Socialism creep 0

Socialism grows government and shrinks the market, including the job market.

From Analects of a Skeptic:

The fatter the government, the thinner the people

The more generous the government, the more robbed the people

The more secure the government, the more threatened the people

which provides an apt comment on this news.

From The Heritage Foundation:

Since President Barack Obama was sworn into office, the U.S. economy has shed 3.4 million jobs and the unemployment rate has risen to 10%. But not all sectors of the economy have been suffering equally. In fact, the sector of the economy most supportive of President Obama has not only avoided contraction, but has actually managed to grow instead.

According to a report released by the Bureau of Labor Statistics (BLS) last Friday, in 2009 the number of federal, state and local government employees represented by unions actually rose by 64,000. Coupled with union losses in the private sector economy, 2009 became the first year in American history that a majority of American union members work for the government. Specifically, 52% of all union members now work for the federal, state or local government, up from 49% in 2008. Or, to better illustrate these statistics: three times more union members work in the Post Office than in the auto industry.

So what? Why should Americans care if unions are now dominated by workers who get their paychecks from governments, instead of workers who get their paychecks from private firms? There’s one simple reason: private firms face competition; governments don’t.

Collective bargaining, the anti-trust exemption at the heart of a union’s power, was created to help workers seize their “fair share” of business profits. But if a union ends up extracting a contract from a private firm that eats up too much of the profits, then that firm will be unable to reinvest those profits and will lose out to competitors. But when a union extracts a generous contract from a government, the answer is always higher taxes or borrowing to pay for the bloated spending. And make no mistake: unionized government worker compensation is bloated.

As Heritage fellow James Sherk notes “[t]he average worker for a state or local government earns $39.83 an hour in wages and benefits compared to $27.49 an hour in the private sector. While over 80 percent of state and local workers have pensions, just 50 percent of private-sector workers do. These differences remain after controlling for education, skills and demographics.”

Unionized government employees not only want to keep their bloated compensation packages, but their leaders are desperate for more members and more union dues. That is why public-sector unions have become a fierce lobbying force for higher taxes and more spending across the country. Organized labor once fought against taxes and regulations that impeded the economic interests of their employers, but now they are in alliance with environmentalists pushing private sector and economy-crippling cap-and-trade legislation.

It’s worth noting that the BLS did not count the United Auto Workers working for General Motors and Chrysler as unionized government employees. But perhaps they should have. Our country will share their fate unless something is done about unionized government power.

And the greater the number of people working in government jobs, the more voters there are whose interest lies in keeping the Party of Big Government in power.

It’s hard to reverse socialism.

A very bad omen 0

From Investor’s Business Daily (read it all here):

Understand, this is a time of great financial peril. That’s the main reason why Bernanke was renominated. The idea of changing Fed leaders in the middle of a financial crisis was too much.

Bernanke has printed close to $2 trillion in new money to help refloat the economy. President Obama is no doubt happy — if for no other reason than it will let the White House claim its $787 billion “stimulus” is the real reason the economy’s starting to grow again.

But the naming of [Denis] Hughes as the top banker at the New York Fed is the real news. And it’s quite astounding.

He has no significant finance experience. Nor does his educational background — “Brother Hughes,” as the AFL-CIO’s Web site calls him, has a B.S. degree from the Harry Van Arsdale School of Labor Studies at Empire State College — reassure us…

Of greater concern is his career as a bought-and-paid-for union official and political operative. The New York Fed chairmanship is hardly a place for a person whose entire career has been spent fighting and strong-arming the very people he’ll now be regulating.

Putting this key Fed bank in the hands of a person whose experience suggests a bred-in-the-bone hostility to capitalism strikes us as bizarre at best and dangerous at worst. And it bears the unmistakable imprint of the White House. Just last week we wrote about plans to elevate former United Steelworkers adviser Ron Bloom from head of the auto task force to “industrial policy czar.”

Putting so many union people in powerful positions of economic policymaking is a recipe for disaster. Since 1955, the share of the workers belonging to unions has plunged from 33% to about 11%. Still, though increasingly unpopular, unions have helped wreck two major industries: autos and steel. Not much of a track record.

But now, through politics, unions are getting rewarded with control of the economy a very bad omen for American capitalism.

Posted under Commentary, Economics, government, News, Socialism, United States by Jillian Becker on Wednesday, August 26, 2009

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A constructive suggestion 5

DETROIT (AP) – Worried about their jobs and warned that the cost of failure could be a depression, hundreds of leaders of the United Auto Workers voted overwhelmingly Wednesday to make concessions to the struggling Detroit Three, including all but ending a much-derided program that let laid-off workers collect up to 95 percent of their salaries.

"Everybody has to give a little bit," said Rich Bennett, an official for Local 122 in Twinsburg, Ohio, representing Chrysler workers. "We’ve made concessions. We really feel we’re doing our part."

Union leaders also agreed to let the cash-starved automakers delay billions of dollars in payments to a union-administered trust set to take over health care for blue-collar retirees starting in 2010.

In addition, they decided to let the Detroit leadership begin renegotiating elements of landmark contracts signed with the automakers last year, a move that could lead to wage concessions.

 

Question: Why not let the UAW take over the management of the Detroit Three and struggle to make the sort of profits that can keep them in gravy forever? 

 

Posted under Commentary by Jillian Becker on Thursday, December 4, 2008

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