Worker’s Rights Advance, Under the Radar

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In the firestorm of news reports surrounding President Trump’s nominees and Russia’s hacking, some great news about workers’ rights has been overlooked. But in January, without any fanfare, Kentucky adopted a right-to-work (RTW) law.

An RTW law simply gives workers in any business where the workers are unionized the right not to support (i.e., join or pay dues to) the union. Without RTW laws, unions can and often do compel workers to join or support them in spite of their desires. While the right to join a union is protected by federal law, the right to refuse to join is not so protected. It is up to the states to pass RTW laws, and counting Kentucky, 27 states have now done so.

The Kentucky House of Representatives first passed the measure by a vote of 58–39. What allowed this to happen was a massive recent historical change: the Republicans took control (by a nearly 2-to-1 margin) of the chamber, which had been controlled by Democrats for nearly a century. Shortly thereafter the bill was passed by the Republican-controlled Senate, in a rare Saturday session, and the Governor — Matt Bevin, also a Republican — immediately signed it into law.

Short-term, this was a fabulous deal for the auto workers, giving them a seemingly crazy amount of job security. But in the long run, it drove the automakers off a fiscal cliff.

The reaction to this by Kentucky union leaders was predictably bitter. Bill Londrigan, head of the Kentucky AFL-CIO, angrily barked, “Right-to-work is simply a clever slogan designed to undermine union resources.” Caitlin Lally, of the Greater Louisville Central Labor Council, lamented, “The future of the fight is in . . . trying to stop the erosion of wages, benefits and safety.”

This is nonsense, of course. There are several compelling arguments about why it is morally repugnant to force workers to support a union, arguments that are winning out in state after state.

First, unions justify forcing workers to support them with the free rider argument: since the unions deliver great contracts to the workers, it is right to make every worker pay dues. However, it is by no means clear that unions negotiate contracts that benefit the workers overall and long-term. For example, the contracts the United Auto Workers were able to force upon US automakers included provisions that seemed great — such as the one requiring the companies to keep all employees on at full pay when any of the companies shuttered a plant (say, because the model made at the plant wasn’t selling). Short-term, this was a fabulous deal for the auto workers, giving them a seemingly crazy amount of job security. But in the long run, it drove the automakers off a fiscal cliff, resulting in the bankruptcy of two of them, and in turn requiring taxpayers to pay massive amounts of subsidies to keep the companies alive.

Second, the right to free association applies to all parties. You and your friends are free to form a club, free from any interference by me. But I have the same right to refuse to join, no matter how much you might think it would benefit me to be a member. Similarly with unions: the right of private-sector workers is sacrosanct, and nobody — least of all I — proposes to take it away. But the right to opt out of the union should therefore be recognized as equally sacrosanct.

Workers who are pro-Second Amendment find with alarm that their dues fund politicians intent on ending gun rights.

To this, union apologists offer the freedom-to-contract argument: workers and management have the right to contract freely, so if a company’s workers can get management to agree to a contract compelling all workers to support the union, the rest of us shouldn’t interfere. But the union apologists are intellectually dishonest here, since they support the federal law that prohibits “yellow dog” contracts — that is, contracts that forbid unionization. If there is freedom of contract, then yellow dog contracts should be allowed, too.

Finally, there is the point made by Thomas Jefferson: “To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.” Unions typically use worker dues for the lavish support of politicians and political organizations that are typically Left-liberal in orientation. So workers who are pro-life find with disgust that their dues go to support extreme pro-choice candidates, and workers who are pro-Second Amendment find with alarm that their dues fund politicians intent on ending gun rights.

More good news for worker freedom may be just around the corner: both Missouri and New Hampshire are considering RTW laws, and both have newly elected Republican governors who have indicated that they support free choice for workers.




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Now the Majority

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Amid all the hoopla surrounding the elections, the nation passed a milestone worth noting. We now have right-to-work (RTW) laws in place in the majority of states. This is a cause for quiet celebration.

Earlier this month, West Virginia — long a stronghold of Big Labor (specifically, the United Mine Workers) — voted to become the nation’s 26th RTW state. This was as surprising as Michigan’s decision a couple of years ago.

Workers find their dues used to elect politicians who want to close down the very industries that employ those workers.

It took maneuvering. The law had narrowly passed the Republican-dominated legislature the week before, but Democrat Governor Earl Ray Tomblin vetoed it. However, the state constitution allows the legislature to override a veto with a simple majority. The Republican-dominated legislature did just that, by 18–16 in the Senate and 54–43 in the House.

Undoubtedly the driving force for this change is something I have long noted in these pages. Ever since FDR, there has long been an unholy alliance between Big Labor and the Democratic Party. Labor unions freely used enormous amounts of workers’ money to elect Democrats, who then passed laws favorable to unions, but often opposed to the desires of workers. Over the past 20 years, and especially with the election of Obama, Big Labor has elected Democrats who are environmental extremists. This is the ultimate in irony: workers find their dues used to elect politicians who want to close down the very industries that employ those workers!

That is especially true in West Virginia. Of course, the state has long had major coal-mining operations. But Obama’s campaign against coal has devastated those industries. This has been the major reason that West Virginia has the second-highest unemployment rate in the nation — 6.5%, or about a third higher than the average.

Workers of the country, unite, and throw off the chains with which the vicious environmentalist Democrats have shackled you! Not only will you be free — you may just keep your job!




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It’s Déjà Vu All Over Again

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The latest news on the American auto industry brings back bad memories of Obama’s crooked crony nationalization of GM and Chrysler. We may well be seeing the setup of another round of bailouts in our dysfunctional domestic auto industry.

Start with a recent report on the nervousness in the industry during the run-up to the Federal Reserve decision on whether to move off the Fed’s seemingly endless zero-interest rate policy. The auto industry has been selling a lot of cars for cheap money; as the report notes, the apparent revival of the domestic auto industry has been facilitated by an explosion of auto loans. Earlier this year, the combined auto debt of US households hit an all-time high of over $1 trillion. The artificially low interest rates, along with the drop in gasoline taxes (brought about by the miracle of fracking) worked like Viagra to swell the American libido for new cars. The sales of domestic cars will likely exceed 17 million units for the year — a level not seen since 2001.

GM alone has recorded more than $25 billion in profits over the last five and a half years, and Chrysler has recorded 65 months of sales growth. All this is the aphrodisiacal effect of 0% interest rates on auto loans. One couple quoted in the report said they just bought their first car in 20 years, enticed by the 0% financing, though they chose a 1.95% rate loan because of a $3,000 rebate (which they apparently used to cover their down payment). This is a common perception now: the University of Michigan’s most recent household survey showed that 28% of the households surveyed pronounced it a great time to buy a car because of the low rates.

We may well be seeing the setup of another round of bailouts in our dysfunctional domestic auto industry.

Moreover, customers are using the low easy money to buy more expensive cars. This has all the signs of a government-induced easy credit asset bubble: buy expensive cars you otherwise can’t afford, since the government has made it clear that it prefers borrowers who recklessly spend to savers who prudently forego immediate gratification. That is about as sound an economic theory as it is a moral one! Can we spell “moral hazard,” boys and girls?

