Thursday, September 8, 2011

Party of the Not Working Man

In my opinion, the Democrat Party should be redefined as the party of the Not Working Man since nearly everything it does or supports is destined to increase their number.

The Democrats seem to have forgotten the basic concept that in order to have employment you have to have employers!  And successful employers make money!  Employers that don't are not employers for very long!  If Democrats were truly the party of the WORKING Man, they would want to increase the number of successful businesses so that the demand for employees (i.e., the Working Man) would increase as well.  If that were the case, the law of supply and demand would take over and, breathe deeply Democrats, wages of the Working Man would actually rise!  [The ironic thing is that by increasing the number of businesses competing for the Working Man, the proportional profits of employers would also decline.  The great income inequality that Democrats bemoan so much can be laid at the steps of their own policies!]  

If you wanted to reduce the number of Working Men, you would do things like raise taxes, make businesses pay for increased benefits, pile on regulations.  All of those things make it less profitable for a businessperson who might actually have wanted to hire them, reducing demand for employees and driving down wages.  Oh yeah, isn't that the Democrat Party's economic platform??!!

Who are the Democrats biggest supporters, without whom no Democrat would ever be elected?  Unions, the most anti-employer, anti-Working Man group ever conceived.  "Wait", you say, "you are crazy, Unions are the defender of the Working Man."  Nothing could be further from the truth.  Unions are the defenders of no one but their own self-interest.  By demanding usurious wages and benefits, Unions single-handedly drove nearly all of American manufacturing off-shore, destroying millions of jobs that used to be filled by the Working Man.  Now they are bankrupting our cities and states.

The few unionized manufacturers who remain are mere shadows of their former greatness, a greatness that for the likes of General Motors and United States Steel was forged in the shadow of World War II when demand for their products exploded and supply was constrained due to the fact that their competition in Germany and Japan had been destroyed in the War.  When those countries rebuilt and their heavy industrial capacity was brought back on line, they thrashed America's unionized manufacturers for one simple reason--their companies were not saddled with the same onerous labor costs as in the United States so they could actually invest in technology and innovation.

The math is very simple:  union wages at double the norm could employ twice as many if halved.  Twice as many employees would mean more production which would mean more competition which would lower prices for consumers.  Lower prices for consumers would mean more consumption.  More competition also means more innovation to manage scarce resources (n.b., in my opinion John D. Rockefeller probably did more for the environment than any environmental group ever has or will.  By innovating, Mr. Rockefeller's company eliminated nearly all waste from the oil refining process, waste which had previously been dumped in Lake Erie and is now sold as by-products.  He didn't do this because he was a nice guy.  He wasn't.  He did it because it made him money.  He also employed a LOT of Working Men.).

Now reverse the process and you'll understand the true impact of unions:  higher wages for the fewer employed, less production, less competition, higher prices, less consumption and less innovation.  And this is the group that the Democrats have allied themselves most closely with!      

So while the Democrats advertise themselves as the party of the Working Man, nothing could be further from the truth.  Party of the Not Working Man is how I see it.

20 comments:

  1. Well if he Democrats are the party of the nonworking man, the Republicans are certainly the architect and supressor of the nonworking man.

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  2. "...in order to have employment you have to have employers!"

    Wrong. Dead wrong.

    In order to have employment, you have to have customers.

    Like it or not, the US economy is demand-driven despite what the disciples of Reaganomics believe.

    Moreover, fully 1/3 of the demand in our economy comes from government spending (at all levels). Right now, families don't have money to spend, yet the Republicans want to cut government demand too.

    The only way to get the economy going again is short-term deficit spending by the government. And with our infrastructure crumbling and our classrooms overcrowded, it would be a perfect time to kill two birds with one stone.

    Unfortunately, Boehner, Cantor, McConnell et al. are not interested in fixing the economy. They have made it clear that everything they do is aimed at unseating Obama.

    Shameful.

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  3. What??? You must not have understood the point--if you enable more businesses to be created you have fewer Not Working Men because they are WORKING! The Democrats' policies, which have been sold as more compassionate than the "mean" Republicans, have the opposite effect--if anyone is the "architect" of the Not Working Man it is the Democrats! That, in fact, was the point of the post.

    As to "suppressor"--why??? Because in a market-based economy employees get paid freely negotiated wages? Better to have unions violently exerting their might to extort above market rates, rates that end up killing the employer that they cannot exist without? Oh sure, employers have more leverage when there aren't enough jobs available. Democrat policy only makes that leverage stronger.

