Right to Work at The Times

The New York Times invited comments on Gary Chaison’s letter about the new push for right-to-work laws. It published comments today, January 22, 2012. 

My comment is that the revival is both different and similar from past anti-union campaigns.  First, the political meaning of the campaign today is different.  Compared to a generation ago when there was widespread union membership in the industrial belt and southern politicians sought to protect a competitive edge by keeping labor cheap – all of the former Confederate states and only these states adopted right-to-work laws – today the labor market is national and the rate of union membership in the private sector is back to where it was before the New Deal. The anti-union campaign today is clearly an attempt to change the subject from the financial industry that pushed our economy into crisis and from the “job creators” who are not creating jobs to a union scapegoat.   

            Second, Chaison comments about the history of right-to-work that “it is not clear whether” right-to-work laws undermined unionism or whether lack of unionism led to right-to-work laws. This is a question that can be answered. At the time of the New Deal, each southern state was dominated by an oligarchy of businessmen and Democratic politicians who operated an economy of labor exploitation. The question is How did workers react to the New Deal’s federal protection for their right to form unions expressed in the National Labor Relations Act?  In Texas, for example, about 350,000 workers had joined unions by 1953, posing a dramatic challenge to the old ways of doing business in the state.  But the oligarchs fought back, using their control of state government and the Democratic Party to sponsor a half-dozen anti-union laws (of which right-to-work was simply one) and to enforce discriminatory hiring.  Everyone in this debate understands that right-to-work undermines existing unions because it protects free riders, but what about organizing in the first place?  Historically, in the context of an anti-union political campaign, the Texas union movement was defeated because the anti-union laws substantially raised the cost of organizing – largely through expensive litigation – and because state Democratic leaders, such as Governor Allan Shivers, launched a counter-movement of massive resistance to school integration, which undermined labor unity.

         Today’s anti-union campaign has been met effectively in Ohio and prospectively in Wisconsin, if the million signatures on recall petitions is a guide, by broad-based organization. In Indiana, the first push was blocked, but a new push looks likely to prevail because the Republicans have the votes in the legislature.  But there and in other states like Michigan where the Republican Party is scape-goating unions, both public and private, an effective response is for unions to ally with the broader discontent over the economy and keep the focus on the financial and other corporate groups that are responsible for our economic plight. The resurrection of race-baiting in the South Carolina Republican Party primary is the bitter aftertaste of the old southern anti-union campaign tactics, which today's economic justice campaigners must meet head-on. 

Was Market Fundamentalism Bailed Out?

             James B. Stewart complains (The New York Times Business Day, January 14, 2012) that the Obama administration’s actions toward G.M. demonstrate why the government should not own shares in public companies.  It has a conflict of interest as an owner and regulator.  The U.S. government still owns about 30% of the shares. 

             Stewart’s analysis is tone deaf and ideologically tendentious.  His first example of alleged conflict of interest is that the National Highway Traffic Administration pressed G.M. to fix its potentially flammable batteries in its star product, the Volt.  Stewart comments “Rest assured that if Bain Capital owned G. M. it would not be subjecting the Volt to severe safety tests”!  He does agree that the government did the right thing to hold G.M. accountable just as it would any other car company that it did not own, but he believes that this conflicts with the government’s obligation as an investor to maximize shareholder value regardless of costs to others.  This is a massive assumption – though one that the U.S. Treasury has always maintained in its public testimony about the bailout – that the government is just like a private investor when it owns shares and should not care about the public interest.  What, pray tell, was the purpose of the bailout by Bush and the restructuring orchestrated by Obama if not overriding normal capitalist principles in order to serve the public interest?  President Obama specifically overrode the advice he received to save Chrysler (and sell it to Fiat). 

  May not the bailouts actually achieve both public and private interests?  No, Stewart argues.  His next example of a government conflict of interest was that the Obama administration should have sold out all of the taxpayers’ G.M. stock when the company went public in the fall of 2010 when the price was about $33 a share because it’s about $24 today, a 25% drop.  He dismisses the argument made at the time that dropping hundreds of millions of government shares on the market would undermine the public offering.  Instead, he claims that the decline in the share price since then is a result of the continued taint of public ownership, a.k.a. the Wall Street Journal’s talking point about “government motors”.  Investors undervalue the stock because they can’t count of the government investor to act like a real investor, Treasury be damned.  Yet Ford, which was the only one of the Detroit Three not to participate in the bailout, has seen its share price drop from $16 a share in late 2010 to $12 today, a 25% drop.  Could there be something else going on in the world economy?   