However, as the report observes, easy credit brings the risk of easy defaults. And that risk has been growing like a virus: in 2013, 10.3% of auto loan applications were declined as not being credit worthy; this year, the proportion was a risible 3.3% — a drop of two-thirds!

Easy money is translating into longer loans on more expensive vehicles. Last month, the average length of an auto loan was over 68 months — six months more than it was a decade ago — a rise of nearly 10%. The size of the average auto loan is now $29,000, an increase of 15% over five years, while the average down payment amount has only increased by 10%, meaning that the loans are backed by relatively smaller down payments.

Earlier this year, the combined auto debt of US households hit an all-time high of over $1 trillion.

More bubbly still is the fact that subprime auto loans — i.e., loans to people with poor credit histories — now constitute one-fifth of all auto loans, with the total balance outstanding on subprime loans rising over the past five years to a whopping $176 billion. Many of these loans, please note, were originated by finance companies with ties to the automakers. Subprime auto loans, like subprime mortgages before the mortgage meltdown, are being bundled as securities and sold on Wall Street to people who buy them because they have higher interest rates.

Sound familiar?

Now consider another recent report, this one about the latest capers of the UAW — the main instigators of the American auto industry’s problems, and the greatest beneficiaries of Obama’s corrupt socialization of GM and Chrysler. In that deal, the GM and Chrysler bondholders and the taxpayers were totally shafted in favor of the UAW. The only real concession was the institution of a two-tier wage scale, by which existing autoworkers kept their outrageous salaries, while new hires were to come in at a lower rate — roughly $9 an hour (or about $19,000 a year) less. This irks the new hires, who often do the same work as the “upper tier” workers.

And here it gets interesting. Recently, under Rick Snyder’s enlightened governorship, Michigan — historically a state totally dominated by the unions — chose to become a right-to-work state. Thus, many UAW members — formerly coerced into supporting a mob of rentseekers — are now free to leave the union plantation. Some of the newer members, tired of being at the low end of the scale because of the UAW contract, and tired of seeing the UAW mismanage their dues, are indicating that they intend to do just that.

Subprime auto loans, like subprime mortgages before the mortgage meltdown, are being bundled as securities and sold on Wall Street.

This has led the UAW to maneuver the weakest of the three domestic automakers, Chrysler — oops! Fiat Chrysler — into signing a new contract, a contract much more favorable to the UAW. Under this new deal, after some period of time (not yet revealed), the current cap of under $20 an hour for new hires will rise to about $25 an hour (that is, new autoworkers will start out at $52,000 a year!). The two-tier system will be phased out. In keeping with its past modus operandi, the UAW will get GM and Ford to agree to the sweetened contract.

The big picture is clear. The weakest of the domestic automakers, which has on two prior occasions had to be bailed out by the federal government, at massive costs to the taxpayer, has just agreed to go back to overpaying the unionized workforce. It can do this because of the “red hot” pace of sales.

But the hot sales are inflated by the Fed’s easy money policy, and the surge of subprime loans; and sooner or later, the Fed will have to start raising interest rates. Thus, sooner or later, the nation, which has been enduring a slow, painfully shallow recovery, will slide back into recession. Then we will see the inevitable plunge in car sales, with the domestic automakers again locked into ludicrously high wage rates.

The weakest of the domestic automakers, which has on two prior occasions had to be bailed out at massive costs to the taxpayer, has just agreed to go back to overpaying the unionized workforce.

And then it will be what that great American philosopher Yogi Berra — sadly departed, this September — called “Déjà vu all over again!” We will probably see Chrysler (and even GM) go into the red once more. We will hear, once more, about the piteous plight of the company, about how sad it would be for all those overpaid employees to be laid off, and about how “compassion” — always defined by the progressive elites as spending other people’s money to buy votes for the advocates of big government — dictates another bailout of a joke of a company.




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On Dogs, Cats, and Carnal Knowledge

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Reading the Drudge Report just after the House of Representatives defeated a bill that would have given President Obama fast track authority (or “TPA,” for “trade-promotion authority”) to conclude free trade agreements, I remembered a line from the first Ghostbusters movie. The busters (Ray, Egon, Winston, and Peter) are explaining to the mayor that his city is headed for “a disaster of biblical proportions.” When the rather obtuse man asks what they mean by “biblical,” Ray says, “Real wrath of God type stuff.” Egon adds, “Forty years of darkness!” Winston chimes in with “the dead rising from the grave!” Whereupon the ever-arch Peter adds loudly, “Human sacrifice . . . dogs and cats living together . . . mass hysteria!”

What happened on June 12 was that a bill to grant Obama the same power (fast track authority) that almost every other president since World War II has been given went down to defeat in a procedural vote, primarily because Democratic members followed their leader Nancy Pelosi (D-CA) in opposing it. The maneuver was to join Republicans who oppose spending more money on work retraining programs — which are usually just boondoggles that don’t retrain anybody — in voting down a package deal that included the TPA and also increased retraining funds that had earlier passed the Senate.

Talk about a dog and a cat being intimate: arch-conservative Drudge lavishing affection upon arch-leftist Pelosi, the neosocialist harpy from Hell.

Fast track authority is the power Congress can (and almost always does) give any president to negotiate free trade agreements (FTAs) in confidence and without congressional meddling. If any FTA is concluded, it of course becomes law only if the Senate votes in favor of it. Naturally, the Senate can only vote the submitted FTA up or down — it cannot amend it, since amending it is renegotiating it, which the other side of the agreement would not accept. Without such power, you have 435 members of Congress playing president, making it impossible to get any treaty — free trade or otherwise — negotiated.

Despite Obama’s last-minute personal intervention, in which he tried to convince his own party members in the House to support his plan, or perhaps because of his intervention, the bill went down by a vote of 302–126. As one unnamed Democratic congressman put it, “She screwed this president.”

But a number of Republicans opposed the measure, too. Here we get to the dogs and cats getting it on together.

After the vote, Matt Drudge ran a large banner on his website. It screamed, “Brave Pelosi Says No!” Talk about a dog and a cat being intimate: arch-conservative Drudge lavishing affection upon arch-leftist Pelosi, the neosocialist harpy from Hell.

I won’t rehearse all the arguments about why free trade is economically beneficial. I have done so at length in these pages (“The Case for Free Trade,” Liberty, December 2010, pp. 33–41). And the case was made again, succinctly and well, in a recent piece by Larry Kudlow, Art Laffer, and Steve Moore. To economists, 90% of whom favor free trade, it is obvious that free trade is on balance economically good for countries engaging in it. Why is it that when 85% of climate scientists agree on anthropogenic global warming, it becomes “settled science,” but when 90% of economists agree that free trade increases wealth (the theory of comparative advantage), the matter is never considered settled?

The reason for Obama’s defeat is threefold.

First to be mentioned is the decline in free trade sentiment among Democrats. Coming out of the Great Depression and the devastating war it helped to spawn, Democrats agreed with Republicans that the protectionism associated with the Smoot-Hawley tariffs was and is economically counterproductive and geopolitically dangerous — for, as Frédéric Bastiat observed a century and a half ago, when goods cannot cross borders, soldiers will. That is why fast track authority has been given to all but one president since the end of the second world war.

While Obama is a piss-poor negotiator, any free trade agreement he negotiates will likely err on the side of suffocating regulations for both sides.

