Front and Center

Politics, society, and other random randomness

Category Archives: unions

In Wisconsin, a Union Shakedown in the Name of “Supporting Workers Rights”

The story in Wisconsin continues.  The bill taking away state employees ability to bargain for things other than wages may have been passed, but a judge has kept the bill from being put into force due to possible violations of a 24 hour meeting notification rule.  Meanwhile, union members are telling businesses to openly support them or be boycotted:

Members of Wisconsin State Employees Union, AFSCME Council 24, have begun circulating letters to businesses in southeast Wisconsin, asking them to support workers’ rights by putting up a sign in their windows.

If businesses fail to comply, the letter says, “Failure to do so will leave us no choice but (to) do a public boycott of your business. And sorry, neutral means ‘no’ to those who work for the largest employer in the area and are union members.”

So, let’s get this straight. If you are a business owner, and you are not interested in getting involved in the ongoing battle, you could still get boycotted for choosing not to get involved. In the current economic atmosphere, I have no doubt that some businesses will capitulate to ensure their doors remain open. But how is this behavior ok? How can unions complain about how they are being treated in the legislative process, then turn around and basically threaten business owners?

Seems like a possible return to old fashioned union bullying tactics.

Unions to Protest on Anniversary of MLK Slaying. That is NOT Kosher.

The right to assemble is one of the fundamental rights people have in America. As long as you follow the rules, anyone and everyone can get together all they want. So I have no problem with unions wanting to assemble mass protests.

But in an attempt to link civil rights and “workers’ rights,” they are calling for such gatherings to take place on April 4th. The significance of that date? It is the day that Dr. Martin Luther King, Jr. was assassinated in Memphis, TN in 1968. King was on his 4th (and unfortunately final) trip to Memphis to support an ongoing sanitation strike by black workers, who were being paid less and treated worse than their white counterparts. There had been rallies and marches, and King had been there to help bolster the worker’s effort to be treated equally. In that effort, he lost his life and black america lost its “Drum Major.”

Martin Luther King, Jr.

Image via Wikipedia

For some reason, unions feel that their efforts to maintain the level of power they have now equates to that effort in 1968, that civil rights–treat me the same as the white workers–and workers “rights” are linked. My question is, how so?

In 1968, segregation was still the norm in a lot of places. To be black meant to be treated differently. Forget the idea that other than skin color, a person was a person. Those workers were treated like 2nd class workers. The fight to get them their equal pay and treatment was unquestionably a fight for the inalienable right to be treated as equals.

It’s now 2011. Exactly how, in the ongoing labor disputes, are union workers NOT treated equally? Collective bargaining, while a legal right in some jurisdictions, is not an inalienable right, no matter how loudly people yell to the contrary. As I have mentioned previously, Democrats on the federal level who said such in support of the Wisconsin protesters were speaking doubletalk, since they have made no effort to say or do anything in support of collective bargaining for federal workers since they lost the right to do so under Jimmy Carter. Speaking of Wisconsin, the bill that was passed (and is currently on hold due to a judge’s ruling) still allows union workers to bargain for their pay. I and millions of others have the ability to do this one on one with any perspective employer. The public employees would no longer have the ability to negotiate on benefits and perks. For the most part, I and the millions are in the same boat. So really, what the bargaining on benefits and perks would be for is special treatment. Granted, many in Wisconsin opposed the bill passed by Gov. Walker and the Republicans there. But you’re not going to convince me that they have some inalienable right to 100% funded pension and free healthcare, at taxpayer expense, during a time of a major budget shortfall.

Now, I’m sure that these unions will most likely get the support of many black organizations in their April 4th protests. But from this black person, I look at connecting two completely different rights as an insult to MLK and what he fought for.

I’ll end it with a quote from Byron York, writing on the topic in the Washington Examiner:

Will it work? After all the demonstrations, and all the speeches, will the public watch protests by angry, nearly all-white, middle-class school teachers with excellent health and retirement plans and think of Martin Luther King? Trumka’s AFL-CIO and the big unions are very rich and very powerful. They have the ability to get their message out. But their April 4 strategy might be too ambitious even for them.

Want To Get Quick Sympathy Points? Compare Your Cause to Slavery!

Here we go again.

