The first thing that strikes me about the Old Man's last two posts is the absence of any external sources of information. We are expected to simply take it on faith that the he has all his facts straight--a risky proposition, considering Fox News consumes 90% of my parents' household electricity bill. Rather than examine every claim, assumption, and insinuation, let me just quickly take a small sample from the Old Man's posts and compare that sample with reality.
I Googled "Wilma Liebman" and found some great information. Pres. Obama did appoint her as chairman of the National Labor Relations Board. This is not a controversial choice, since she has served on the board since 1997, was appointed to it by Clinton and (twice!) by Bush, and has a long record in labor, government, and law.
The Old Man quotes her as saying "What institution will be as effective in controlling the randomness of fortune of democratic capitalism?" Therefore, he says, she does not "believe in" democratic capitalism. But that does not logically follow from her statement. She merely thinks a certain institution [unions] can control the unpredictable ups and downs of fortune in democratic capitalism. I can think of at least one other institution which serves a similar purpose: the Federal Reserve. But the Fed is an institution which protects (among others) an elite class of wealthy private investors--the brilliant custodians of our most recent financial catastrophe--whereas unions merely protect millions of ordinary employees. Therefore, the Fed is within the bounds of "democratic capitalism" while unions are evil socialism.
The quote in question comes from Liebman's scholarly article, Labor Law Inside Out. I went ahead and did the unthinkable and actually read the paper in its entirety. Anyone who reads it will see that she does not argue to "allow unionization without elections". Her position is quite the opposite. What her paper demonstrates is that there was an unprecedented and unfair change in labor policy during the Bush years in opposition to union representation. Liebman writes:
A series of decisions of the past five years signal a serious shift in policy. These decisions, each with significant dissenting opinions, can be explained only by the Board’s present orientation toward protecting employee free choice only in the narrow sense: taking special care to ensure that employees are free to refrain from union activity and to reject union representation, while showing less concern about the right of employees to choose (and keep) a union.She goes on to explain what the precedents were (citing particular cases) for equitable treatment between employees and employers:
St. Elizabeth Manor and Lee Lumber sought to preserve the stability of the bargaining relationship by giving the parties a chance to make the process work before the union’s status was tested, and yet both respected employees’ freedom to reject or change representation after a reasonable period for bargaining had elapsed. Levitz Furniture permitted the employer acting on its own, without a Board election, to honor the freely expressed choice of a majority of its employees to reject union representation, but [eliminated the] “good faith doubt” standard [which allowed an employer to reject union recognition without an employee vote].She explains how the Board, during the Bush years, rejected union elections and longstanding precedents, citing several cases in particular:
The Board majority, agreeing with the dissenters in St. Elizabeth Manor, held that employees of the acquired company should be allowed to “exercise their statutory rights and vote out the incumbent union.” (Id. [emphasis added]). In other words, the incumbent union in a successorship situation will not be entitled to a reasonable period for bargaining with the new employer, insulated from challenge to its status.I urge anyone interested in the topic to read the report and contrast it with what was quoted out of context from the report. Unfortunately I do not have time to check all the other claims/accusations, including the ones about ACORN. But the disparity between what was said about Liebman, and the truth about Liebman, gives some reason to pause before accepting the version of reality presented without evidence in the last two posts.
...
And, in Wurtland Nursing & Rehabilitation Center, 351 NLRB No. 50 (2007), the Board majority decided that the employer had lawfully withdrawn recognition from the union based on a petition signed by over 50 percent of employees seeking “a vote to remove the Union.” ... [The Board rejected] the dissent’s argument that the employer should have let a Board election determine employees’ sentiments about representation...
...
In turn, employee free choice is increasingly construed to minimize the choice of employees who selected union representation. Unionized employers are given a longer “leash” as “vindicator”9 of their employees’ rights by unilaterally withdrawing recognition, rather than by using the Board’s election machinery to test the union’s majority.
While unilateral employer action to withdraw recognition from a union is apparently favored (so employees do not have to endure representation if they do not want it), no parallel concern has been shown for employees who have voted for union representation but have to wait for legal challenges to be exhausted in order to enjoy its benefits. Correspondingly, the Board has recently made explicit that unilateral employer action to recognize a union—without a Board election—is not favored.
...
What the Board has now created is a complicated bureaucratic procedure that deviates from long-established doctrine by (1) allowing 30 percent of the unit to compel an election to vote on representation, notwithstanding that a majority has just chosen union representation, and (2) permitting a challenge to the union’s majority status without a reasonable time for bargaining having elapsed. Also, by requiring the posting at the workplace—after the voluntary recognition occurs—of an official notice informing employees of their right to file a decertification petition, the Board is breaking new ground. No equivalent workplace posting is required to notify unrepresented employees of their right to select union representation, or of their rights generally under the Act.
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By effectively giving employers greater freedom to determine whether their workers will have union representation, the current Board’s approach threatens the basic, and unique, aim of federal labor law: empowering employees to act collectively and so to counterbalance the power of employers over their work lives....
Employees may well choose, freely, to decline unionization, to reject the union that has represented them, to deal with their employers individually, and to cede to employers all effective control over the workplace. But the Board is warranted in adopting legal rules to ensure that the choice is genuinely free and that it is exercised by employees themselves, not by their employers in their name.