But the Democrat party has moved ever more toward the extreme left — progressive liberalism, as Solzhenitsyn observed, ever evolving into socialism — and fewer and fewer Democrats are willing to support free trade. Really, Bill Clinton was the last president to push for it, when he signed NAFTA into law. One of the most important of the core Democrat constituencies, Big Labor, loathes free trade. In this most recent vote, for example, when Pelosi and her myrmidons went against fast track for the president of their own party, Big Labor Daddy Richard Trumka (King of the AFL-CIO) praised her mightily, proclaiming that “she stood up against corporate interests.”

Second, despite the best efforts of House Speaker Boehner and Senate Majority Leader McConnell’s to give Obama fast track authority, a portion of the Republican Party opposed the measure. The biggest reason is their distrust of Obama. That’s why websites such as Breitbart.com and the Drudge Report were bashing the bill mightily.

Now, as any more-than-casual reader of these pages knows, I have been unwavering in my opposition to and contempt for the Obama Regime. To put this simply, I regard Obama as the worst president in modern history. (When I said this not long back, one reader chastised me for not characterizing Obama as the worst president in all history, but I confess that my weakness on the history of 19th-century presidents restrains me from agreeing.) President Obama will have done more to harm this country in both domestic and foreign policy than any other modern president, and if we are lucky enough to elect a decent Republican president in 2016, he or she will have to spend most of a first administration reversing the damage.

But as the old saw has it, even a broken clock is right twice a day. More to the point, while Obama is a piss-poor negotiator, in fact really pathetic at it, any FTA he negotiates will likely err on the side of trying to saddle the other side with what he favors for our side too: suffocating regulations. While that is economically deleterious, I doubt that it will result in a net disadvantage to us. Moreover, any final agreement he negotiates must still be approved by Congress, so any grossly unequal deal — say, one that increases Japan’s access to our markets but protects its agricultural industry — can quite easily be voted down, forcing him back to the table.

A good leader has to be a good teacher, too, and explain the ways in which certain ideas are true and certain other ideas are false.

The third, and in my view the most important, reason for Obama’s loss is Obama himself. Let’s put aside the personality issue, which is that Obama is a patently arrogant, distant, snarky, intellectually mediocre narcissist who doesn’t work or play well with anyone except complete stooges. This doesn’t help him, but it isn’t the biggest problem about his free trade initiative. That problem is his history.

Obama has never gone on a tour, selling the need for a trade agreement with Asia and answering the obvious populist arguments against free trade. In this, ironically, he is like George Bush — who, while he negotiated and signed into law more FTAs than any other president, didn’t explain them, argue their importance, or refute the economically ignorant but passionately tribal populist objections to them. Obama doesn’t explain, you see; he merely shows contempt for differing opinions and expects everyone just to see his colossal greatness.

Worse, his history is one of buying the same populist claptrap arguments against free trade that he is being met with now. He bashed Hillary because her hubby signed NAFTA, which, he claimed (parroting the Trumka types), cost jobs; though this was obviously false, as must have been manifest even to an intellectual lightweight such as himself. When in office, he quickly started trade wars against both Mexico and Canada, wars that ceased only when those neighbors fought back and kicked his ass. He stalled the three FTAs left over from the Bush era, only signing them late into his second term, in the face of the worst economic recovery in American history. Now this guy — out of the blue — advocates free trade?

The average American, like the average person anywhere else on this planet, basically has his scientific and moral views set by history. The physics that the average person believes, for example, holds that objects are completely solid, and that they fall at different speeds; that space is completely empty and infinite in all directions, and that it has but three dimensions. Tradition doesn’t make such ideas true. The economics that the average person believes maintains that while labor deserves to be compensated, the lending of money doesn’t; that it is better if all people do all things for themselves, rather than dividing up the tasks among many people, possibly people in different countries; that saving rather than spending hurts jobs, but protecting home industries promotes jobs; and many other things. Tradition doesn’t make these notions true, either.

In short, a good leader has to be a good teacher, too, and explain the ways in which certain ideas are true and certain other ideas are false. But Obama can’t teach anyone about fallacious ideas. Indeed, he often simply accepts them himself — unless he was just lying (something he does with amazing frequency and ease) when he campaigned against Hillary. Either way, he’s not able to teach the public why hunter-gatherer myths are wrong.

Maybe the Republicans can save him from the anti-free-trade crowd, but it is unclear that they can. If not, the biggest loser will be the American public. But I believe in the precept that people get the government they deserve.

em




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Acapulco Gold Rush

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Last weekend my wife was seized by an unwholesome enthusiasm for tiny houses. She’d read they were featured at something called a Better Living Show and wanted to go.

That’s what they call them, tiny houses; and in the truth-in-naming department you can’t do much better than that. Tiny houses are two-hundred-square-foot jobs, conveniently sized to fit into a single parking space. Except, if you lived in a parking space you’d have more room because you wouldn’t have to share your living quarters with a furnace and a water heater.

Tiny houses are the city of Portland’s newest, most environmentally correct way of encouraging neighborliness and doing something about urban sprawl at the same time. “Infill” is the word the planners use to justify them: 11, maybe 20 of the things bumper to bumper on a standard neighborhood lot. A business opportunity is what my wife called them. We could crowd a few dozen in the backyard, charge rent, and kayak the income stream into a comfortable old age.

The stuff isn’t even legal until July, yet here we were at a staid Better Living Show browsing booths filled with bongs and vaporizers and rolling papers and roach clips.

Marriages being what they are, we headed over to the Better-Living-in-the-Shanty-Town-of-the-Future Show, got out of the car, made our way on foot to where the parking lot receded over the curve of the earth, spotted a crowd, followed it into a warehouse-like building and found . . . marijuana paraphernalia. In fact, the first aisle was nothing but marijuana paraphernalia, display after display of the kind of things that would get you busted at any airport in America. Better living indeed.

Interesting, we thought, how quickly the free market kicked into gear once Oregon passed its marijuana initiative last fall. The stuff isn’t even legal until July, yet here we were at a staid Better Living Show browsing booths filled with bongs and vaporizers and rolling papers and roach clips. And it wasn’t just paraphernalia. One particularly popular young lady was pushing samples of what she billed as “medicine-free” edibles. Not that you can’t get edibles with medicine right now, just not at a recreational-use booth. Medical marijuana has been legal for decades but, until July, you will still need a prescription to indulge in recreational munchies.

In the next aisle orchids were being ultra-violated in the sort of high-tech grow-box you see in movies about space stations. Orchids, we thought. Now that we’ve found the more traditional part of the Better Living Show, can tiny houses be far away?

Turned out they could. It also turned out that the grow-box wasn’t meant for orchids. The orchids were nothing more than body doubles for the medicinal herbs that were meant to go in the grow-box but, like the medicine for the munchies, were biding their time until July. Next to the grow-box were shelves of seedless seed packets bearing the names of every imaginable variety of the scientifically engineered seeds you could grow in the grow box, just as soon as July rolls around and the seed packets contain seeds.

It began to dawn on us that, maybe, the better living show we’d arrived at wasn’t the same Better Living Show advertised in the paper. Sometimes we can be pretty insightful.