    Democrats have sold the Working Man on the concept that it is "us versus them", labor versus capital, when in reality both need each other to exist. Lulling people into a false sense of security, that the government (which in aggregate is just a group of self-interested individuals), will take care of them after it has "protected" them from "unfair" employers, to me is the true suppression.

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  4. The Keynesian view expressed by Shameful is, unfortunately shared by many people. It's the demand pull theory that has gained traction despite little actual confirmation.

    Every dollar the government spends has to be taken from somewhere, either from taxpayers or creditors. It doesn't grow on trees. The vaunted Keynesian multiplier has never been confirmed because it doesn't make logical sense. Combine that with the fact that union labor, which far exceeds market rate, is required to be used in every government infrastructure project leads to the inevitable conclusion that the number of jobs lost will exceed the number of jobs gained. Then keep in mind that the number of government employees that produce NOTHING will have to increase to monitor the incremental government spending and you see why this type of spending is also inflationary.

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  5. In response to:

    "Anonymous said...

    "...in order to have employment you have to have employers!"

    Wrong. Dead wrong.

    In order to have employment, you have to have customers."

    "Customers" typically earn their discretionary income from their EMPLOYERS. If there are fewer EMPLOYERS then it stands to reason that there are fewer EMPLOYEES and thus fewer CUSTOMERS.

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  6. Your argument sounds really convincing to yourself. The reason for that is that you have omitted all facts that would put a crack in your deductive edifice. Don't take my criticism personally, everybody does this to some extent. It's a scientific fact and has been shown in study after study. People are really really good at using reason to make convincing arguments, they just aren't good at using reason to find the truth. There are so many little tremors of fact that could send house-of-cards argument tumbling down. They are called superceding arguments. The number one weakness I see in your argument is your too-simple math. If a business can hire workers for half the wage, they'll hire twice as many workers, creating more demand for workers, raising their average wage, right? Some kind of upward cycle, right? Unfortunately, you're leaving out the superceding fact that Americans have become so focused on personal wealth that those in a position to enrich themselves simply can't help themselves. Their money addicts. So if the wages were cut in half they would pocket the other half and let everyone else work twice as hard, either here, or in China if nobody in America wants to work 12 hour shifts. Also, your argument that more competition will lower prices for the consumer is falsified by the simple observation that no one in this country has ever paid less for something today than they paid last month in a long, long time. The prices NEVER go down, the PROFIT just goes up. Any improvements in manufacturing, materials, or any other thing that makes the production of goods and services more efficient, SHOULD lower prices for the consumer, but the aforementioned money addiction means that the savings aren't ever passed on to the consumer, they are absorbed into the executive compensation packages. Yes, I know, competition should allow a company to provide the same good or service at a lower price. But the economy has changed so much that people haven't caught on that competition doesn't work like it used to. Everything from modern patent law to corporate strategy to profit-at-all-cost investment plans has made it impossible for natural selection to weed out companies that overprice their products. The money addiction is part of the problem, because the companies that gouge consumers the most make the most profit, and everybody wants to invest in that company. As I said, your argument sounds convincing to you, but neither you, nor I, know all of the superceding facts to really assess what the right solution to our problems are. That's why reason is not the way out of this mess we're in, compassion, kindness, faith, ethics, honesty and trust are going to be the tools that carry us forward. And, as a biologist, I have to believe that ultimately that is a big reason why we have the capacity for such things, because sometimes our rational brains, with all the facts in the known world to use for conjuring arguments, just aren't enough.

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  7. The author of the preceding rant missed the forest for the trees. By limiting competition, all of government's actions do end up with all of the things he assails. The superceding fact that he/she is ignoring is that without all of the government's do-good programs the competitive landscape would be far different.

    To review, less competition leads to: prices and profits up, wages and employment down. And EVERYTHING the government does that increases the costs of operating a business--anything that reduces COMPETITION--only makes things worse! Just take it in reverse to make the point--if there was only one provider of every good would it be more or less like that is was plentiful and inexpensive? Oh yeah, they tried that in the Soviet Union.

    As an aside, I agree with you that compassion, kindness, faith, ethics, honesty and trust are traits that separate us from beasts. What I don't agree with is the government applying them for us. Because when it does, whose definition gets applied? See previous post, The Church of the United States.

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  8. Union membership is about 12% of workforce down from its height of 33% ish in the 50's. So of the 10% plus unemployment is a result of union's getting in the way ??? Data does not support it at least factually. But your point is right its all about supply and demand, and don't think govt. projects is only artificially, unnecessary incentives are just as artificial and also have a cost attached to it. Optimal output has it's limit. The poster's rant also has a point, you and I and all of us are guilty of making arguments that sound good in our minds. But I don't think you or many people will disagree with this point that is needed to change this situation around, and its is very bitter but true and that is TIME.