Two weeks ago, at the height of the union protests in Wisconsin, NY Representative Charlie Rangel decides that losing the ability to collectively bargain is “close to slavery:”

“Collective bargaining is something that is so close to slavery in terms of abolishing it, that it is not an American concept to tell people that they cannot discuss their economic position.”

Slavery. As in, that institution where you’re just a piece of property, where you got separated from your family at the whim of the slave owner, where you had no freedom (and to attempt to gain it could mean your life), and where the bullwhip was used with impunity?

Uh, ok, Charlie.

Fast forward 2 weeks. We now have a new union battle taking center stage, between players and owners in the NFL. I won’t go into the details of conflict, or of the pending lawsuit. But Adrian Peterson, star running back for the Minnesota Vikings and the-running-back-everyone-wants-on-their-fantasy-team, has now followed Mr. Rangel’s lead. In an interview with Yahoo! Sports’ “Shutdown Corner” blog, Peterson says this in reference to the current situation:

It’s modern-day slavery, you know?

Now, when I heard about this, of course I’m thinking that he is out of his mind. NOTHING compares to slavery! He has even received negative feedback from many directions, including fellow NFL players.   But then, I did something that most people don’t bother to do–I read the entire interview.

I’m still not fond of the analogy, because just as I felt about Rangel’s remark, no one is being forced to stay on the job, no one is losing their freedom, and certainly no one is getting whipped. But I do have some sympathy here different from my thoughts on the Wisconsin situation, the biggest being the conflict between the NFL and the owners is a debate over profit sharing in a private sector organization. Also, there is this interesting comparison (by way of Dave Zirin at The Nation) from former NFL player Anthony Prior, author of the book Slave Side of Sunday, where he draws an analogy of playing in the NFL vs being a slave:

“Black players have created a billion-dollar market but have no voice in the industry, no power. That sounds an awful lot like slavery to me. On plantations slaves were respected for their physical skills but were given no respect as thinking beings. On the football field, we are treated as what appears like gods, but in fact this is just the ‘show and tell’ of the management for their spectators. In reality, what is transpiring is that black athletes are being treated with disrespect and degradation. As soon as we take off that uniform, behind the dressing room doors, we are less than human. We are bought and sold. Traded and drafted, like our ancestors, and the public views this as a sport, ironically the same attitude as people had in the slavery era.”

Zirin also has an interesting comparison of what players go through at the combine vs how slaves were treated, traded, and evaluated.

Ultimately, while I don’t like at all using the slavery comparison to discuss modern day issues, I have to admit that maybe, on occasion, there is no better way to getting the point across. But I’m sure there will be debate, discussion, and outrage every time it happens.

Klavan on Unions

Different Perspectives on the Republicans’ “Win” in Wisconsin

After the move made by Republicans in Wisconsin to pass a bill taking away some collective bargaining abilities, the response are coming in.  On one side, its said that what was done was no different than what Dems have done to get legislation passed, and that to decry it would be hypocritical.  On the other side, the criticism is blistering, and the governor may find that support from his own party supporters may have slipped away.   Here are a couple of good pieces of analysis.

From the Washington Post, on the “Plum Line” blog, Greg Sargent speculates that the amount of maneuvering needed by Gov. Walker and Republicans to get the collective bargaining bill passed means the fight is only going to get worse:

There’s no quibbling with the fact that if it does stand, Walker and Republicans will have gotten their way in the short term fight. But let’s recall an important fact: Republicans control the governorship and state legislature. The fact that they were forced to resort to this trick is itself a concession that they had lost the battle as they themselves had previously defined it. And in so doing, they were forced to pull a maneuver that will only lend even more energy to the drive to recall them.

On the other hand, Mickey Kaus at The Daily Caller says the situation was definitely a win for Gov. Walker:

If Walker’s concessions had been accepted, he still basically would have won (largely because of the dues provision). But the Dems could have returned to Madison claiming that their dramatic walkout had resulted in a non-trivial victory of sorts, and the press was poised to portray them as brave, victorious heroes. This outcome denies the Democrats that media triumph.

So, it can be said that the Wisconsin Republicans either stood their ground, or they ignored the will of the people. It can also be said that Democrats did represent the will of the people, or they are being hypocritical (reconciliation is ok, but just when they do it). We shall see who wins the messaging war.

