of the state, or the power of your own weapons with the acquiescense of the state, to lock out your competitors. If you can convince the general public that you are engaging in “labor unrest” or better yet a “people’s uprising”, and thus paint yourselves as the good guys and the cops sent to arrest you for threatening and using violence to maintain your labor cartel as the bad guys, you and your merry band of workers will get your hands on some nice loot. If you can keep that myth masquerading as real history for more than a hundred years, then you’ll have pulled off a truly impressive feat.

      My hat is off to those guys.

    17. Mark Says:

      Basically, the concept you discuss is “Let’s turn every Blue State into France,” with a moribund employment prospect.

      What’s going to happen when companies start moving to red states to avoid the ridiculous laws? It isn’t like they can’t do it.

    18. Frank R Borger Says:

      Working in an “Employment at will” state, I still agree with the idea. As a counter proposal to axing “at will” I suggest this.

      If the employer can’t fire an employee without due cause, the employee shouldn’t be able to QUIT without due cause. “Take this job and shove it” workers need not apply.

    19. dick Says:

      If the employer cannot fire at will, then tell me just why he should hire unless he is absolutely forced to. Tell me why he should have to use his savings to pay for extra benefits for employees he cannot fire. If they quit, then he can just hire new ones with no problem.

      The cannot fire at will is why the Italians and the British lost almost all their vaunted industry. Go look at how the unions downed tools and put out substandard product in Britain and see the huge auto industry they no longer have and the terrible reputation their parts have (remember Lucas Industries as the Prince of Darkness for the terrible reputation their electrical products had?).

      What we need is a mechanism to get the workers to take some pride in their work. Giving them lifetime jobs because the boss can’t fire them is a recipe for substandard work. Very bad idea.

    20. Ginny Says:

      As someone who did literally decades of intermittent Kelly Girl work I can tell you that the atmosphere in state & fed offices (at least at that level) which clearly were not “fire at will” places was considerably less productive, more full of turf battles and petty rivalries than commercial workplaces. Of course, the nature of needing temp help made these unusual situations and exceptions occurred of government efficiency and commercial inefficiency. Also, I just sat there and typed and did my thing so this is more a voyeur’s observation. Nonetheless, I’m hardly the first or last person to come to these conclusions. In summer, when my business was often overstaffed, workers were less productive and less happy than in the fall when they were overworked.

    21. Mitch Says:

      Lex, what we’re talking about here is an exit cost. Think of the difference in cost (financial and emotional) between breaking up a short relationship and divorcing, and the degree of agonizing that goes into starting each kind of relationship. It’s a major reason structural unemployment is higher in the EU.

      I speak as one who has been well screwed by an employer, although it was gratifying to see the company in the newspapers some years later for ethical lapses. I also saw the government take 13 years to fire someone they should never have brought on.

      There is also the question of the relative attraction of benefits. If you hire people at high wages and high risk, you get one sort of employee. If you offer relatively low wages but a bomb-proof employment contract, you get the Registry of Motor Vehicles. Adverse selection goes to work every morning, even if your employees bang in sick.

    22. Lex Says:

      Mitch, I already basically agree with all this. The interesting questions to me are: (1) would Geoghegan’s proposed program have a chance of political success? and (2) why? I’d say yes to to question 1. 2 would take too long to answer here. If my answer to 1 is right, the third question is (3) how do the Republicans respond in a way that will be politically effective?

    23. Jonathan Says:

      Answers:

      1) Probably not

      2) State govts unable to prevent emigration

      3) Emphasize “ownership society,” expanded economic pie resulting from greater economic choice for individuals, need to be globally competitive; point out European failures

    24. Lex Says:

      The reason I say yes to (1) is that polls have repeatedly shown that far more people say they’d like to be in unions than are in unions. Also, my personal observation of the desire people have for maternity leave and how the unspoken pressure at work prevents them from doing so, so that they would probably want the law as a backstop.

      As to 2, the wealthiest and most productive states with the best educated and highest skilled workforces are Blue. The northern tier of the country has been populated by smart, hardworking, educated and communally-minded people for 350 years. The most productive parts of this country are the least libertarian and vice versa. If you want to find a populist, gun-loving, low-tax, lightly-gregulated state, go to Indiana. The highly unregulated states, like Indiana have been shedding jobs and people to highly regulated states like Illinois for decades. Anyone who goes to college leaves Indiana. The Blue States take up less land but have more people because more people want to live there. I think that just as most jobs don’t flee to India for higher wages, the idea that many jobs would be outsourced to the Red States if labor became marginally more costly is equally implausible for the same reasons. The degree of job loss would be minor, and only the crappiest jobs would move to the Red states.

      Your 3 might have some appeal. But I think it is too abstract for a lot of people. On the margin, I think the economic populism would be popular especially if we were in a recession.

      But this is speculation. If the Ds take Tom G up on his proposals, they will do polls and focus groups and we will all find out.

    25. Mitch Says:

      1. Could they sell it politically? Sure. They’ve sold the minimum wage and “free” universal health care.
      2. Why? Short version: they would sell it as shifting cost and risk to someone else (see above). This is becoming less reliable as a strategy. Over time, more people realize they’re being bribed with their own money. Jonathan is right about migration. It would be re-enacting on a state level what happened when the old-line industrial unions bargained steel, autos, & airlines into the ground (with the help of some dubious management and government decisions). Capital can move.
      3. It probably couldn’t be stopped in the deep blue states due to the weakness of the opposition. The sad results would immunize other states from following, and eventually result in a roll-back in the deep blue states. They are in competition for taxable companies and taxpaying citizens. Unilaterally raising prices just drives away customers.