“This is the Oregon Cannabis Convention & Trade Show,” a nice young man informed us. “Better Living Show is the next building over. Building after that is the Gold & Treasure Show.”

Gold & Treasure? I thought. Gold and treasure is even better than marijuana paraphernalia. The Internet will send marijuana paraphernalia right to my home, but gold and treasure? Not even the most desperately dispossessed Nigerian widow ever came through with any of that. We headed over to the Gold & Treasure Show.

You had to go through a metal detector and check your guns before they’d let you in. I saw that as a favorable sign, a promise that we were about to be ushered into Aladdin’s cave. Or, and this is a particular fantasy of mine, Uncle Scrooge’s money bin.

Tiny houses are a lot more honest about what they call themselves than that Gold & Treasure Show. At the Gold & Treasure Show there was no treasure and not much more gold than there was marijuana at the marijuana show . . . and gold has been legal since the early ’70s. A couple of guys at out-of-the-way tables were pushing run-of-the-mill coins at about 30% more than you could get them for at any gold shop in town, which may say something about who they thought would be attending the show.

In the next aisle orchids were being ultra-violated in the sort of high-tech grow-box you see in movies about space stations.

What there was plenty of was late middle-aged men dressed up like prospectors who’d been thawed out of a glacier left over from Klondike days. They sported full beards and work boots, flannel shirts, and heavy-looking pants held up with suspenders. Their only sartorial concession to the 21st century was baseball caps advertising the names of equipment companies, which weren’t that much of a concession because the equipment they were advertising was as old-fashioned as the outfits. Row after row of sluice boxes. Pans. Picks. All the latest in 19th-century gold-mining technology. Pretty much anything you’d want if you were about to head on up to Dawson City in 1898.

Except, that is, for the gold magnets. Gold magnets weren’t part of any 19th-century prospector’s kit I know about. The fact is, I’m not persuaded that gold magnets should be part of any 21st-century kit, either. The idea of using magnetism to suck gold out of the ground doesn’t fit with anything I remember from high-school science; and, when I tried one on my wife’s wedding ring, it didn’t notice anything special. Which could go a long way toward explaining why these guys were at a trade show selling equipment rather than making their fortunes in the wilds of Alaska. But then, gold-rush fortunes are always made by the guys who sell the equipment.

Competitionwise, the Better Living Show picked a bad weekend to come to Portland. Marijuana fills the better-living bill for lots of people, and pretty much everybody thinks gold and treasure would go far toward making their living better, but almost nobody except city planners and the occasional overly enthusiastic wife imagines tiny houses could possibly make life better for anybody except slumlords, which left the Better Living Show a distant third attendancewise.

The people who put on that show seemed to share the general opinion and gave tiny houses the same pride of place as the Gold & Treasure Show gave gold coins: next to a wall on the far side of the room. There were two of them, both looking like the kind of place Red Riding Hood’s grandmother immigrated to America to escape from, once she’d been regurgitated by the wolf.

While the Gold & Treasure people were mostly pushing 19th-century mining gear, the marijuana people were selling stuff from a century that hasn’t even happened yet.

Also, they were culturally better suited to Red’s grandmother than to modern Americans. Medieval European peasants were minimalists in the way of possessions, and the houses were decorated in that style. Nothing was in them, including plumbing, so you had to imagine where the toilet and sink and shower would go, along with the furnace and water heater, which took some imagining because a tiny house doesn’t have space for much more than a single room with a fold-down bed, and the beds weren’t there, either. I would have gone into one for a better look, but I couldn’t get in. Somebody was already inside and I wouldn’t fit.

The vendors at the Better Living Show appeared to have a lot of spare time on their hands. The one I got to talking to seemed much more interested in the marijuana show next door than trying to sell me whatever he was supposed to be selling. He was elderly, almost as old as I am from the grizzled look of him. He’d grown up in Detroit and, like a lot of inner-city Americans, didn’t have any tolerance for drugs. But marijuana? He spent time volunteering with veterans and, well, he’d seen guys even older than himself cured, by drinking marijuana tea, of the neuropathy that goes along with type 2 diabetes.

Tea, he said. “If it’s tea it’s not a drug. “That show still there tomorrow?”

“Think so,” I said.

“I need to go find out about tea.”

The marijuana show wasn’t really about tea, although there were people there who probably could have told him. Maybe the munchie lady would have slipped him a recipe or two. What the marijuana show was about was selling you equipment, then selling you the knowledge you needed to use the equipment.

The marijuana show was about gleaming pipes and tubes and gauges and vats and dials that looked like they’d been left over from Breaking Bad. It was about grow lights and consultants to tell you how to save electricity once you’d bought the grow lights. It was about other consultants who knew how to maintain the optimum humidity, or the proper day-night cycles. It was about scary-looking machinery to extract hash oil from all the buds you’d be growing with all the grow boxes and humidity and day-night cycles. It was about consultants on indoor growing to tell you about nutrients and hydroponics, and about entirely different lines of equipment and consultants for people who wanted to make their fortunes growing marijuana outdoors. Underneath it all, it was about selling people who didn’t know the first thing about marijuana cultivation or marijuana processing the dream of turning into international marijuana kingpins.

If I’d had a lot of money, even if I’d had a lot more money than that, I still would have had to go into debt, yea, even unto the seventh generation, to get started in that business. But none of that debt would have made the least bit of difference in light of all the money that would be rolling in, once I got the business cranked up. It was pretty clear these people had had a lot of practice selling this line.

They were, when I thought about it, the same sort of people as the ones at the Gold & Treasure Show, except that, while the Gold & Treasure people were mostly pushing 19th-century mining gear, the marijuana people were selling stuff from a century that hasn’t even happened yet.

Something that nobody was selling was the statistics on what became of marijuana prices in Washington when weed went legal. Despite sellers up there having their state, Idaho, and the whole captive Portland market to themselves, the bottom fell out of their businesses. Too many who thought they were getting on the elevator at the ground floor wound up stepping into an empty shaft, only to get smashed flat when the elevator turned out to be heading down at them.

Try as I might, and I tried for half an hour, I couldn’t get a clear reason why weed farmers would want to unionize their workers.

It wasn’t as if there was nobody at the marijuana show who knew that. Or knew how to run a business in general. Several organizations had booths selling business-support services. One fellow claiming to provide this kind of expertise was a union leader trying to organize the workers on marijuana farms.

“But nobody here is planning to be a farm worker,” I told him.

“Plenty are planning to be growers, though,” he said. “I’m organizing growers, too.”

“You think growers want to join a union?”

“Their workers would. I’m organizing the growers so they can organize their workers.”

Try as I might, and I tried for half an hour, I couldn’t get a clear reason why farmers would want to unionize their workers. The best unclear reason involved keeping all the farms on the same playing field, which would keep prices for the product at a uniformly high level so that everybody, farmers and workers alike, would get rich. When I asked if his union planned to organize the illegal growers who are, when I thought about it, all the growers that exist right now, his answers became more unclear than usual. When I asked how anybody was going to get rich when marijuana doesn’t sell for any more than it’s selling for in Washington, he became even less clear.

A few booths over, a lady was touting a security service. “Marijuana businesses attract a lot of shady characters,” she said. “Owner needs to know who they are.”