Wisconsin Dems Now Angry After Their Holdout Backfires

14 Democrat Senators in Wisconsin continued to stay holed up in Illinois in what had been a successful attempt to prevent the passing of a bill that would strip collective bargaining abilities from public workers (important sidenote:  they would retain the ability to bargain for pay, something that seems to get ignored).  In their view, leaving town was their way of fulfilling the will of the people–even though the obvious “will of the people” was that they wanted Republicans in charge, based on the last election results.  They were determined to prevent what they felt would be a removal of of rights from occurring.

All that changed in minutes.

Republicans realized that a quorum is only needed for spending bills.  So, they removed the collective bargaining piece from the spending bill and passed it as a separate bill which did not need a quorum.  Just like that, Dems’ out-of-state foray was rendered moot.  Of course they are crying foul. One senator, speaking on the Lawrence O’Donnell show on MSNBC, talked of how he was driving back doing 80 miles per hour in an attempt to stop what was happening. O’Donnell, sympathetic to the guest, failed to make an obvious point: if they had actually been in Wisconsin instead of hiding out, there would’ve been no need to have to “come back!”  Very simple idea, really.

Now, there you have it.  a group voted into the minority who leaves the state in order to avoid legislation they don’t like and putting the government process on hiatus now screams bloody murder because business continued on without them.  How does THAT make sense?

Links:
CNN: Union supporters to rally after Wisconsin Senate passes limits
Runaway Wis. Dem Drove Back As Fast As He Could To Stop GOP

Politico Cites Report That Union Heads Make 6 Figure salaries

A Politico article cites a recent report that shows that the people heading the country’s largest unions aren’t do so bad for themselves:

Leaders earned between $173,000 and $618,000 at major unions, the Center for Public Integrity found in examining 2009 tax records, with some groups paying dozens of employees in the six figures. At the three major unions , which together represent more than 5.6 million public workers, presidents’ salaries in 2009 ranged between $400,000 and $500,000.

For the most part, I and most other people don’t begrudge a person for how much money they make. But many of the same people who support unions also complain vocally about company execs and their salaries. It would seem to me if one can make that complaint, but look at this report and be ok with it, that there seems to be a level of hypocrisy.

Read more: Report: Union heads make six figures

Nobel Prize winner (and know-it-all) Paul Krugman Gets Crushed By a Blogger

Paul Krugman is an economist who spends his time explaining how everything Left is right everything Right is wrong.  He recently wrote a piece in which he used an argument many union supporters have been using lately–that school performance in non-union states is worse than in union states.  Unfortunately, he didn’t do the full research.  Blogger David Burge pulls out the facts and proceeds to completely crush Krugman’s argument:

Please pardon this brief departure from my normal folderol, but every so often a member of the chattering class issues a nugget of stupidity so egregious that no amount of mockery will suffice. Particularly when the issuer of said stupidity holds a Nobel Prize.

Case in point: Paul Krugman. The Times’ staff economics blowhard recently typed, re the state of education in Texas:

Continued here: Longhorns 17, Badgers 1

If Andy Stern’s ideas came true, I might become a union fan

In a Washington Post article/interview, columnist Ezra Klein interviews Andy Stern, former head of the Service Employees International Union (SEIU).  I’ve heard a number of things he has said in the past that did nothing to pull me over to the pro-union side.  However, in the interview, he mentions a number of things that would actually think twice about my stance if they were status quo in America.  the article can be read here but here are a few quotes that jumped out at me.
On a “collaborative process:”

We have this anti-employer, they’re going to kill us we need to kill them first, mentality. We’ve done a very bad job, for instance, making alliances with small businesses.

We need an ideology based around working with employers to build skills in our workers, to train them for success. That message and approach can attract different people than the “we need to stand up for the working class!” approach. That approach is about conflict, and a lot of people don’t want more conflict.

On working together with employers:

We’ve never, as a union movement, promoted partnerships with employers where we talk about how to share in success and in skills and training. You say those things in the labor movement and they go over well with workers and employers and badly with activists. To the activists, this is sell-out language.

On the Democrat Party and unions:

The forces that don’t like unions there have largely finished with us. And now they’re moving to the public sector. But part of this story is that the Democratic Party hasn’t embraced unions in the last 20 years. Republicans understood unions as an ally of the Democratic Party. But unions couldn’t get Democrats to embrace unions as a response. They made the argument that making more union members was how you make more Democrats, and that argument is true, but they couldn’t get the Democratic Party to really embrace that theory.

