Saturday, March 7, 2009

The Need for Labor Policy Change - The Emmployee Free Choice Act

Statement from Economic Policy Institute. This statement below clearly articulates my positions on some of the structural changes needed to sustain growth in the long run.

Statement from leading American economists:

Although its collapse has dominated recent media coverage, the financial sector is not the only segment of the U.S.
economy running into serious trouble. The institutions that govern the labor market have also failed, producing the unusual and
unhealthy situation in which hourly compensation for American workers has stagnated even as their productivity soared.

Indeed, from 2000 to 2007, the income of the median working-age household fell by $2,000 – an unprecedented decline.
In that time, virtually all of the nation’s economic growth went to a small number of wealthy Americans. An important reason for the
shift from broadly-shared prosperity to growing inequality is the erosion of workers’ ability to form unions and bargain collectively.

A natural response of workers unable to improve their economic situation is to form unions to negotiate a fair share of the
economy, and that desire is borne out by recent surveys. Millions of American workers – more than half of non-managers – have
said they want a union at their work place. Yet only 7.5% of private sector workers are now represented by a union. And in all of
2007, fewer than 60,000 workers won union status through government-sanctioned elections. What explains this disconnect?

The problem is that the election process overseen by the National Labor Relations Board has become drawn out and
acrimonious, with management campaigning fiercely to deter unionization, sometimes to the extent of violating labor laws. Union
sympathizers are routinely threatened or even fired, and they have little effective recourse under the law. Even when workers
overcome this pressure and vote for a union, they are unable to obtain contracts one-third of the time due to management resistance.

To remedy this situation, the Congress is considering the Employee Free Choice Act. This act would accomplish three
things: It would give workers the choice of using majority sign-up-- a simple, established procedure in which workers sign cards to
indicate their support for a union – or staging an NLRB election; it triples damages for employers who fire union supporters or break
other labor laws; and it creates a process to ensure that newly unionized employees have a fair shot at obtaining a first contract by
calling for arbitration after 120 days of unsuccessful bargaining.

The Employee Free Choice Act will better reflect worker desires than the current “war over representation.” The Act will
also lower the level of acrimony and distrust that often accompanies union elections in our current system.
A rising tide lifts all boats only when labor and management bargain on relatively equal terms. In recent decades,
most bargaining power has resided with management. The current recession will further weaken the ability of workers to bargain
individually. More than ever, workers will need to act together.

The Employee Free Choice Act is not a panacea, but it would restore some balance to our labor markets. As economists,
we believe this is a critically important step in rebuilding our economy and strengthening our democracy by enhancing the voice of working people in the workplace.

Passage of the Employee Free Choice Act is critical to
rebuilding our economy and strengthening our democracy.

Monday, March 2, 2009

The Balance Sheet recession and the Revenge of the Glut

Revenge of the Glut - Paul Krugman

The best explanation of the financial crisis I have heard and it's solution came from an NPR expert from Japan. He explained how property owners are experiencing balance sheet problems.

The result is very obvious. Our balance sheets are wacked so we must recover by saving. This savings a has lead to a ridiculous problem of the paradox of thrift. The paradox is that if everyone attempts to repair their balance sheets at the same time and get financially health all at once, then the economy as a whole goes to hell in a handbasket.

Can I get a witness?

The solution is that we allow the government to temporarily and intentionally get its balance sheet into trouble and spend while we all save. I do see a problem with this fix. The trouble with this solution is that the government already has a balance sheet problem. BUT, nonetheless, if they government tries to fix it's balance sheet problem now, like Hoover did, then the problem will get as severe as the '20's.

Thursday, February 26, 2009

Robert Reich: Finally a Progressive Budget

Robert Reich's Blog: Finally a Progressive Budget

This is so right on!!! Reich understands so thoroughly the real roots of the recession side of our economic problems.

Praise for the Obama budget. I am so partisan; it is kinda funny.

Saturday, February 7, 2009

Stimulus and Politics - Ideology and Clear Thinking

I must admit that I get rather frustrated when I consider the 800 billion missed opportunities of the proposed stimulus plan. More accurately, closer to 300 billion of the opportunities are missed. The frustration is that both parties hold onto pet ideologies in light of what amounts to pretty simple economics.

Basic economics
I think the formula of basic multipliers and direct jobs created is not that hard to understand. Create demand NOW!!!
Tax cuts do not create demand when people have debt to pay off and consumer confidence is this low.

Obama Losing His Cool
The other hard pill to swallow is that Obama tried to get tough as opposed to staying cool and killing then with facts and confidence. When you have the truth on your side, start gently educating the populous.
Instead, the president got snarky.

Tuesday, February 3, 2009

According to Robert Reich - I am a Structuralist

Robert Reich on The Causes of the Economic Downturn

"But structuralists see it very differently. The bursting of the housing bubble caused the current crisis, but the underlying problem began much earlier -- in the late 1970s, when median U.S. incomes began to stall. Because wages got hit then by the double-whammy of global competition and new technologies, the typical American family was able to maintain its living standard only if women went into the workforce in larger numbers, and later, only if everyone worked longer hours.