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  9. Union's are clearly not solely responsible for the current unemployment rate. But they don't help. [And they do vote Democrat in overwhelming numbers, enough to sway most elections.] Neither did passing Obamacare just as the economy seemed to be emerging from the recession. [All of the economic numbers, which had been improving steadily up until that time, came to an immediate stop at that time.] Nor does extending unemployment for virtually forever. All of these increase the number of Not Working Men, and that was the point of the post.

    Your point regarding the decline of union membership is well-taken, and helps make the case that unions have destroyed American industry. Since I have never actually heard of a union decertifying (besides the NFL!) it seems to me that that decline correlates well with the decline of American manufacturing. I, for one, grew up in New Bedford, Massachusetts, a small city that is strewn with empty mills formerly operated by companies that closed decades ago when the unions became too powerful. In New Bedford, even now, a 10% unemployment rate would be a boom time.

    Finally, your point about time is very well taken. In my estimation it took 80 years, from when the Roosevelt Court began dismantling the Constitution until now, for the country to reach this point. Unfortunately, we don't have nearly that much time to put ourselves back on track. But we need to start soon, since we are fast approaching the point where more people live OFF the government than PAY for it. When that point is reached--and I hope it hasn't been yet--I don't think there will be any turning back.

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  10. You are incorrect about Germany and Japan.Unions in these countries ensure that workers are treated correctly. The trend to outsource and move factories abroad is simply to maximize profits by lowering production cost via toothless unions and lower wages.That's capitalism. I'd suggest that you come and spend a few years in Germany as a working person and discover for yourself that things are still manufactured there.

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  11. Unions in Germany and Japan are far less adversarial than in the United States. Somehow these countries have learned that without labor capital does not thrive and vice-versa. In fact, German and Japanese car companies have managed to transport that understanding to the United States where they now successfully make many of their cars and trucks--in non-unionized plants.

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  12. The main groups of people who live off the working men (and partially off the government) are children, people who are too old or decrepit to work, and people who cant find jobs. With children, the situation is unavoidable, but for the other two groups there is no economic reason to keep them alive.

    Some of them could pay to keep themselves alive, and they should do so until they run out of money. As for the rest, if they are left to sink or swim some will sink and some will find ways to keep themselves afloat.

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  13. I wonder what happened to people before the government was around to take care of them--oh yeah, family, churches and friends filled that role. What a novel concept.

    Somehow the idea that some nameless-faceless government bureaucrat is better able to care for us than we are for each other has become more acceptable than the old ways. How did we become so lazy and disconnected.

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  14. Actually, there is something wrong with large banking organisations who make terrible business decisions and then dip their hands into everyone else's pockets to cover their losses because of their government connections. They manipulate the decisions of governments via funding the candidates election campaigns on both sides of the aisle. It was lack of regulation of the banks that caused this crisis in the first place, not too much of it.
    The fact that you don't see job creation is as a result of globalisation, which made capital mobile and labor relatively immobile. Prior to globalisation, capital i.e. factories were immobile and the labour could travel to work elsewhere if the wages or conditions were unfavourable. Globalisation became popular because it gave the whip hand to the globalised businesses who could dictate terms to the labor force, and if the labor force did not agree they could move the factory to a country where people are paid a few dollars a week, have no education, and get their skulls caved in by the government if they attempt to struggle against their conditions.
    It really doesn't matter how many regulations your president tears up, because the only way you will compete with these countries is if you agree to live in a shanty town, send your 8 year old kids out to work, and resign yourself to dying as soon as you get any kind of serious but treatable illness. That is why the policies you are advocating are well known and are called "Race To The Bottom" policies.
    Are you really prepared for that? Many Americans have a ridiculous standard of living compared to the rest of the world. I read recently that if an American has 3 children it is the equivalent (in terms of use of world resources over their lifetime) of a person in a 3rd world country having 25 children! Have you ever been to China or India? For the few million that have been brought out of poverty, hundreds of millions have been placed into an even worse situation than they were in before. People like you have absolutely no idea what you are asking your government to do - basically turn you into a 3rd world country to compete with other 3rd world countries. Apart from the rich guys at the top, of course.
    An alternative would be to run a less naive economic policy where you impose control on your borders to business - like your competitors do. The World Banks most authoritative study on this showed that allowing total freedom in terms of trade barriers will only produce a 0.1% increase in GDP for the US by 2015. In other words, you could stop companies outsourcing jobs, and you would probably make far more back on the GDP by doing so. But why don't you do it? Because the banks and corporations want it the other way round, because they don't want labor to have any bargaining power, and want to make huge profits - and they have the lobbying power to get their own way every time.
    Greece got into trouble because Goldmans and other banks advised them on how to keep loans off their balance sheets, effectively hiding how indebted they were from everyone else. Then they, and the other crooks threatened to blow up the Euro if they didn;t get their money back - on loans they KNEW were risky. Sound familiar? It should do. It is what caused the credit crunch in 1988, and unless we start holding these organisations to account and enforce the rule of law, then we will never get out of this mess. You should be looking to Wall Street banks and corporations if you want to know who the real enemy is. It certainly isn't a bunch of impotent Unions.