The rest of the interview and the questions asked can be read here: “Andy Stern: ‘It may not end beautifully in Wisconsin.'”

Thoughts about unions

  • I’ve admitted to not being a fan of unions.  The main reason for this is that I feel a job is an agreement between an employer and an employee.  The employer agrees to provide agreed-upon wages and perks in return for the employee doing a job.  Either side can terminate this agreement at any time.  Introducing a union into the mix adds an extra layer into the agreement, typically in favor of the employee.  Now, the employee can leave at any time, leaving the employer to have to fill the spot.  Meanwhile, the employer now has to go through red tape and hurdles to fire an employee.
  • Forced unionization is just flat out wrong.  In a forced unionization state, a non-unionized worker who goes to work at a unionized establishment MUST pay union dues whether they get involved with the union or not.  One of the reasons unions  are protesting in Indiana (and why their Democrats have fled) is because a new law up for vote by legislators would bar non-union employees from having to do this in a union shop.  This idea is being described as “an attack on workers.”  Isn’t forcing them to unionize an “attack on workers?”
  • I mentioned this in a discussion the other day.  Why is it no one on the supporting side of the unions can admit that maybe–just maybe–in some cases unions have too much power?  And that losing some things isn’t a total loss?
  • In any other situation, wouldn’t the idea that a group could take money, use that money to help elect people on the side of their cause, then go negotiate with these same people in order to get as much as possible for the group a conflict of interest?  Just wondering, since most complains are about conservatives attempting to “bust up” unions but one rarely hears complaints about Democrats giving more power to unions.

My last thought is a quote.  I found this comment online in response to a news article (“Right to Work Bill Puts Republicans, Democrats At Odds”) and it was one of the most sane, concise comments I’ve seen in the entire pro-union/anti-union debate:

All of these negatives that are presumed to happen to union workers if this bill passes are the issues the rest of us face already. All of us that do not have benefit of a union can be fired for no reason or replaced by someone just because they will do our job for less. That is Capitalism. When anyone suggests that there should be laws protecting all workers, as I do, they are called Communist. Anyone who has read Marx knows that laws to protect the rights of workers is a Marxist ideal. If it is fair and just for union workers to require certain benefits from employers then it should be so for all workers. I have seen both sides. I have been replaced by someone with less experience who would do my job for less money. Working for the state as a social worker, I have had my pay cut by 60% with no warning, then to have it ‘eliminated’ with no warning. I have been hired for a job and then had more and more of my supervisors responsibilities put on me. I have also been witness to my husband, who is owner of a national shipping company, struggling with incompetent workers whom he can not fire without a major ordeal and unreasonable demands from the union, even though he voluntarily pays two dollars more an hour than is consistent with the market. My mother was a union factory worker. She has attested to the fact that the union often protects people who take advantage of the power the union affords them. When workers cost a company money, it is the consumer, you and I, who absorb the cost. Someone always loses when the other side has too much power. There should be laws that protect all workers while still allowing businesses to function as they see fit.

Are you a protesting teacher in Wisconsin? Need a doctor’s note? No problem!!

One thing that came to mind about the protests in Wisconsin is that the individual school districts could (and should) come down hard on all the teachers that skipped work to protest, causing widespread school closings.  I figured there would be no way they could get away with it without a doctor’s excuse.

Well, I guess someone else thought of that, too:

The funny thing is, these folks know good and well what they are doing is fraud, but have their “defense” already prepared when asked, especially the doctor who decided to get all snarky with the camera person.  Its situations like those when one wishes the person behind the camera was a little more quick with the wit to bring the guy down a notch.

Plus, how many of us would be able to call a random doctor and get a doctor’s excuse on the fly?

More info here: Fake Doctors’ Notes Being Handed Out at Wisconsin Gov. Union Rally

Revisiting the notion that only the Right does hateful rhetoric

As the protesters in Wisconsin are happy to show (and as I have been saying for a while now), the left is perfectly capable of the hateful rhetoric that supposedly is exclusive to the right.  Yes, the video is from the Wisconsin GOP (for those who care), but the evidence is clear.

Just a thought: is it going to far to protest at someone’s house?

In one of the articles about the ongoing protests in Wisconsin, it was mentioned that protesters were not only at the capital building, but also at the governor’s house.  Seeing that reminded me of incidents reported after AIG gave their executives bonuses, and protesters loaded vans and set up shop outside the residences of AIG employees and executives in an effort to guilt them into returning the bonus money.