Maybe, I thought, when marijuana is against the law. When it’s legal and cheap, shady characters are a lot more likely to hang around jewelry stores and places selling gold and treasure.

“You see a car in your parking lot with some shady characters inside,” she went on, “the last thing you want is to have to approach that car to find out who they are.”

Probably true I thought. Of any business.

“If you hire us, all you have to do is call with the tag number and we’ll tell you everywhere that car has been in the last few months.”

“You know that?”

“Sure. We get it from the street cameras. We can tell you within seconds everywhere that car has been.”

I knew about street cameras. Street cameras are one of things I talk about that make people think I’m some kind of anti-government crazy person, along with the thing I used to say about how the NSA records everybody’s phone calls and emails. I never expected the government would bother about something like a warrant when it wanted to check up on where my car had been, but I did think that calling up a specific license number would take a bit of trouble, like those operators tracing phone calls in old movies. And that, at the very least, the government would be embarrassed enough by the whole thing not to go making it any more public than it needed to. It never crossed my mind that you or I or a private security firm could tie directly into the street cameras and know where somebody else’s car had been. And do it within seconds.

I also couldn’t see how knowing where a car had been would tell you much about the people in the car. Unless the car turned out to be parked every night in a federal motor pool, which would tell you all you needed to know if you were running a marijuana outlet.

Which brings up the gentleman in the insurance booth. He was selling policies tailored for marijuana businesses. “Cover slip-and-fall. Product liability. Renter’s insurance to ease landlords’ concerns about leasing buildings to use as grow facilities. Theft. Bad debts. Acts of Government.”

Say what?

“Acts of Government. It’s not just what the thieves are planning that a businessman has to worry about, you know. It’s what the government has in mind, too.”

Now that’s something I could understand, at least until I thought about it. Insurance against acts of government was the one thing out of the whole trade-show lollapalooza, the one thing among all the fantasies of tiny houses and 19th-century gold-mining, of drive-you-to-the-poorhouse high-tech grow equipment and knowing where somebody else’s car has been, that made sense to me. Insurance against acts of government — that has . . .

That has . . . I don’t know. The things the government gets up to always turn out to be so far ahead of anything any sane person can imagine, I’m not sure what that guy was really selling. Could be he was no different from the other hucksters that morning. At the very least, he knew who his marks were.

Lots of people who use marijuana, and lots of people who would have wandered over from the Gold & Treasure Show, have their suspicions about acts of government. Could be he saw us coming.

Could be I’m the sort of guy who’d be suckered into the empty promise of a policy insuring me against acts of government in the same way those latter-day prospectors imagined they’d make their fortunes in Alaska, or those urban wannabe farmers and processors fancied there’s endless money to be had in marijuana.

Could well be something like that.

p/p




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Right-to-Work Nation?

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The mainstream media has more or less ignored some interesting news out of Wisconsin. It is that the governor, the unflappable Scott Walker, has signed into law a right-to-work bill that covers private sector unions.

This makes Wisconsin the 25th state in the country to adopt right-to-work legislation, that is, legislation that stops any union from forcing workers to support it.

Wisconsin’s action is notable for a variety of reasons. First, it is a traditionally blue state. Second, it is an upper-Midwest industrial state. Third, it has a history of heavy unionization — about one-fifth higher than the national average (8.2%, compared to 6.7%). Back in the mid-1980s, over 20% of Wisconsin private sector workers were in unions.

Also, like Michigan, Wisconsin passed the bill even though its governor was initially reluctant to support it. Walker had originally called it a “distraction,” but after the state senate majority leader pushed the billed through the legislature, Walker quickly signed it into law.

The law did not have bipartisan support. In the state assembly, all 35 Democrats voted against it while all 62 Republicans voted for it. In the senate, 14 Democrats (joined by one turncoat Republican) voted against it, while the remaining 17 Republicans voted for it.

The vitriol reached its peak when a union supporter threatened to gut Walker’s wife “like a deer.”

Proponents of Big Labor hegemony were predictably outraged at Walker’s signing the bill. One union supporter lamented, “It’s going to take 25 to 40 years to correct problems Scott Walker’s done in 4 ½ years.” Phil Neuefeldt, head of Wisconsin’s AFL-CIO, threatened, “We’re not going to forget about it.” And of course our unifying President Barack Obama had to chime in, calling the Wisconsin law “a sustained, coordinated assault in unions, led by powerful interests and their allies in government.”

As if Obama’s whole tenure weren’t a result of the machinations of powerful interests — not least of which is Big Labor.

But then, Walker has made a career of facing down unions. In his first term, he pushed through restrictions on public employee unions’ collective bargaining powers, forced public employees to contribute more to their pension and health care benefits, and gave government employees the right to opt out of the obligation to pay dues to the public employee unions.

These modest reforms appear to have saved local governments in Wisconsin $3 billion in taxpayer dollars and kept property taxes from rising while keeping the number of teachers from being cut. But the teachers’ unions are singing the blues: the National Education Association saw its Wisconsin membership drop from 100,000 to 66,000, the American Federation of Teachers (representing the college teachers) saw a drop of 50%, and the state employees union dropped from 70,000 to 21,000.

For all this, Walker faced near-riotous demonstrations and a recall election, with Big Labor money flowing in from across the nation, to remove him. The public employee unions even tried to remove a Wisconsin state Supreme Court judge who had upheld Walker’s earlier law.

The vitriol reached its peak when a union supporter threatened to gut Walker’s wife “like a deer.” I am always moved by the boundless compassion offered by progressive liberals.

The rhetoric of the Walker-haters aroused by the current law — which, please note, merely gives private-sector workers the freedom given to public sector workers, years ago — has been amazing. But what is to come will almost surely be worse. GOP legislators are now indicating that they will take on Wisconsin’s nearly century-old “prevailing wage law,” which forces governments to pay union-dictated wages on all public works projects.

In the end, what is driving the push for worker freedom is popular opinion, supported by unarguable logic. One recent poll put public support for the right of workers not to support a union at 62%. And the reasons have been the same for decades. First, unions force workers to support candidates and causes they abhor. Second, unions often destroy the businesses that employ the workers. Third, unions violate the human right of free association.

With the action in Wisconsin, half the states in the union now give liberty to workers to belong or refuse to belong to unions. In many of the remaining states, such as California, the stranglehold of Big Labor is too strong to break. Yet there is hope. Should Scott Walker ever become president, with a Congress controlled by Republicans, it is possible that a federal right-to-work law would be enacted.

Should that ever happen, there would be a cry of freedom from American workers that would rock the gates of Heaven itself.

And it could happen.




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Not with a Bang, but a Whimper

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The most recent news on the UAW’s attempt to unionize the VW autoworkers in Chattanooga, Tennessee is interesting.

Despite enormous advantages, including the Obama administration’s blatantly partisan efforts to game the game in favor of the UAW, the union lost the vote. The union that nearly destroyed the American automakers, gleefully driving two of them into bankruptcy — a bankruptcy that ripped off taxpayers for tens of billions of dollars and left one of the companies merely a division of the Italian automaker Fiat — couldn’t overcome its unsavory reputation and convince the workers that it wouldn’t destroy their jobs and city as well.