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  15. There are too many misguided notions in your comment for me to address them all. I will say, though, that I agree 100% with your view on the bank bailouts--that was pure and simple corruption. And so was the government permitting them to use insured funds to inflate the housing bubble.

    Instead of asking for more government, as you seem to be doing, first ask yourself in what areas of our life is the government already most involved and then ask whether you're satisfied with the job it's doing. Health, housing and education come to mind. Not a pretty picture.

    Read the rest of the blog--a number of your points are addressed.

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  16. I’m from Sweden. Our government currently consists of the right wing parties of our political landscape, which have formed an “alliance” to rule our country. These parties are more “social democratic” than the American Democrats. It is indeed very interesting to see someone describe the American Democratic Party as almost communistic. You say that the reason the American mega-companies such as GM were “thrashed” by German competitors after they managed to get their industry up and running again, was because they were heavily unionized. What is your basis for this? Have you any idea of what you’re talking about? What parties have ruled Germany since the end of the world war and what are the state of their unions?

    Germany and Sweden are the two countries that have managed to flourish through the financial crisis that was instigated by American Banks that were allowed to run wild by a republican government. These two countries are, like I said before, ruled by governments that are more socialistic than the American Democrats. The key to a healthy country is to not let it be ruled my extremists of any side. The key is BALANCE, flexibility and responsible leaders! Too much to the right and there will be huge division of wealth, exploitation of the poor and desperation leading to criminality . Too much to the left and you’ll get what you see in Greece.

    However, the single most troubling aspect of your post blog post is your failure to realize the inevitable doom of the current global economic system. It is based on continuous growth, which is an impossibility on a planet with finite resources. No matter how you look at it, the republican philosophy will be just increase the speed towards the precipice that we’re all heading at.

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  17. Robin, Malthus was wrong and so are you. Innovation offsets the demands of growth (more food is grown on American farms than at any time in history). What we need to worry about, though, is the combination of Big Government and Big Business killing the entrepreneurial, innovative spirit. Then resources will clearly run out.

    I too believe that we are on a precipice (see previous post "On the Verge of Anarchy"), but to me we've reached that point because too many people have discovered that they can take what they need from other people without contributing anything in the process.

    [BTW, do you think that comparing Sweden, a country of less than 10 million, nearly 100% white citizens to the United States is really relevant? And, you know what, if the United States auto industry wasn't unionized it would eat up Volvo and Saab (is Saab still alive?) and spit them out. Our unions keep Sweden's car and truck makers alive--no wonder you support them.]

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  18. Innovation comes from big Government, not private investment. There are hardly any big technological advances that come from private industry. From containerisation to computers and the internet, radar, jet planes, non-stick frying pans just to name a few - all were developed by the government at public expense, then handed over to private companies who had rich owners with government connections.
    Honestly, have a look around and see what is being done to your country by all these amazing "innovators". It is theft, pure and simple.

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  19. Is this a joke? is that you Al Gore?

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  20. I think A reasonable Man is absolutely right! Let's get rid of the unions and all ridiculous health and safety and other forms of Red Tape. No more treatment without money up front, I'm sick of all these poor people getting health care. I WANT them to die. I hate them, they are always moaning and cluttering up the roads with their cheap cars when I am driving around in my Rolls Royce. Also, I think we shouldn't have to pay health insurance. As an employer it is a complete waste of time. There are tons of poor people out there, so when one of these chump workers drops, I could cheaply replace them with someone else who isn't selfish enough to collapse or fall ill without warning. Also, I hate this idea of democracy. It is a joke. Only rich people should be allowed to vote. Buying governments is getting far too expensive x

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