I think comparing horse and buggy to unions is an imperfect analogy. One is a product, another is a social structure. While I readily agree that a horse and buggy are less efficient than cars as a form of transport, I’m not so sure that the union has been superseded by some other structure as a mechanism to counteract the inherent asymmetry of one employer bargaining with a thousand individual employees.

Furthermore, the products that are made by the Industrial Age-era corporations of yesteryear are still being made and consumed, unlike the horse and buggy, and typically using the same form of production that has existed for decades. It’s just that the production has been relocated elsewhere.

I fully agree with you that products, specific technologies and skillsets, etc. fall by the wayside by the inevitable march of progress. But the social structures (I use that term broadly to include legal and political structures) such as the union, the corporation, the trade treaty, etc. have survived for hundreds of years, and will likely outlast us.

The death of the union in America has not been because we Americans now find the idea of labor protections or collective bargaining antiquated. Nor has it been obsoleted by better forms of organization that allow us to pursue those goals more efficiently. It’s because for the past 30 years (and perhaps longer), the corporate world in our country, along with the political leaders in their pocket, have decided that such ideals should take a backseat to the pursuit of corporate profits and the protection of the rights of capital and property.

It’s therefore no surprise that we have managed to empower and protect the rights and privileges of American corporations (a structure even more ancient than the union) around the world in the face of foreign competition, while not doing the same for American labor. This was not inevitability nor progress. Just a change in priorities. It is not an easier or harder task to protect labor vs protect capital in the global marketplace. It just matters which one (I believe we can do both, BTW) you wish to pursue.

So the real question to ask, Doc, is has American society truly made such a choice? Do the majority of Americans — including our corporate execs, who once upon a time actually believed it was in their interest to have well-paid workers — believe that labor interests should be subjugated to corporate and capital interests? If that’s the case, then unions indeed are no longer needed. But I suspect that most Americans don’t believe such a thing, and corporate apologists mask their debasement of labor in the rhetoric of inevitable progress rather than admit the truth that they’ve carried out a massive change in priorities that most people probably wouldn’t agree with.

All this being said, I do believe corporate america will very quickly realize the importance of paying their workers well. As Michael has mentioned repeatedly, who do they think will keep buying their stuff if no one has any money to do so? The general consensus in the past (before Reagan) was that wage growth (not inflation, but sharing productivity gains with workers) was an essential part of growing the economy as that was the only safe way to increase consumption. But that consensus changed, and it was felt that one could hold down wages while still increasing consumption (thereby maximizing profits) by fostering increases in asset values and debt. Now that we are seeing a rapid unwinding of that debt and a destruction of asset values that weren’t sustained by underlying incomes, perhaps our economists will realize once again the value of wages in growing an economy…

B.C.’s recycling industry hit by global slowdown

http://www.cbc.ca/canada/british-columbia/story/2008/11/19/bc-recycling-industry-slowdown.html

For certain materials, there is no market, so people who are collecting the recyclable materials just can’t sell it to anyone,” Welman told the CBC.

Some goods are fetching only a third of the price they did in September; some recycling companies are laying off workers and others have stopped collecting certain types of plastics altogether.

Welman said the recycling council is holding a special meeting on Thursday with industry members to brainstorm about what to do next.

You completely misconstrue my point: it’s not a conspiracy to bury the UAW, it’s a consensus, albeit one that is tiptoed around by our betters when they are speaking in public.

What precisely do you think the Mitt Romney’s and Richard Shelby’s of the world mean when they speak of lowering wage rates? Factor in the gravitational pull upon management for absolute – or as close as they can get – control of the work process, and you have a dynamic that spells union busting, which is what we have here.

You also misunderstood me when you said that the Big 3 are behind this attempt to kill the UAW. That’s an untenable position on it’s face; whatever their personal feelings and preferences, auto management knows that they need the UAW’s pull – such as it is – with the Democratic Party.

It should go without saying that the government should not release a nickel until the Big 3 reconfigure their product line and make plans to re-tool for a future based on more energy-sustainable technologies. But again, was it the auto workers who made the decisions on design and marketing for the past forty years?

My final question has still not been answered by those who trumpet a race to the bottom here and around the world: who’s going to buy your junk and pay your mutual fund management fees when they’re living in their cars and eating spam for Sunday night dinner?

That was an intense reply. I don’t know if I should thank you or curse you.

