Rethinking Unions II: A Time to Kill (Firms)

Previous in the series:
I

I started off this series hoping to get some good comments that would further my rethink. Jim Bennet is an articulate representative of a current in the comments – “The first thing is for the union to realize that the primary interest of the union is to see that the employer survives and prospers.” I disagree but only because it ignores an important case, when employers do not deserve to survive.

I am starting from the premise that in capitalism’s 3 legged stool, there is no privileged leg. Capital, labor, rents, all have their heroes and their villains. All need to have the heroes promoted and the villains marginalized. This line of cooperativist thinking denies the need for villain marginalization. But sometimes we do need to kill off businesses. Sometimes we have too many firms and the weak need to go to the wall while salvaging their resources as much as possible. If either hero promotion or villain marginalization processes are weak or missing, the capitalist system suffers economic performance drops. We must have robust systems to more efficiently kill firms that need to die and labor can play an important role in that capitalist process. Labor needs to judge capital and act accordingly.

Let’s take a look at the UAW, for example and grant that everything they say about GM management is true. Let’s stipulate that collectively, GM management is unimaginative, largely made up of poor planners, make repeated bad decisions over a span of decades, and are generally responsible for running an American icon into the ground. So why did the union let them get away with it when they could have destroyed GM and served their members better? Stipulating that the UAW is entirely right about its indictment of GM management should have led to entirely different behaviors and would have largely saved Detroit and helped keep the rust out of what we now call the rust belt.

The UAW should have looked ahead to the inevitable train wreck and politically encouraged company formation in the areas where its members lived. It should have reworked its own structure so that union members moving to “nonunion” firms didn’t lose out with the union by it. It should have educated its workforce on the need to pass judgment on bad management in a practical sense and the importance of creating enough jobs at good employers so there would be sufficient lifeboats at other firms when GM eventually collapsed under the weight of its poor decisions. The UAW did none of this. That’s a good reason why the UAW needs to be replaced.

The UAW should have encouraged the creation of laws to allow quick approval of low volume models so that custom car builders in the Midwest would be a constant challenge to “the big three” and increase the chances of an American firm with better management rising up on a consistent series of hits and replacing GM. That could happen either by simply outcompeting GM or as NeXT software did to Apple by the guppy swallowing the whale and giving the larger company a management transplant.

A proper representative of labor would be agitating against laws restricting the sale of automobiles to expensive dealership networks, for reducing the cost of approving cars so they can be driven on public roads, and generally for pro-startup legislation. A proper representative of labor would pressure local municipalities and counties to constantly diversify their job base so that no matter how badly a particular company did, members wouldn’t be stuck in dying towns with few job prospects.

A capitalist system that had unions like this would have improved growth prospects, healthier communities, and be much more hostile to bad management wasting resources and serving their shareholders poorly. It makes you wonder why nobody’s made this sort of organization.

Rethinking Unions

As they currently stand, Unions are dangerous dinosaurs. But that doesn’t mean that worker interests have no need for structures that serve their interest. If we’re serious about believing in liberty, we need to address how to create viable, sustainable, superior worker organizations. They might just end up keeping the “union” label if the brand isn’t irredeemably sullied by its present users.

So what characteristics would this new type of organization have?

Sustainably low cost
Concentrate on proactively improving worker situations
Unabashedly pro-capitalist
Interventionist in secondary education, aligning student production better with worker needs.

Anybody have some other features?

The Economist Publishes a Monstrous Lie

Gov. Rick Perry has famously called Social Security a ponzi scheme, a monstrous lie. The Economist magazine, in covering the story has now told its own monstrous lie. It is lying via a graph it included with the story.

Deceptive Social Security finance graph from the Economist
SS fantasy finances, Economist version

The legally mandated 2011 Social Security Trustee Report lays out the actual fund exhaustion date as 2023 on page 3 of the report. So, 2023, 2037, what’s the difference? Electorally, it’s a very big deal. If you’re a current beneficiary today at age 66, you would be 78 in 2023, right at the edge of your life expectancy but more likely than not you would be alive. You would be 92 in 2037 and more than likely dead. If a senior is going to be alive when the big Social Security benefit cut kicks in, it is within their planning window and consequently the chances that they will be a Perry voter go up. Up to now, attempts at reforming Social Security were done so early that the crisis was only going to affect somebody else. Now, every senior who grasps when the crisis will hit knows it will hit them when they are going to be older, weaker, and even more unemployable than they are now. By putting out a pretty, lying graph, the Economist gives ammunition to the left-leaning mass media to write their own stories that also minimize the number of seniors who grasp the truth.

In short, the Economist is putting false numbers out there, ones that will have an effect of lulling seniors into a poorer financial state right when they will be old and frail and unable to do anything about it. What happened to their editors, their fact checkers, their sense of decency? Is everybody to be sacrificed for the electoral convenience of US Democrats in the 2012?

It Could Have Been Me

Had my plans, or the jihadists’ plans, been altered just a bit, I could have been up on the WTC tower when it was struck and then fell. I would have been a tourist with my wife and infant daughter stopping in NYC on our way to visit my in-laws in Europe. We could have been part of the death roll. Had my parents rolled out of bed a few hours earlier to take our cousin on a more ambitious tour of Battery Park, they could have been on the death roll, crushed in a subway car passing under the site. I would have been getting a yearly invitation to come to NYC and mourn. How do those who actually get the invitations ever put their lives back together? I can’t imagine the yearly ritual of publicly ripping your emotional scabs off as the world watches.

I suspect that there are tens of thousands just like me. People who visited the area just a bit before or who had been planning to be there but for random chance, fortunate circumstance. Such things change you forever but nothing actually happened to you. Fate hands you the cruelest of brushback pitches and you don’t know what to do with it. It’s deadly chin music but not deadly for you. Do you step back from the batter’s box or crowd in even tighter, daring fate for a repeat? Neither attitude seems right. I claim no special insight or wisdom.

Year after year, people gear up for 9/11 memorials. They’re not for me. They shouldn’t be for me. But they could have been for me. And my heart is still unsettled every year around this time when I look at my older boy who might have been an orphan and my youngest who never would have been.

We can stimulate the economy without extra debt or inflation

How to stimulate the economy without inflating the currency or borrowing any more money.

Step 1:
Assemble all requests for federal permits.

Step 2:
Sign them for final approval (as in if they’re interim permits, they are approved for final status as if all other interim applications had been filed and been approved as well). Use auto pens if needed.

That’s it, no step 3 required.

There is now, and always is, a backlog of projects that have funding, are ready to go, and only wait the approval of the various administrative arms that they have complied with this or that regulation. If those projects go forward, the economy will be in better shape. So why not just sign the permits, let construction proceed, and mitigate the bad decisions on the back end when the economy has recovered?

Edit:
Just to make things clear, there are 51 executives in the USA who can do this. The President would likely have the biggest effect but certainly governors would be able to do this on their own as well.