Monday, January 24, 2011

Are You Stupid?



I just finished reading a post from Ezra Klein -- including the comments section -- and I have to ask myself; Are people just stupid? Follow along.

What does it mean to be pro-labor when labor is in decline?

”Here's the puzzle: As you can see in the graph above, America has done a better job keeping GDP up than almost any other developed nation affected by the Great Recession. But it's done a far worse job keeping unemployment down. Why?”

Good point. And Mr. Klein does a decent job of searching for an answer. But let me ask a different question. Which is more important -- higher GDP or lower unemployment? I know what people who think they are sophisticated will say. They’ll expound on how important GDP is in providing decent jobs, national security and blah, blah, blah. Ask somebody that is unemployed how much they care about GDP and see what you get for an answer. And if you’re going down this mental path you are missing the real point.

The higher GDP hasn’t provided any jobs. Isn’t that the whole point of all this free-market complexity? Isn’t the point of our system of government and our capitalist economy to provide humans a better life? Isn’t that what the “Free Market” cheerleaders are selling you? That your life will be substantially better under this system?

Mr. Klein touches on the subtle message hidden inside all the propaganda you listen to in your daily lives.

”As labor loses ground, it becomes more reviled. People stop thinking about what a union could do for them and begin resenting what it's doing for others. You're seeing some of this with the anger at public-employee unions right now. How much of that anger is authentic and how much of it is because there are a lot of politicians and organizations that spend a lot of money and capital attacking labor is a difficult question, but it's not clear that the answer even matters.”

It’s not clear the answer matters? Excuse me? That’s only true if you keep asking the wrong question. You see “the wrong question” being answered over and over in Mr. Klein’s comments section. Unions protect the inefficient. Really? Stop asking yourself what is wrong with unions and ask yourself what is wrong with the corporations. That’s the right question.

Well? Anything? That’s right, the corporations are doing just fine. They’ve been getting rid of their unions. They’ve been outsourcing jobs -- your job -- to other countries that have even less regulation than we do. They’ve been really efficient at it too. They’ve also been very efficient at consolidating their power in your government. Who profits?

Joe Blow doesn’t. He lost his job. That means he doesn’t have any money to invest in the corporations so that he may enjoy all the “wealth” they are creating. He had already lost his pension when he was switched to a 401k. The 401k went south with the Great Recession. Then, whatever value he had in his house disappeared -- if not the house itself.

There are currently 14.5 million Americans unemployed. Something isn’t working for these people. Unions did not cause the Great Recession. Unions did not default on their pensions. Unions did not steal the value from their 401ks. Unions did not steal the value of these people’s homes. Unions are not foreclosing on their houses. Corporations did -- and are.

Unions -- the non-human entities -- have been declining for decades. Corporations -- the non-human entities -- have been thriving.

Union members -- the humans that are American citizens -- have been suffering declining wages, if not outright unemployment. Corporate executives -- the humans that are also American citizens -- have been thriving. Look at this article from back in 2007.

”Moreover, in the competitive global economy, it is the American executive remuneration that looks out of kilter. A study by the consulting firm Towers Perrin of top executive pay in 26 countries found that U.S. executives make an average of twice as much as their British, French and German counterparts and four times as much as the Japanese and Koreans.”

”The gap between the wealthy and the less affluent has gradually widened for decades, accelerating during the Bush presidency. Meanwhile, U.S. chief executive officers and chief financial officers now make 400-fold more than average workers; that gap is 20 times bigger than it was in 1965.”

This is nothing new. Bear in mind, that article was written before the Great Recession. You’ve got to ask yourself how the public narrative has changed from outrageous executive compensation to inflated union wages and benefits -- in the middle of a huge recession. Does that even make sense? We are laying off teachers left and right yet, somehow, our current fiscal problems are the teacher’s unions fault? It isn’t even logical. Are you stupid?

Yeah, I know the dream of Americans. Most of these people bashing unions believe that one day they’ll be a CEO. “I’ll be rich!” That’s about as unrealistic as the street kid playing ball dreaming he’ll be playing in the pros. Most of us are going to work for somebody else. A lot of us are going to work multi-national corporations.

The union model isn’t “broken” anymore that the corporation model is broken. They are simply out of balance. You really would have to be stupid to argue that corporations haven’t been good for America. Collectively, Americans are incredibly rich. Much of that is due to corporations. Although many struggle to acknowledge the fact, you would have to be just as stupid to argue unions haven’t been good for America. Unless you think child labor, 16-hour days, 6-day work weeks and no benefits are good for America.

The only entity that can correct this imbalance of power is government. If corporations gain control of the government, then there will be no balance. You can vote to restore a balance of power. Or not. And your wages will continue to decline. You’ll work more overtime -- except it won’t be “over”. It will just be time. In short, CEOs will keep making more and you’ll keep making less. Are you stupid? Or do you just think you’ll be one of those CEOs? You might want to think again.

Don Brown
January 24, 2011

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