I think there is a sense of inevitability in this evolution, which is related to the obligation of how far society has to go to subsidize systems and structures that are inefficient? A state of socialized welfare is somewhat counter to capitalist Darwinism, where the market determines success and failure. The car business is over-leveraged and poorly run, but the same can be said for many things relating to our infrastructure. We are at a generational crossroad, where the journey has ended and now we sit here on the road wondering how we got here.

Synthetically propping up whip and buggy industries or tossing some random percentage of GDP at bailing out wagon wheelwrights is a way to save the past and to not embrace the future. Saving Detroit is all about clinging to the past and holding on to the same mistakes and then being caught in a catch-22 loop that will bring us back to where we are, sitting here with deja vu (all over again).

The reality is, business cycles often displace old outdated skills as society moves on with some form of new innovative adaption. It is lamentable that people are often forced into change and to remain in a lifelong mode of being competitive, but there is a sense of inevitability within the motions of progress.

IMHO, the notion of union strength in numbers (solidarity) is totally negated by the reality of global production and the ability of manufacturing plants to be adaptive and highly dynamic and efficient — versus being stagnate or static and existing in only one place, like Detroit. The consolidation of old world industry and the attraction to employment and population is reminiscent of shoe factories in New England and a wide range of textile manufacturing from the days of Oliver Twist — but as you recall, those days are over and there was not an effort by society to save outdated technology.

Thus, government as we know it, will be fascist and obviously back a corporation, because of tax revenues and structure, and that collusive partnership will help create jobs. The current problem in Detroit is not going to be solved by a bailout, because The Big Three have no motivation or incentive to make a better product

Sermon 1.2

Your ball dude, I’m burned out and will find clarity and specifics later…

I apologize if I misunderstood your position and appreciate your measured and reasoned response.

I agree–IF we are going to have socialism, then for goodness sakes, a person should be able to go to the freaking doctor and 10 to 20 to 30 years of hard work is deserving of a damn pension.

The UAW, though, isn’t doing its constituency any favors if it expects what is in essence a 95% unemployment benefit.

Time to go now…and ponder what happens if C actually does swirl down the toilet.

I apologize for the confusion. While I do believe there have been certain companies (namely the airlines) that frequently use bankruptcy primarily as a means to force labor concessions that they can’t get at the bargaining table, I don’t think that’s the primary reason why GM and the others are predicting bankruptcy. The Big Three are going bankrupt because they’re running out of money and can’t survive. You’re right in that regard. But my concern is that the bailout will occur on the backs of labor.

As for your last paragraph, I’d like to make 2 points:

1) I believe that current government policy favors management over labor (especially bankruptcy codes that IMHO make it too easy for companies to break labor contracts and raid pension funds, and trade agreements that allow corporations to use labor arbitrage), so I don’t think there’s a symmetry of power that’s essential for efficient negotiations in a free market.

2) That said, since those rules won’t be changing anytime soon, under the rules we have today, I highly, highly favor GM and the others going bankrupt, even understanding that that will lead to less jobs / poorer-quality jobs. Precisely because I believe in free markets and if GM and UAW couldn’t figure out a way to compete together against other companies, they need to face the consequences. If GM goes into bankruptcy, I’m willing to accept whatever a bankruptcy judge decides to do with the UAW contracts.

But… if the government decides to intervene, then I absolutely expect all of the bailout money to go to the twin goals of protecting jobs and promoting a long-term healthy domestic auto industry. Those are the only two goals that the government should spend taxpayer money on. Whether those jobs and that domestic industry remain under Big Three management or Eur/Japan management shouldn’t be a concern (and indeed I’d favor foreign ownership since the Big Three have proven so incompetent so far). That’s why I proposed using the bailout money to takeover pension plans and then give away the Big Three’s assets for free to whatever company is willing to keep the factories running while maintaining the current contracts.

The free market’s one thing, but if we’re going to spend $25 bil on socialism, let’s at least spend it on socialism for the workers…

doc holiday-
In your post, I get a certain sense of inevitability that despite whatever good might have come from unions, those days are over thanks to circumstances beyond our control and we just need to accept our fate and move on to the big unemployment line in the sky.

Nothing is further from the truth. The fact that the Big Three can move their factories to Mexico or somewhere else and engage in labor/environmental/regulatory arbitrage is not some accident or inevitable force of nature. It was the deliberate goal of the numerous multilateral and bilateral trade agreements negotiated by our government.