    26. Jonathan Says:

      People also used to argue against tax cuts by pointing out that the USA experienced rapid growth during periods when the highest marginal rate was 90%. Correlation isn’t causation. There’s tremendous human and cultural capital in places like NY, IL and MA, but it exists despite the high taxes and regulatory burdens to doing business, not because of them. Polls, at best, are highly imperfect indicators of people’s preferences (with so few people unionized nowadays, how many of them really understand the costs and benefits of union membership?). It might be better to look at actual behavior, and there it looks like people have been making clear what they want.

      They have on average been migrating from blue to red states at a high rate for years, which is why former backwaters like FL and AZ have experienced double-digit population gains. (Notice where NY, MA and IL fit in this ranking.) Your statement that “the highly unregulated states, like Indiana have been shedding jobs and people to highly regulated states like Illinois for decades” is simply wrong on a nationwide basis.

      The Democrats are fooling themselves if they think the way to solidify their control in blue states is to apply more of the same old high-tax paternalism and unionized rigidity that have driven so many people away from those places.

    27. Lex Says:

      It might be better to look at actual behavior …” However, true this usually is, the point is that people who want to organize a union cannot do so since the law has made it effectively impossible to do so. Geoghegan has written about this convincingly. Management holds all the cards legally and can get away with firing anyone troublemaker who tries to get a union going in a workplace.

    28. Jonathan Says:

      Geoghegan’s scheme, to have any effect, will have to impose substantial costs on employers. You can’t avoid the costs by playing with the details or the labeling. If you increase the cost of something, demand for it will decrease. In this case, higher labor costs will reduce demand for workers, and will spur businesses to eliminate some jobs and relocate others to less costly places.

    29. Lex Says:

      Well, part of the genius of it is “just cause” as part of his proposed law. Say you decide to close your plant and move to another state, or you outsourced it overseas, and you lay off the workforce. They sue. They then get to ask a jury whether firing your workers so you could move out of state and pay other people less is “just” or not. If not, the jury can assess damages. So what do you do? Stay put, or negotiate an exit arrangement with your current workers, instead of just padlocking the gate some morning.

      It would not be so easy to leave. It might make more sense for the employer to just stay and try to keep his workers happy.

      All it would do is put an extra card in the hand of currently employed workers. It would not transform the world. It would just shift the balance of power a little bit.

    30. Jonathan Says:

      That’s third-world thinking, Lex. Any time someone suggests compelling businesses to remain in a State by threatening some kind of confiscation, which in effect is what making such lawsuits easy does, he is sending a message to business owners that they should get out as soon as they can. Some of them will leave to avoid more hassles, others will sell at depressed prices to connected operators who can maneuver the local courts and politicians, and others will hang tight and avoid expanding. The net result will be a permanent haircut in asset value and depressed earnings as long as such laws are in effect. The main people who benefit from such a regime are people like politicians and labor lawyers, and I don’t think these groups can indefinitely prevent the workers and taxpayers from figuring out what’s going on.

    31. Jonathan Says:

      Not to mention all the job-creating businesses that never get started. So net result is less wealth and opportunity for everyone in these states, but maybe more power for the local Democrats. How can this possibly be seen as a good outcome?

    32. Brock Says:

      Mr. G ewirtz — You’re missing the point. Everything you said is true, but I think Lex might be right. This might work, politically, in the short term. Sure, they’d realize their mistake in 40 years, when Texas surpasses California as the largest State economy and unemployment in NY is 10%, but that doesn’t mean it won’t get Democrats elected today.

      Remember, politicians are fundamentally short-term thinkers. They need to get elected every X years, and there’s no living on past success.

    33. Jonathan Says:

      That’s the big question, isn’t it? I think it’ll be tough to sell this extra-strength version of the old welfare-state snake oil, but who knows.

    34. Ginny Says:

      Okay, I’m not an economist but would it really take 40 years?

    35. Lex Says:

      “How can this possibly be seen as a good outcome?”

      For whom? For the Democrats, maybe. That is, after all the idea of them adopting such a program.

      I also think you overestimate how portable many businesses are, and how severe the effects would be of the ensuing litigation. We’d have a bunch of cases that established what “just cause” meant, and everybody would know the new ropes pretty quickly. As to the more cash-like benefits, larger businesses could handle it, some smaller ones would never start and some would just operate under the table.

    36. Jonathan Says:

      -Another layer of regulation

      -More litigation

      -Greater uncertainty

      These things are functionally identical. They mean higher costs. That means, on the margin, lower profits, less business done, fewer jobs, fewer businesses started, more businesses leaving or shutting down. It doesn’t matter if everyone adapts. Of course they will. But the costs will still be there, and there will be few if any benefits, except for a small class of political parasites.

      Any time the political class starts talking about imposing costs on what it thinks are captive businesses, you can bet that the benefits will be less and the costs more than expected.

      Businesses seek to minimize costs. If you force them to pay extra costs to fund your patronage machine, they will try to adapt by cutting other costs, perhaps by eliminating marginal jobs. Some of them will leave your state if they can. If they can’t leave, at some point they will go out of business. The Democrats may control Illinois, NY, MA, etc., but they can’t control Malaysia or even Florida. The proposed strategy depends on being able to fool a plurality of voters at a time when mass communication and the Internet make that more difficult than ever. How likely is that to succeed?