Other reports of people protesting at (and doing damage to) politician’s homes, as well as unions and other organizations handing out flyers with home addresses of protest targets are readily available on the web.  Which made me wonder:  is that taking things too far?

Lets acknowledge that there is a right to assemble.  There is also freedom of speech.  But is such style of protest really a peaceful move?  I would say no.   When you show up at someone’s residence, it is by default an attempt at intimidation.  “We know where you live!” is the message given by such actions.  I say its taking things too far.  Besides, how would these protesters respond if the person being targeted responded by hiring security to come in and create an opposing show of force?  What if counter-protesters showed up at the houses of the protesters?  I can hear the howls of…well, of protest.

More on the Wisconsin fiasco

The wackiness in Wisconsin over proposed changes to collective bargaining for government employees just keeps getting…wackier.  Is that a word?  Well, for today, it is.  Democrats in the Wisconsin Senate have been on the lam for 3 days, preventing any further work in the Senate.  Attempts to have then retrieved and compelled to attend by state law enforcement were stymied by a simple counter move:  all 14 of the Dems in question jumped on a bus and have taken “refuge” in Illinois.  By crossing state lines, Wisconsin troopers can’t come get them, and Illinois law enforcement isn’t going to get involved.  From the Dems:

“This is a watershed moment unlike any that we have experienced in our political lifetimes,” Miller said. “The people have shown that the government has gone too far. . . . We are prepared to do what is necessary to make sure that this bill gets the consideration it needs.”

Sen. Bob Jauch (D-Poplar) said the decision on when to return had not been made yet. Sen. Spencer Coggs (D-Milwaukee) said Democrats were prepared to stay away “as long as it takes.”

In a situation like this, one has to wonder which set of “people” should have the most say in this? The people that are part of the union, with something to lose? Or the people that elected the politicians (and in this case put Republicans in power in Wisconsin)?

Another great article on this comes from Patrick McIlheran in the Milwaukee Journal Sentinel called Unions want to overturn election result where he not only makes the point about the will of the electorate, but also makes a very important point in regards to public sector unions:

They insist this is the end of unionization in government, something to which they have as much right, they say, as anyone else.

But they miss a bedrock difference. Unions in the private sector are a way of organizing private interests, those of employees, against other private interests, those of a company’s owners, for economic gain and for protection against unfairness. In government, workers are already protected against unfairness by civil service laws, and Walker has supported expanding those. Economically, government unions pit a private interest, that of employees, against the public’s interest, that of taxpayers and voters.

Private sector unions are one thing. But personally, the idea of a group demanding more perks, paid for by taxpayer money, that are over and beyond what the normal taxpayer gets, gives me pause. Isn’t it enough that public sector unions use what is essentially taxpayer money to support candidates of their choosing, donating millions to politicians that will further their interests?

Wait. That’s another story for another day.

In Wisconsin, the line between Unions/Dems and Repubs is drawn in the sand

In the state of Wisconsin, the state government has a $3.6 billion shortfall.  Similar to other state legislatures across the country, they are coming up with a number of measures to attempt to close the budget hole.  One of the ways new Republican governor Scott Walker has proposed has created an outcry from teachers and unions:

In addition to eliminating collective bargaining rights, the legislation also would make public workers pay half the costs of their pensions and at least 12.6 percent of their health care coverage — increases Walker calls “modest” compared with those in the private sector.

According to Walker, the proposal will save $300 million over the next two years. But Dems are not at all happy with what they see as being deprived of a right. Teachers have staged massive “sick outs” so that they can protest. Democrats in the Wisconsin legislature have left and gone into hiding to prevent any vote from occurring. Protesters at the capital have been heard chanting “Freedom! Democracy! Unions!”

Wait. Did they actually include the word “unions” with freedom and democracy? Wow.  I thought democracy is people getting out to vote, voting in politicians whose job it is to steward taxpayer money, and make cuts when necessary when there is a deficit, even if the other side doesn’t like it.  Which would mean the unions are actually trying to stifle a democratic process by protesting and causing school closings.  But I digress.