After all, one could make the same argument about the knowledge industry: how can microsoft or hollywood expect to protect their copyrights in the face of unregulated DVD factories in China? Better to give up and move on to something else right? Except that’s exactly what we expect and fight damn hard to do. Indeed, we fight for them so hard that in the case of patent-protected medicines, we essentially tell developing countries that they need to accept a certain number of preventable deaths (from people unable to buy patent-infringing local copies of expensive foreign drugs) within their population in exchange for the benefits of lowered trade barriers.

Our current trade system places high priority on the protection of intellectual property and free capital flows while placing no priority on labor standards or environmental protection.

That’s fine: it’s what we as a country have chosen to do. But protecting IP is as difficult and “unnatural” as enforcing labor standards. Yet through hard work and careful negotiation, we’ve been largely successful in maintaining a healthy IP industry in this country. And similarly, if we as a country believe that protecting the bargaining power of labor is a good thing to do, then we can accomplish that as well. If Mexico is willing to enforce drug patents at the risk of their citizens dying, they’ll surely be willing to enforce labor standards at the risk of losing a few jobs. It’s up to us as a country to decide that that’s worth fighting for.

One final point: you mention the Japanese. The poster child of their current success is the Prius, an innovative, fuel efficient car that even today has a waiting list of willing buyers. It was conceived, designed, and produced in Japan. Every single one of them comes from a factory in Japan, a factory that is unionized, pays good wages, ensures job stability, and provides benefits far in excess of what the UAW has been able to negotiate here in the U.S. If the death of the union is a foregone conclusion, as inevitable as the force of gravity, someone needs to tell Asia and Europe, who seem to be able to compete world wide without dismantling the labor protections they’ve deemed important.

I’m not criticizing the UAW for negotiating the Jobs Bank Deal. I’m criticizing the inane analysis provided by Michael—that you agreed with— that… “The real issue is that this crisis is being used to bury the UAW.”

It’s absurd ideological tripe that the Big 3 is merely engaging in some sort of brinksmanship to negotiate—or extort—a better deal. What are you going to tell me next—that this is all a big ruse so the Big 3 can avoid fuel efficiency mandates because the Big 3 doesn’t believe in global warming?

I do suppose, however, that if the Big 3 does get a better deal for itself, then by your reasoning they should be commended because–as you say:

“Hey, the corporation’s job is to look after its shareholders’ interests. It’s the union’s job to look after the worker’s health. If the UAW gets screwed in bankruptcy—because it was obstinate in holding onto it’s unworkable contract for themselves, tough shit.”

If you believe in free markets, then what is wrong with the UAW negotiating as hard as it can for the workers it represents? If this was a really bad deal then the management should have fought against it. In capitalism, there is no “fair price”, only what you can convince a buyer to pay.

I won’t argue the economic “fairness” of paying people not to work (although there might actually be such a case: auto workers are highly trained and productive, and if you expect to restart the plant in a few months, it’s probably far cheaper to keep your experienced workers around rather than rehiring new guys). I’m merely arguing that the UAW decided to negotiate for such provisions and got them. What’s wrong with that?

That said, is it really all that uncommon to be paid while not working? Perhaps for a blue collar working stiff, but plenty of lawyers get paid retainers to hang around in case they’re needed, and CEOs are frequently provided with lavish “pensions” essentially paying continued salary and extensive perks such as the use of corporate jets and housing even after they’re retired and ostensibly will no longer provide any sort of service to the company. And how about corporate directors who are paid millions to be flown to a lavish meeting 4 times a year to rubberstamp the CEO’s recommendations?

Regardless, in negotiations between auto companies and the UAW, there is only one government interest at stake: to ensure that both sides of the bargaining table have essentially equal power to advocate for their interests, and that there are no govt based advantages to tilt the scale in one way or another. After that, let the market work. What 2 private parties negotiate among themselves in a free market is not the question. In that sense, after nearly 30 years of union busting and erosion of collective bargaining rights, I highly doubt anyone would claim the govt unfairly favors labor these days.

And if I was Chris Dodd, I would have said “Hey, the union’s job is to look after its workers interests. It’s the management’s job to look after the company’s health. If the management negotiated a poor deal for themselves, tough shit.” (Yes, if I were a standing Senator, I’d say the s-word on national TV