That was in February. Immediately after the vote, the UAW filed an appeal with the Obama-rigged National Labor Relations Board (NLRB), even though it had earlier said it would abide by the will of the workers. But just before the deadline for its lawyers to appear and argue for voiding the vote, the UAW dropped its appeal. It turned tail and ran.

This capitulation came as a surprise. The union had aggressively pursued the plan, issuing subpoenas against the Republican governor of the state, Bill Haslam, and one of its Republican US senators, Bob Corker, to turn over their staff emails regarding the election, under the theory that the two men wrongfully influenced workers to oppose the UAW. The theory, then, is that the UAW is free to spend tens of millions of its members’ dues every election cycle to defeat Republicans, but the targets have no right to criticize the UAW in return. The UAW is nothing if not fair.

One of the workers who organized the vote against the union, Mike Burton, admitted that he couldn’t explain why the UAW gave up so easily. UAW president Bob King would only say that his outfit wanted to put the “tainted election in the rearview mirror ... and focus on advocating for new jobs and economic investment in Chattanooga.” But the real explanation was suggested by the Wall Street Journal in an editorial from the same day, namely, that even if the NLRB ordered another election at the plant, the UAW would very likely have lost it — making the union look even worse. The editorial also suggested that the UAW may have been afraid that anti-union workers would sue it for violating the Taft-Hartley Act, which prohibits a company from giving a “thing of value” to any union seeking to organize its workers. This VW clearly did by giving the UAW the right to voice its arguments in the plant while denying the same right to the anti-union workers.

I would add the speculation that — given the recent revelations that GM knowingly covered up defects in its cars, defects that killed a number of people, while it was grabbing billions in taxpayer dollars in the bankruptcy operation — the UAW probably fears reminding people that it was behind the crony deal.

The latest defeat for the union comes on the heels of the failure of its drive to organize workers at a Canton, Mississippi, Nissan plant, and its lack of luck so far in organizing the workers at the Vance, Alabama, Mercedes-Benz plant.

These failures couldn’t happen to a more deserving bunch.




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The UAW Smackdown

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A spectre is haunting the American labor movement movement — the spectre of Detroitism.

Last month, the UAW in particular and Big Labor in general suffered a devastating defeat when the workers at the VW plant in Chattanooga, Tennessee voted to reject the UAW.

Big Labor has had and continues to have a lot of influence on the American political system, because of its ability to seize workers’ dues and use them to elect progressive and other leftist candidates for office. But it has seen a massive melting of its membership over the last few decades. In 1983, around 20% of all American workers were members of unions; now, only 11.3% are. And while the percentage of public sector workers currently in unions is 35.3%, in the private sector it is a meager 6.7%.

And in the UAW — the venal organization of a minority of American autoworkers — the figures are even worse: in the last three decades, it has lost 75% of its membership. (The UAW claims it has 382,500 members, but that is out of about 820,000 total American autoworkers).

The Obama administration used every trick possible to help the UAW win in Tennessee.

So for several years, the UAW has set its eyes on the South, where — thanks to the prevalence of right-to-work laws — automakers, mainly foreign ones, have opened plants. The unprincipled union has had the help of the Obama administration, which it helped elect by lavish logistical and financial support, and which in turn ripped off both taxpayers and secured investors in a cynical crony bankruptcy deal to enrich the UAW.

The Obama administration used every trick possible to help the UAW win in Tennessee. First, the president stacked the National Labor Relations Board (NLRB) with union tools by means of “recess appointments” that are probably illegal. The NLRB then allowed unions to use “card check” to win representation; that is, instead of holding a secret ballot election, the NLRB lets a union to be certified if the majority of workers sign authorization cards.

Of course, this opens the door for union coercion of workers, intimidating them into signing under the threat that if they don’t and the union gets voted in anyway, it will retaliate against them.

Some brave workers (represented by the estimable National Right to Work Legal Defense Foundation) filed allegations that they had signed under UAW deception and coercion. The Obama-controlled NLRB dismissed the charges, but the worker outrage was so great that it forced VW — which, as explained below, needed to be forced — to ask that a secret ballot election be held.

Also helping the UAW was IG Metall, the union that represents autoworkers in Germany (and in fact has members on the boards of directors of not just VW, but BMW and Daimler as well). IG Metall is deeply afraid that more and more German auto plants will move to the Southern US, where right-to-work laws prohibit unions from forcing workers to support them, and lower energy costs prevail (thanks to our embrace of fracking — and Germany’s embrace of inefficient so-called “renewable” energy sources).

The NLRB was gaming the system, but VW (under pressure from its German union) tried to give away the game itself. VW pushed for a quick election (within nine days, far less than the average 40 days) and agreed not to speak against unionization. Moreover, VW agreed to allow the UAW to campaign inside the plant itself, and did not allow workers opposed to unionizing the same freedom.

But in spite of the blatant deck-stacking by Obama, his bogus NLRB, the company, the UAW, and the German union, the Big Labor gang was defeated by a 53% to 47% margin. Considering that the opponents of unionization were banned from stating their case in the plant, and considering the hardball tactics of the UAW, this was a decisive defeat for the union. As Art Schwartz (a former General Motors labor negotiator) put it, “If they can’t win this one, what can they win?

There seem to have been several specific factors that led to the workers giving the UAW the bum’s rush. First, the very unfairness of the scheme — letting the UAW speak, silencing its critics, and rushing the election — had to have been infuriating to the honest autoworkers.

Second, Obama made this a personal issue. He attacked Tennessee Republicans in his characteristically snide, mendacious way as caring more for “German shareholders than American workers.” His involvement brought the suffocating stench of his administration to the issue. Workers, in a state that voted for Obama’s opponent Romney by a margin of 20%, were reminded of the extensive corruption, abuse of power, and radical politics regnant in the White House. Grover Norquist, head of the invaluable group Americans for Tax Reform, pointed out the connection between Obama and the UAW on a billboard near the plant. The billboard message was that the “United Obama Workers” had spent millions in union dues to elect the man.

Third, workers were scared off by the miserable history of the UAW’s destructive and selfish war of confrontational tactics against the American automakers. The UAW drove GM and Chrysler off a cliff. VW and the other foreign carmakers pay and treat their employees in the southern US very well. Thus the workers were rightly afraid of losing their good jobs.

Fourth, workers obviously resented the UAW’s massive financial support of progressive and other leftist politicians, who vote for policies the workers generally hate, such as unlimited abortion and the elimination of gun rights. As one worker, Travis Finnell, put it forcefully, “We’re in the South. We have a lot of religion. I don’t want my money going to those causes.” This brings up what is doubtless another reason workers refused to enslave themselves to the UAW: the dues it takes from workers are quite steep — 2.5 hours of pay a month, and 1.15% of all the worker’s bonuses.

As a former General Motors labor negotiator put it, “If they can’t win this one, what can they win?”

Finally, it was well known in Tennessee that VW will soon decide where to locate a major new SUV factory — in Tennessee or Mexico. Please note: Mexico is a country that, unlike the US, has a free-trade agreement with the EU. The workers don’t want to give the company another reason to locate there.