Having spent my entire young working life in a right-to-work, merit pay environment, I have yet to develop much sympathy or support for unions. I admire the important things they helped with over the years (40 hour work week, child labor laws, ect). But am I supposed to be upset because they wouldn’t be able to force people to pay union dues? That they wouldn’t be able to to negotiate for things other than pay? Or that they would have to pay more money for pension and benefits just like most of us in the private sector?
Sorry, but I say no. Especially when taxpayer’s money is involved.

Links to the story can be found here and here.

DNC picks Charlotte for 1012 convention, and supporters are not happy

Recently, the Democratic National Committee announced that their 2012 convention–where we presume that President Obama will be nominated as the Dem presidential candidate unopposed–will be held in Florida.  This decision has many on the left quite upset.  Why?  Well, its no secret that unions have a lot of sway and influence with the party, but it turns out, North Carolina is the least union state in the country:

North Carolina has another distinction: it’s the least union state in the country, with just 3.2% of its workers belonging to a union (coming behind even Arkansas, Georgia, and Mississippi). And the DNC’s host city of Charlotte has exactly 0 (zero) union hotels in which the 15,000+ visitors will stay for the convention. Finally, the host venue in Charlotte, the Time Warner Cable Arena, does not appear to have any union workers. (I called the arena; the operator laughed at the notion that employees would be union members, and a press contact hasn’t replied yet.)

I’m actually impressed. Both sides of the aisle have their “special interest groups” that they kneel to, and Dems definitely bow at the altar of the unions. So to see this happen is a surprise. However, I predict that between now and convention time, Dems and the unions will find a way to inject themselves into the situation one way or another.

Article here:DNC’s Union-Free 2012 Convention

Guest Writer: OCD3 on the GM bailout and IPO

My Thoughts on the GM bailout and recent IPO

While, I’m very happy that the American automotive icon GM is still in business, I initially had mixed feelings regarding the bailout and spending taxpayer dollars to shore up what appeared to be a dying company.

But first understand that I’m a fan. I’ve driven and owned only American cars my entire life. From my first car, a ‘83 Pontiac Firebird (black of course), to my mom’s ‘85 Chrysler Reliant which I drive for a short time in college I’ve been a fan. From the used ’87 Chevy Celebrity that I bought for $700 upon graduation to the ’98 Pontiac Grand Prix which I still drive today…I’ve been a fan. What many people don’t always understand is that GM DOES build high quality products…and they have done so for a long time now. The issues of the 80s are long gone. The focus on quality has been evident since the 90s but a bad reputation is difficult to shake.

I’m not happy for GM for nostalgia’s sake. I’m not even happy for GM because I drive one of their cars. The Pontiac brand which I’ve come to love has been retired…for the time being anyway. I’m happy for the people who build cars and feed their families because of it. I’m happy for the automotive suppliers and parts suppliers and the suppliers to those suppliers. This was not just about GM. It was about an industry that supports a significant part of our economy and the people who rely on that industry to survive. You see, I was once one of them.

I used to work for GM. I started as a young engineer fresh out of college. I felt lucky because GM was one of those big companies that so many engineers wanted to be part of. I enjoyed my time there. But I also saw things that made me feel concerned. I saw some employees who took their jobs for granted. I would tell them that some of their actions were leading to jobs being sent to Mexico. Some responses were to the effect of: I don’t care, my job is union guaranteed. I saw some who took advantage of union agreements in ways that scream lunacy.

For example: a material mover fell asleep in a closet. A foreman grabbed a box of parts to keep the line from shutting down while the mover was missing. When the mover later learned that a non-union worker did union work, he filed a grievance and was awarded time-and-a-half for the day.

The problems were not just employee based or union-based. I strongly support the unions. I’m just against the abuse of them. I saw management making decisions and putting policies in place that had no practicality. I saw a lack of innovation in product design to capture a new market. I saw a failure to understand the buying habits of a new generation. Gone were the days of brand loyalty where one would buy a Pontiac Sunfire as a teenager, a Pontiac Grand Am as a young adult, a Pontiac Firebird as a young professional, a Pontiac Grand Prix as a middle class family man, and a Pontiac Bonneville as a middle-aged man set in his ways who just “loves his Pontiacs”.

There were things happening that I didn’t see as well…such as the aging work force, the rising cost of healthcare for employees and retirees, and no plan to deal with it all.