            Stewart also claims that the terms of the bailout that limit the pay of the top executives have inhibited G.M.’s ability to attract top corporate talent.  He notes that the Obama administration approved CEO Akerson’s pay of $9 million, but quotes Akerson’s comment that he would like higher pay for top management.  What a surprise!  Wouldn’t we all like to be in a position to make decisions about our own pay?  Stewart may have forgotten the years of bloated management compensation that was unrelated to performance, but the rest of us have not.  We might imagine that the talent pool is a bit deeper and that there are many auto designers (for example) who would work for mere millions.  In any case, G.M. says that these shackles have not stopped it from assembling a top flight team.   
          G.M.'s renewed taste for luxury products may be a perfect match for the market fundamentalism that also survived the government's rescue.  

December Wrapping

            Four posts that are not really a year-end wrap up.  Perhaps there will be time in the busy season to look ahead for new possibilities for American politics rather than assume the future is an extrapolation from the dreary present. But for now let's take note that the older means of governing (such as the NLRB) stumble along to solve certain problems even as our elected leaders dither and demagogue. 

            1.  As expected by all but the all-but-hysterical Republicans, the National Labor Relations Board’s General Counsel dropped his case against the Boeing Corporation.  Last April when the case was lodged, the Republicans excoriated the Board and argued that the threat of penalties on Boeing was a prime example of the Obama administration’s hatred of free enterprise.  Republican candidates for their party’s nomination for president called for the abolition of the NLRB.  In fact, all along, the Counsel’s action was within the mode of labor law since the Supreme Court’s 1937 decision in the Jones and Laughlin Steel Corporation case.  Boeing had publicly stated that it moved its new 737 plane’s production to non-union South Carolina in retaliation for strikes by the Machinists Union in Seattle.  Americans have always had the right to strike and, since the NLRA, the federal government has protected employees in the exercise of these rights from an employer who acts to penalize them for doing so.  The anti-labor rightwing has campaigned to delegitimize workers’ rights quite successfully since Reagan appointed a notorious anti-union apparatchik for the southern textile industry to head the NLRB in 1981, but the Board held firm this time against corporate intimidation.  And the outcome also went by the book, which is to say that the company and the union negotiated a settlement.  This used to be called “free collective bargaining” – in a nod to the ideology of “free enterprise” and in contrast to Communism – and it exemplified the genius of American pluralism.  The fact that few Republicans support pluralism is telling about how far from democratic principles the Party has strayed. The negotiated settlement led the union to withdraw its complaint and to the General Counsel decision to withdraw his case. 

            2.  After the House voted against the Senate compromise plan to extend the payroll tax cut and emergency unemployment compensation, the News Hour had a typical discussion in which the substance of the policy was never discussed.  It was all horse race – which party will come out ahead.  No analysis of the extremism of the libertarian rightwing’s campaign to build a bridge to the 19^th century, as Jacob Hacker puts it.  The mainstream media’s script that both parties are equally reasonable lets the journalists off the hook from asking questions about what politicians’ positions mean for real people.  Who can live on a $300 unemployment check, let alone without these benefits?  The late Irwin Knoll did ask such questions, but the News Hour never replaced him.  Now we have fake even-handedness.  So when Newt Gingrich surged in the polls among Republican voters in November and December, News Hour guest Dan Balz, the chief political reporter for The Washington Post, was asked by Judy Woodruff what we should expect from the Gingrich campaign.  “The first thing he has to do, obviously, is not make mistakes. In one way or another, all of the other candidates were done in by their mistakes.  And he has a history. We have watched him, all, for many, many years. He has a history of doing things that do himself damage. I think he's well aware of that. He's tried to run a disciplined campaign in this case.”  (News Hour, December 5, 2011) When we realize that when Balz made this reasonable sounding statement Gingrich had recently called for the abolition of laws against child labor, we have to wonder what counts as a “mistake”.  But that would be a substantive analysis.  What Balz and Judy and the News Hour mean by “mistake” is something like losing your temper or mispronouncing Kazakhstan (or not knowing how to spell potato) or saying that life begins at implantation as Gingrich did, rather than conception, as the Catholic Church asserts, which led Gingrich to “correct” himself.  These are mistakes that would undermine the candidate’s PR strategy.  It has almost nothing to do with how government officials will solve the people’s problems. 