But I suspect that the overarching reason for the UAW’s ignominious rout was the specter of Detroit. The Democrat-Big Labor complex has utterly destroyed one of America’s iconic cities. Between them, the UAW, the iniquitous city employee unions, and a mob of unscrupulous Democratic politicians drove two of the domestic automakers and the city itself into bankruptcy. As one worker said in a TV interview, the “common denominator” of the city’s collapse into a cesspool of decay was — the unions.

The reaction of the union was as predictable as it was despicable. Despite assurances that it would honor the workers’ decision, the UAW has just asked the Obama jury-rigged NLRB to call for a revote. The union is whining about “a coordinated and widely publicized coercive campaign” by outside interests (namely, Tennessee Republicans) to deprive the VW employees of their voices. The UAW naturally never mentions the coercive campaign by Obama, his stooge-packed NLRB, IG Metall, and the UAW itself to shove a ruinous union down the workers’ throats.

We will see if these miscreants can carry this off.




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The Ghost of Elections Yet to Come

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On February 11 a mayoral election took place in my town, San Diego. I’ve been thinking about it ever since, and on reflection, I believe it has considerable significance for the nation as a whole. It was a test of current Democratic electoral strategy, and of what may become Republican electoral strategy, if the Republicans are canny enough to adopt it.

The contestants were David Alvarez, Democrat, and Kevin Faulconer, Republican, both city councilmen. They were running to succeed disgraced Mayor Robert (“Bob”) Filner. Filner had been thrown out of office because of serious — though, in my view, overstated — charges of sexual misconduct. Other charges, even more serious, involved political bullying and bribery. These latter charges, unfortunately, have not been so closely considered, given the overwhelming emphasis that our society places on sex in all its forms. Both the sex charges and the political charges were important to Faulconer, who was a leader in the drive to oust Bob Filner. As for Alvarez, he was a Filner confidant who turned against him. In other, less kindly, and perhaps less objective words, Alvarez was a Filner flunky who stabbed him in the back.

Both Filner and Alvarez regarded themselves as Progressives. Both emphasized leftist political programs and played strongly to hardcore ethnic sentiments — Mexican-American and Mexican nationalist. Alvarez ran an ethnically oriented mayoral campaign with a borrow-and-spend platform to attract disciples of “growth,” “jobs,” “planning,” and share-the-wealth. Most importantly, however, he was the inheritor of Filner’s mantle as labor-union apparatchik.

A few years ago, San Diego, like many other California cities, was on the verge of bankruptcy because of the insanely favorable deals that city officials had made with city workers. Now the place is sort of back on its feet, but the unions remain as greedy as ever. Alvarez ran with about 20% more money than Faulconer, and about 80% of Alvarez’ money came from government employee unions. It was an instance of the employees trying to take over the company — except that in this case, the company has the power to make everyone pay for whatever the employees do.

Faulconer’s supposed liability was that he (like all other Republicans, according to the common mythology) was the candidate of rich people. Yet the donations of the rich were only a minority of his campaign fund, which, as I mentioned, was much smaller than that of Alvarez, the friend of the poor and excluded. It was also charged that Faulconer was the candidate of white old men. This wasn’t said in so many words, but it was conveyed in the usual campaign style and with the usual so-called reporting on the usual so-called public opinion polls. When Alvarez seemed, in late polling, to be narrowing the gap with his opponent, it was said in the local media that Faulconer’s fate depended entirely on the willingness of white old men to totter to the voting booth.

Alvarez ran with about 20% more money than "the candidate of rich people," Faulconer, and about 80% of Alvarez’ money came from government employee unions.

Now, Alvarez is only 33 years old, and the Faulconer people made a huge and really silly issue out of his youth and inexperience. Faulconer himself is only 47 — fairly young for a successful politician. Both are reasonably personable. Neither has skeletons in the closet. So far, there’s a rough equality. But what about political customs and allegiances? Like much of the rest of the country, San Diego has a long history of moderate Republicanism. Still, in 2012 Obama won 61% of the city’s votes. Obama endorsed Alvarez; and the Democratic labor unions, both local and national, paid for an immense get-out-the-vote drive. For weeks before the election, people with Spanish surnames and people in left-leaning parts of the city, such as mine, were deluged with propaganda. The calls and mailings came at them from both sides, but it was representatives of Alvarez who came and knocked on their doors, sometimes returning three or four times. On election day I could hear, all afternoon, young men with big voices pounding on the doors of people with Spanish surnames and calling them out to vote. Feeling the muscle of their organization, the Alvarez people became confident of victory.

Then, on election night, their hopes were ended. Alvarez got about 45% of the vote, and his Republican opponent got about 55%. It’s possible to say that the turnout was a few percentage points higher in the Faulconer districts than in the Alvarez districts, but there were exceptions both ways. Republicans are usually more certain to vote than Democrats, despite all the get-out-the-vote efforts on the other side — but not always. As for rich people, the latest polls had shown only a 1% advantage for Faulconer among the well-off. Several wealthy districts went for Alvarez or almost did. As Bill Bradford used to say, “Wealth is liberal.”

So what are the lessons for America as a whole? They are all probable, not definite, but there is some clarity here.

  1. Obama is a detriment, if anything, to Democrats’ campaigns.
  2. Get-out-the-vote has been badly overrated.
  3. Ethnicity has been badly overrated.
  4. As professional pollsters know, though seldom say, Democratic voters often exaggerate their commitment to vote, and other voters often tell people on the phone that they are planning to vote for someone of minority ethnicity, just to sound nice.
  5. The identification of Republicans with “a dwindling number of old white men” is silly.
  6. Unions continue their furious slide downhill.
  7. A Republican campaign that focuses not on “issues” but on “the work to be done” is likely to succeed. This “work” is not “restoring a sense of community” or “addressing income inequality” or “valuing education” but actual stuff you can see getting done, like synchronizing the traffic lights, getting the bums out of the library restrooms, or lowering the tax rate.

San Diego has always been a socially liberal town, informal and discretely religious. Its social liberalism is balanced by the strong social conservatism of its large military population. But these isms are apples and oranges — social liberals in one sense can be social conservatives in another. I often say that San Diego is as far west as the Midwest gets. In that sense, it is a reflection of America.

Faulconer’s campaign was about financing and maintaining a basic San Diego — fixing the roads, paying the bills, and not paying anybody extra just because he’s union labor. It was not about moral or metaphysical issues — gay marriage, abortion, income inequality, whatever. Alvarez probably wished that it had been about those things. His own campaign persistently assumed that all gay people and Mexican American people and female people and workin’ people are or ought to be Progressive Democrats who favor spending money that you don’t have and making social promises that you can’t keep. It additionally assumed that all Republicans are old male white homophobes, and have a moral screw loose, being opposed both to “diversity” and to “unity.” These demographic assumptions now appear not to be true or electorally useful, and why should anybody have thought that they were?

I imagine that if the Republicans can talk about paying bills and fixing roads, they can show that those assumptions aren’t any truer about America as a whole than they were about San Diego. Do I think that talk of this kind is the be-all and end-all of politics? I do not. But I’d rather have the bills paid and the roads fixed than see another Obama elected.

rdquo; or




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Detroit

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I was born and reared in the state of Michigan, and its affairs remain very interesting to me. I regard Detroit’s bankruptcy as the virtually inevitable result of events I’ve been witnessing throughout my life.