When even these coping mechanisms were exhausted, families went into debt -- a strategy that was viable as long as home values continued to rise. But when the housing bubble burst, families were no longer able to easily refinance and take out home-equity loans. The result: Americans no longer have the money to keep consuming. When you consider that consumers make up 70 percent of the economy, the magnitude of the problem becomes apparent."

Read More

Sunday, January 25, 2009

Financial Regulation - Coming Soon

Obama to act fast on financial rules
The financial gurus have repented. Paul Volker and Tim Guitner and their teams are looking to begin actually regulating the financial instruments that led to the financial meltdown.

For example, credit raters are often paid by the inventors of tricky financial products to help construct products that the raters then rate. That is like being able to write your own performance review. Go figure?!?!

Robert Reich Open Letter for Truth- Conservative media figures falsely suggest that Reich proposed excluding white males from stimulus package

Conservative media figures falsely suggest that Reich proposed excluding white males from stimulus package.

This article and reich's blog post on the matter (Open Letter to Rush et al ) is a great read. If we think truth is important and slander and libel are immoral and unbecoming of Civil dialogue, then we will read and understand the real skewed perspective some of these partisans have.

Saturday, January 24, 2009

Obama and Repulicans on Stimulus

Obama Fleshes Out Further Details of Stimulus Plan

I am getting rather frustrated with this stimulus package. There are far too many business tax cuts. Think about this. If I am a business and consumers have money to buy 100 widgets and I make 10 dollars profit on those widgets, if I am taxed less on profit will I now build 110 widgets. NO!! I still can only sell 100 widgets. Lower taxes on businesses do not lead to more production when we already have too much capacity. The problem is demand.

The stimulus package should have only items that create jobs and put dollars in the demand side, the consumer. I am absolutely convinced that republican dogma is clouding people's thinking and the president is not standing up to this muddled thinking.

Thursday, January 22, 2009

War and non-remembrance - Paul Krugman Blog -

War and non-remembrance - Paul Krugman's Blog today is pretty hilarious. It shows me how ideologues get kinda slow when they try to defend..ahh... that the sky is not blue.

Friday, January 9, 2009

No Solution - The Obama Gap - December 2008 Unemployment

The Obama Gap - Paul Krugman
Unemployment Numbers Dec 2008
Even Paul Krugman, appears unwilling to say what the real problem is. The fact is the real problem is still not being solved.
The problem is wealth polarization and wage stagnation. This unwillingness to discuss the real problem makes the problem that much bigger.

The fact of the matter is that the only people who have the kind of money needed to jump start the economy is the rich.

I warned about this in September 2008 - The Solution is Wage Infalation via Tax Policy
and again in October 2008 - Stimulus and the Need for Wealth Distribution
The problem is simple. In order to compete on Wall Street companies need to make huge, huge profits. The result is even is a company makes huge profits their stock prices fall because someone else makes huge, huge profit. So to be competitve companies must lower wage.

The only way to solve this is for government to change the rules of the game. A good example would be to return to income tax levels on the rich that are pre-Reagan.

Wednesday, January 7, 2009

Ross, Holbrooke, Haass To Serve As Envoys

Ross, Holbrooke, Haass To Serve As Envoys

Huge news, Dennis Ross reported in as envoy/negotiator on everything Iran. All I can say is - OMG.

There is absolutely no doubt in Obama's very strong even hawkish pro-Israel position. This is fantastic news for Israel. I am reading Statecraft currently and, basically, Ross is a hero of mine.

Strategy for the Middle East, Barack Obama, and The Mideast’s Ground Zero

The Mid East’s Ground Zero - Thomas Friedman's piece this morning makes a few very important points on recent middle east historical events. I would like to expound a bit on how this relates to Christian support for president-elect Obama.

What we have currently in the Israel/Palestinian region is a shift in who the real power players are. Previously, the PLO/PA were the representatives of the Palestinian position. This made a two-state solution, given a few very difficult sticking points, a possibility. Today, we have a different scenario. With Hamas and Hezbollah in power on the borders of Israel the real power brokers are Israel and Iran. With the combination of a Shia state in Iraq and Iranian puppets in both South Lebanon and Gaza, a two-state solution no longer is practically on the table.

This scenario has occurred at least in part as a result of a few huge tactical and even strategic blunders. The USA supported elections in Gaza prior to the setting up of a state with any constitutional institutional structure. The result is that Hamas, an Islamist party, took power. This total rookie move was basically putting the wine of democracy in a vacuous political wineskin. The wineskin of democracy MUST BE A CONSTITUTION WHICH PROTECTS THE RIGHTS OF ALL CITIZENS and institutions which solidify the development of a sovereign state. The result has been that Iran is now bordering Israel through its proxy Hamas. This is a decidedly anti-two state solution and the state that is threatened is Israel.

So the strategy now has to be to undermine the Islamic narrative of Hamas, Hezbollah and Iran. Nothing accomplishes this vital strategic necessity better than the support and success of Barack Hussein Obama and a changing of the face of America in the political mind of the Palestinians. America must convince the populations Gaza, the West Bank and Southern Lebanon that their prosperity is not linked to Hamas and Hezbollah but rather to relationship with the West. What is needed then is most likely a new political player other than the Palestinian Authority in the areas of the future Palestinian state.