            3.  President Obama gave a major speech for his re-election in Kansas on October 6, 2011 that has earned more comments than reproductions of the transcript in the pages of our newspapers.  Even The New York Times – the self-identified paper of record – did not.  Most papers reported on the commentary on the speech or simply characterized its tone, but the typical citizen was given no first-hand information. Obama invoked a speech 99 years ago in Kansas by Republican President Theodore Roosevelt, who called for vigorous regulation of big corporations to make them serve the public interest during his comeback campaign in 1912.  It was the Republican Roosevelt who had used the power of the government to break up the Standard oil monopoly and promote the progressive income tax.  Obama made much of the parallel to today's America in which big corporations, especially the financial titans on Wall Street, have gained all too much power over our democracy. Corporations are bigger than ever and they pay the smallest percentage of taxes in 60 years. The U.S. Chamber of Commerce has emerged as the best-financed army of lobbyists according the Center for Responsive Politics. The citizens appear as left in their dust.  But many conservatives were apoplectic that the President dared to call out our corporate masters. How dare the President call for fair play for everyone – imagine including the rich and powerful – to play by norms of honesty and earned income! 

                 In truth, we need a debate in the U.S. about fair play requires in our “democratic capitalist” society, as George Bush memorably called it in his nationally televised speech beseeching taxpayers to support his $700 billion bailout of the financial titans.  Until then, it had been “the free enterprise system”, but now capitalism needed the government to survive and democrats had to rush to solve the problems that the marketplace could not.  Does fair play mean that a person is entitled to whatever he can grab to own? (such as might be the Gordon Gekko or libertarian position); does it mean equal pay for equal work (the Civil Rights Act of 1964); does it mean equal shares from the increased productivity created by joint efforts (the contracts between the United Auto Workers and the Detroit Three companies); does it mean equal opportunities for individuals based on their inherited social status (the old Republican position of William F. Buckley); does fairness mean a commitment to mitigate the inequalities that arise from history and circumstance (John Rawls); does it mean instead the obligations we owe each other as members of a shared national community of fate and meaning (Michael Sandel); but whatever it may mean, the vilification of any one of these does nothing to advance the public interest. Some 69 years ago, shortly after the attack on Pearl Harbor when war fever and patriotic unity were riding high, the New Deal era U.S. Supreme Court nonetheless affirmed that no doctrine was orthodox in America because the government had no authority to impose an orthodoxy. Let the debate continue.

            4.  I have trouble seeing anything novel about Perry’s conservatism as claimed by Tom Barry’s essay on why we should take Rick Perry seriously (“The Return of State’s Rights”, Boston Review November-December 2011). 

                 Perry’s anti-federal government rhetoric is firmly in the tradition of the previous generation’s southern politicians.  As Barry correctly points out, Perry is not at all against government authority and the use of coercive power. Perry is all in favor of muscular preventive military power in the world and on the common border with Mexico.  Like southern politicians during the era of legal white supremacy, Perry is opposed to federal power when it interferes with state political and business leaders’ preferences for social and economic policies.  They too argued that local people could find innovative ways to handle problems of race and labor.

                 So, also like historical southern pols, Perry has no problem using state government authority to subsidize capitalist development (which many Texans call crony capitalism) and to suppress the rights of citizens (in the segregation era this included Jim Crow; today it notably includes stiff opposition to the NLRA, capping taxes and public services even though the population has increased dramatically, limiting unemployment compensation to about 20% of the unemployed, and dragging welfare benefits down to about 27% of the poverty level).  However, of all of the southern states, Texas stands out as the one state that historically sent more tax money to Washington than it received in return, a history which greases Perry’s ostensibly contradictory acceptance of federal funds.

                 So, it is true as Barry says that the immigration issue doesn’t conform to “free market” values, but that’s because Texas conservatives aren’t really advocates of freedom for economic agents. Just ask whether immigrant workers have the right to bargain and one will be met with cold incomprehension. Texas elites have long favored immigration from Mexico as long as workers were directed to local employers through pass laws, licensing labor brokers, violence, and other techniques. Moreover, toughness toward immigrants does not distinguish Perry from the Obama administration’s actual record.  The shoe that hasn’t dropped is Obama’s call for protecting the rights of immigrants who may be invited into a new guest worker program.

                 In short, arguments by the right, center, and left about what level of government is better at accomplishing public ends is better steered toward debates about substantive goals than formalist claims about state’s rights and centralized government.