One thing is true: Obama has indeed "repaid" the 12.4% of Americans who are part of a union, and who helped elect him, by appointing someone who thinks union recognition should be based on elections, not unilateral employer withdrawal. Normally, when elected representatives "repay" millions of voters and supporters by correcting unfair policies, we call that democracy. I hope to see more of it.
-Freyguy
(Below: 1912 Lawrence Textile Strike)
I am usually awed by the fact that even though I seldom agree with him, the young Freyguy makes excellent points. But when he states, in reference to Wilma Liebman that: “She merely thinks a certain institution [unions] can control the unpredictable ups and downs of fortune in democratic capitalism” I am stunned. Frankly I don’t know what that means and I am afraid to ask. One is left to wonder which of the many dimensions that physics concocts the young Frey is operating from.
ReplyDeleteAnother of the points that The Old Man made was about Card Check. I have heard pros and cons with many liberals saying that conservatives are exaggerating and that this will merely level the playing field. But when an old warhorse like George McGovern comes out strongly against this piece of would-be legislation because it is undemocratic, I think liberals should take notice. In fact, I think the media should take notice as well. The media certainly takes notice every time a prominent Republican comes out against a conservative piece of legislation. But perhaps that will have to await the arrival of post post-partisan politics.
FreyGuy recently stated:
ReplyDelete“The Fed is an institution which protects .......an elite class of wealthy private investors”
The Fed’s role (from FreyGuy’s own link: http://www.federalreserve.gov/pf/pdf/pf_1.pdf) is fourfold:
• conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
• supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
• providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
It uses four tools to effect these missions:
• Open market operations—the purchase or sale of securities, primarily U.S. Treasury securities, in the open market to influence the level of balances that depository institutions hold at the Federal Reserve Banks
• Reserve requirements—requirements regarding the percentage of certain deposits that depository institutions must hold in reserve in the form of cash or in an account at a Federal Reserve Bank
• Contractual clearing balances—an amount that a depository institution agrees to hold at its Federal Reserve Bank in addition to any required reserve balance
• Discount window lending—extensions of credit to depository institutions made through the primary, secondary, or seasonal lending programs
Could FreyGuy please enlighten us on which “elite class of wealthy private investors” he’s referencing? Is it:
• the bank’s employees?
• Its shareholders?
• Its borrowers?
• Its depositors?
• Someone else?
I think I can safely say, after 30 years of experience complying with Fed Reserve regulations, that the Fed’s purpose in life is to protect borrowers and depositors by ensuring the safety & soundness of the nation’s banking system, although, admittedly, its track record has been somewhat dismal of late.
Generations ago, Thomas Jefferson wisely observed:
“If a nation expects to be ignorant and free, ...., it expects what never was and will never be”.
So, following Jefferson’s spirit that education perpetuates a nation, I’m happy to learn if there’s some ‘elite class of wealthy private investors’ I’m overlooking.
Fred,
ReplyDeleteWhy so stunned? If certain changes create a situation where management/stockholders stand to gain at the expense of employees, a union will serve to counter this. Management already forms tacit "combinations" of its own, at least according to Adam Smith when he wrote 'Wealth of Nations':
"What are the common wages of labour, depends every where upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.
...
We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of. Masters too sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people."
Good point about the Card Check.
John,
ReplyDeleteWhat I said in full was: "But the Fed is an institution which protects (among others) an elite class of wealthy private investors--the brilliant custodians of our most recent financial catastrophe--whereas unions merely protect millions of ordinary employees. Therefore, the Fed is within the bounds of "democratic capitalism" while unions are evil socialism."
The words "among others" are important here. Of course, stable financial markets are a good thing for everyone. But surely any analysis will reveal certain groups of people have a more direct and larger stake in financial stability than others (and not just in terms of avoiding all-out crashes, either). I could be wrong, but I suspect the most interested group will be certain bank employees (like the upper management rather than the janitor), certain shareholders (the ones who own a lot of shares), certain borrowers and lenders, etc. I am thinking of the class of people the Wall Street Journal and other business papers offhandedly refer to as "the masters of the universe".
Of course, there is nothing wrong with that, by itself. And I am not bashing the Fed.
I'm merely contrasting attitudes I have observed towards two institutions. Both mitigate the "randomness of fortune" in democratic capitalism. Yet the Fed is acceptable in principle, unions are socialist and corrupt in principle. I think the attitudinal bias may have to do with the fact that Rupert Murdoch and the other "masters of the universe" have (sometimes) conflicting interests with millions of employees.
Is it just me, or is 99% of the business "news" devoted to the slightest fluctuation in stock prices, and company swaps among management/investors? Considering 12% of Americans are in a union, and many more are lower-level employees, it's strange more coverage is not devoted to working conditions, wages, union affairs, etc. We get an in-depth bio of the new CEO of some large company, but what about the new union rep.?
I wonder if this skewed coverage does not contribute to the automatic acceptance of what Adam Smith called the "tacit" cooperation among management, acting "with the utmost silence and secrecy".
"Wealth Managers: the New Masters of the Universe"
ReplyDeletehttp://www.independent.co.uk/money/invest-save/wealth-managers-the-new-masters-of-the-universe-437876.html
Do you think that "democratic capitalism" is an oxymoron? Aren't they incompatible? Capital/wealth (and thus power) disparities inevitably influence extraeconomic decision-making procedures.
ReplyDeleteKeep up the awesome blog! Next time you visit MU, I'll buy you a drink and you can explain to me how the LHC works.