I say all of this because I believe I have a personal view of the company as a former employee and a long-time customer. When the bailouts were announced, I thought it was a big mistake. I don’t believe in throwing good money after bad. I left the company because I saw a plan to move most of the operations in my area to Mexico as soon as natural matriculation allowed. There wasn’t much of a future for me there. I felt that the failure of GM to get its house in order is not the taxpayer’s problem. Furthermore I felt that the effort was futile. I did not believe GM could be saved. I felt they needed an overhaul of management, both at the company and the unions. I felt employees needed a change of attitude. Their union contracts may be guaranteed but their jobs are not. They forgot about the free market’s right to decide that they don’t have a job regardless of their contracts.

Then the bailouts passed and I was…not angry. I was relieved. They have a chance. The industry has a chance. An American icon has a chance. The justification was not just saving the company, but the cumulative effect it would have on the industry and our economy.

This week GM issued stock in a new IPO that was one of the biggest ever. Bush 43 started the automotive bailout and Obama continued it. From all accounts it worked and they both deserve the credit. Taxpayers will get their money back and then some. Jobs were saved. The economy did not slip into depression. Some say they could have gone into bankruptcy and might have come back a stronger, leaner company. They could have also gone into bankruptcy and disappeared forever.

Our government interfered with free market forces. I hope it never does so again. This along with TARP, healthcare reform, and other policies caused the Democrats the majority in the House. Politicians choice to ignore the will of the people and they were punished for it. But in this case, their actions have proven to be a success. I grade on performance and outcome, not on whether or not my ideology won or loss. Their actions save an important piece of Americana and likely kept us from entering a depression. To criticize it by saying that it might have been fixed another way is foolish. If you could go back in time and risk the economic health of the country by changing the decision while knowing that the decision as is did indeed work, would you?

To our government let me say: well done! This was $50B well spent. Please don’t do it again.

OCD3

*Note:  OCD3 will be making frequent appearances here at F&C so show him some love!  –Hal

The left says the GM bailout is a success. The right disagrees. Who is correct?

Logo of General Motors Corporation. Source: 20...

Image via Wikipedia

This week, GM launched an IPO, moving forward in a turnaround that many thought unlikely a few years ago.  Just a couple of years ago, GM was losing a ton of money, closing dealerships, and about to go into serious bankruptcy.  Bush 43 began the bailout process with over $17 billion in loans.  Obama and Co continued the bailout, but with a caveat that many still consider controversial to say the least:  the United Auto Workers came out with a larger stake in GM than the shareholders and bondholders, even though the amount GM owed the union was less than that owed to the shareholders.  Many feel that letting GM go into bankruptcy and emerge leaner and profitable would’ve been better and allowed the pain to be shared more equally.  Many also felt that allowing the unions to end up with a larger share that seemed out of proportion was an obvious example of the Dems giving special treatment to their union supporters.

Sidenote:  many of the left leaning sources that are celebrating the IPO are saying the company would’ve died without the bailout.  This isn’t necessarily true.  A large number of companies that go into bankruptcy eventually come out.

So my good friend Ocie asked me this morning:  “GM IPO, we’re making American cars, people are employed, was the $50B bailout of GM worth it?”  My immediate answer to him was that it would be worth it once the US breaks even on its investment at least (the US Treasury owns a 33-35% stake in GM, that it took instead of money payback).  Having thought more about it, I would say that it has its positives and negatives.  I agree jobs were saved, but there is no guarantee jobs would not have been saved via bankruptcy.  I will say that bankruptcy may have had more of a negative impact “down the line,” as in the vendors that do business with GM.  But it can’t be denied that politics played a part in the end result–the union ended up with a larger stake than stock and bond holders.  And it will be years before the US is fully divested and paid back on their “investment.”

So let’s declare that it was worth it, but should’ve been done differently.

TSA workers will be allowed to unionize

Full disclosure:  I’m not a fan of unions.  I’ve spent my working life at companies where you were hired based on your ability to fill a position, retained based on you continuing to do the job, and pay increases were based on merit.  Beyond the many things unions helped with in the past (workplace safety, 40 hour workweek), I don’t see a need for them now.

Last week, the Federal Labor Relations Authority decided that TSA workers could vote to unionize.  While workers could already individually join a union, they will now be able to vote as a block, and be able to collectively bargain.

Why do I not support this?  Well, in addition to all the other reasons I’m not a union fan,  what happens when the union doesn’t get everything they want in a contract and they decide to strike?  What happens to air travel?  Yep–gridlock, coming to an airport near you.