First there was the triumph of modern labor-management relations, which kept the price of labor sky-high, as long as junky cars could be unloaded on a market largely free of good-quality foreign goods. With the help of union-friendly politicians, labor disputes were settled amicably, usually with an enormous increase in benefits for labor. When there actually was a strike or layoff, which happened so rarely that it was regarded as a kind of natural disaster, challenging the existence of God, Michiganians were treated to constant interviews with baffled assembly-line workers, who informed the 10 o’clock news that if this thing continued for even a day longer, they couldn’t meet the mortgage on the house at the lake, and they might even have to sell the boat. It was hard, really hard, to meet the payments on three cars. As for savings, who could keep money in the bank, considering all these expenses?

Such were the rewards of unskilled labor. So why should anyone learn any skills? Then came the nervous collapse of both labor and management, once genuine competition took hold.

But something else had happened, simultaneous with the monopoly of the Big Three automakers and their inseparable companion, the United Auto Workers. This was the triumph of Great Society liberalism and the new class of managers and planners who purveyed it. Many of the big chiefs came from auto company management. Remember Robert McNamara? He’s a sample. These people demonstrated that they could be failures in civic planning as well as business planning. After the 1967 race riots in Detroit, they backed every sorry, money-losing civic improvement project they could think of, applying social engineering to the city’s problems. You can guess how well that worked.

Tax money that is used to do anything more than protect your rights is going to be devoted to building things that will violate your rights by taking yet more taxes.

The logical product of the Great Society was the flight from Detroit of everyone, white or black, who could possibly escape and buy a home in the suburbs. The city’s population went from 1,850,000 (1950) to 701,000 (2010). The escapees left behind them an inner city that was poor in productive workers but rich in people who voted for a living. The natural product of that was a chronically corrupt political class, keeping itself elected by class warfare and racial resentment.

Now the city of Detroit is so poor that it is letting large areas of formerly choice real estate go back to the fields and forests. It is arranging not to keep the streets open, not to keep the power running in whole sections of the city. The people I feel for most are the African-American families who have hung on, kept their modest houses and modest jobs, survived the violence and criminality of their neighbors, and now find that their own jealously guarded homes are to be abandoned by the city they struggled to keep in operation. Looking down Woodward Avenue, once the Champs Élysées of the Midwest, I see block after block of emptiness — or worse: wonderful early 20th-century housing, places to live that would be worth a fortune to almost anyone, anywhere else, but that are now hopelessly derelict.

I suppose that most people understand these things, in general. But one factor that should be emphasized, and almost never is, except in a way that contrasts with the truth, is the influence of that mundane but vicious thing, the tax. It is oft lamented that Detroit’s taxes can’t keep up with its expenditures. The problem is that the taxes existed at all.

Right now, Detroit’s municipal income tax is 2.4% for residents and 1.2% for nonresidents who work in Detroit (if that be not a contradiction in terms). Before 1999 these taxes stood at 3.0 and 1.5, respectively, and were authorized by a special provision in the state tax law allowing cities with populations of more than 600,000 (of which Michigan has only one) to exceed the statewide cap of 1.0 and 0.5%. In 1999, Detroit began slowly and minutely reducing tax rates in accordance with a deal, politically extorted from the state, that gave the city a whopping special subsidy from the revenues of Michigan as a whole.

I say “special,” not just because Detroit was getting a deal that, say, Muskegon didn’t get, but because Michigan had already, for many years, been subsidizing major Detroit projects and institutions — something that did not prevent Detroit politicians from erecting giant signs in front of them, bearing their own names.

Anyhow, in 2011, which is about the time when the probability of a Detroit bankruptcy became common talk in Michigan, the Detroit income tax represented about $230 million out of the city’s $1.2 billion general fund revenue. This means that the average man, woman, or child connected with this impoverished town was somehow generating over $1,700 in revenue for the city alone, about $330 of it from income taxes. Overlapping with the income tax, of course, are many other taxes, including property taxes, which generate several hundreds of millions of dollars and would generate more if the owners of half the land parcels in the city were still paying their property taxes, which they aren’t.

Then there’s the income that the city gets from government-licensed gambling and, ah yes, the income it gets from corporate taxes. In 2012, the city council doubled the corporate income tax rate, taking it from 1 to 2%. The excuse was a threatened 10% pay cut for municipal workers. “I can't in good conscience,” said one council member, “ask city employees to give back 10% and not ask the corporate community to share in the sacrifice by raising their taxes." Oh. OK. I see the logic.

Meanwhile, the state of Michigan has been cooperating with Detroit in attempting to create a new stadium for the Red Wings hockey team, a stadium that, its advocates insist, will generate “as much as $1 billion in economic development over 30 years.” It won’t, of course. People will just keep driving into Detroit to see the games, then driving out again. But over the same 30-year period, the taxpayers of Michigan will have to pay $444 million for bonds to subsidize this scam. Let’s see . . . if there were a billion dollars of economic development (over 30 years, of course), and it were highly profitable (which it won’t be), it might possibly earn, say, 10% on investment, which means an average profit of maybe $22 million a year (it can’t all happen at once), from which the taxpayers of the state of Michigan would receive, in taxes from the grateful beneficiaries of their subsidy, something less than $1 million a year.

So that’s the way — not bread and circuses, but welfare and hockey. Isn’t there an old saying about castles being erected on the ruins of cottages?

The more Detroit taxed, and the more Michigan taxed and subsidized, the worse things got. And continue to get. But why oh why? Because, as Isabel Paterson explained long ago in The God of the Machine, tax money that is used to do anything more than protect your rights is going to be devoted to building things that will violate your rights by taking yet more taxes. The things it builds may simply be dead weight, from an economic point of view, and will therefore have to be supported by continued taxation. Or, more likely, they will be institutions devoted to extracting yet more money from the productive members of society.

The illness of Detroit has been blamed on “white flight,” as if whiteness were some magic elixir.

These may be institutions such as the welfare industry. These may be institutions such as Detroit race politics, which long defended and empowered every crook in the city government, so long as he or she was an African-American, and is currently demanding that Detroit’s debts be “canceled,” thus neatly averting the consequences of bankruptcy. Or these institutions may be government-“stimulated” businesses, erected by subsidies and continually devoted to extending them.

But two things are certain. The beneficiaries will not “give back.” And they will never, never be the productively working black, white, or Asian population of anywhere. These are the people who are tricked into voting for the money-extraction industry, told that more taxes are needed to support the schools or the police or the fire department or something, or defeating the hated Republican Party, and then, mysteriously, find that every increase in taxes is turned into more guns aimed against them.

The illness of Detroit has been blamed on “white flight,” as if whiteness were some magic elixir. If you had any thoughts along those lines, the social history of Detroit will show you that it isn’t. The illness has also been blamed on mysterious “changes” in the auto industry. That’s not the cause either. Business and labor that aren’t on the take from subsidies — subsidies in the form of bailouts, friendly legislation, and noncompetitive labor laws, all of which the Detroit auto industry got, and fattened on, and sickened on — can “change” without doing grave damage to their communities. And the illness has been blamed on “massive corruption,” as if corruption could be massive without the profits it derives from laws and taxes.

Enough. Just look at who’s taking money from whom.




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