A Familiar Partisan Dynamic: Left Cleans Up and Gets Blamed for the Mess

         
          There is an interesting similarity between the Greek political crisis and the American one.  In Greece the former conservative government led by the New Democracy party ran the country’s fiscal health into the ground, although left also contributed to the crisis.  When a new government was elected in 2009 headed by George A. Papandreou, the leader of the Panhellenic Socialist party, Pasok, it was faced with cleaning up the mess.  But the conservatives refused to help and even condemned Papandreou’s conservative measures to restore fiscal balance in order to exploit popular outrage over economic distress and gain an advantage in the next election.  This scenario fits the U.S. very well, at least to this point.  In frustration, Papandreou called New Democracy’s bluff by announcing a popular referendum on the austerity plan he had agreed to with the leaders of the Euro Zone.  Knowing that the conservatives are deeply committed to the Euro (as is Pasok), Papandreou was confident that they would have to campaign for the plan and thereby share the responsibility for the crisis and its solution.  Although the referendum gambit was an internal Greek political maneuver, it alarmed European political and financial leaders.  Then Papandreou withdrew the referendum and made an offer to step down in favor of a unity government with New Democracy (and other parties) to support the plan in the national interest.  But as of November 8, New Democracy refused to join the government and take responsibility:  it wants to keep voters focused on Pasok’s austerity plan until the next election when it hopes to win and, of course, carry out even more draconian policies. 
       

Union Successes in the Midwest but Will the Dems Take Credit?

          

          Organized labor's big (61%) win in Ohio to overturn the anti-collective bargaining rights law passed by the Republicans has led the governor to swear that he’s now heard the voice of the people.  In Michigan where the candidates for the Republican presidential nomination held their latest debate, all of the candidates affirmed their opposition to the bailouts of G.M. and Chrysler – they would have let them fail.  But Michigan’s Republican governor, Rick Snyder, said the bailout worked and urged everyone to look ahead – no need to thank President Obama.  But outside the Midwestern manufacturing belt or what’s left of it after over 3 million manufacturing jobs were lost since 2000, will Obama and the Democrats claim credit for the rescue of the U.S. companies?

One reason why it is difficult to claim credit is that “it could have been worse” (and it would have been much worse if the government hadn’t acted) is not a compelling slogan when there were a lot of losers who lost their jobs and when many of the winners took a bruising.  A second reason is that the ways in which a government (or political party) can help private groups to solve their inter-organizational problems are mostly by reinforcing a dynamic of problem-solving cooperation when the parties actually want to cooperate with each other, which was true of the two core groups in the big auto companies, namely the UAW and operations managers.  But this solicitude for the groups and the visibility of government support for them can look to others outside the charmed circle of solicitude – and by 2009 those outside the circle of union-management negotiations in manufacturing were the vast majority of Americans, even in Michigan, Ohio et al. – as placating special interests rather than serving the public interest. 

There is a huge technical literature about the logic of this inside-outside perception as well as political historiography that observes that “the public interest” has been defined to prevent government help to groups to overcome their collective action problems.  A hundred years ago the liberal-conservative slogan was “no class legislation”; everyone was an individual.  In order for Obama to claim credit for saving the U.S.-based companies (and the other companies, given the inter-twined supplier base), he has to make a strong case that “the public interest” was served by saving them.  Any particular benefit that the UAW and corporate managers and investors at G.M. and Chrysler received was incidental to the larger purpose of stabilizing a significant segment of the U.S. economy at a time of virtual free-fall in the national economy.  After all, what purpose in society does not have real individuals in a position to gain or lose from any public action?  Moreover, “if anyone asks” about the details, the rescue plans controlled the wages of incumbent union workers, drastically cut entry-level pay, cut health care, put tens of thousands on the unemployment lines, and banned strikes for four years.  What the administration’s rescue team also accomplished was to reinforce the reform coalitions within the companies that have been working on manufacturing performance and product quality.  The products are better and more fuel efficient.  The new contracts signed last month also brought back to the U.S. thousands of outsourced jobs.  But will anyone ask?  Who will tell the people?  Even Democrats have shied from taking credit.  They don’t want to appear too close to the unions and/or risk the charges from Republicans about crony capitalism (it is truly a weird world in which Republicans can make this argument with a straight face; just take a look at the careers of George W. Bush and Dick Cheney). Outside the Midwest, voters may be hostile to the rescue unless they get rescued, too.

But this is a bright spot in Obama’s record! The auto industry had been in a perpetual condition of upheaval since the original Japanese import surge in the late 1970’s, after which the Japanese car companies invested in manufacturing capacity in the U.S. in the 1980’s and 1990’s.  During these years the UAW and the companies were in a constant mode of contentious reform.  By the time that the Bush administration bailed out G.M. and Chrysler in December 2008, the companies’ managers and unionized employees had already made dramatic improvements in manufacturing practice.  Thus, the key to Obama’s auto rescue was less about the exogenous forces of global market competition and a controlling state and more about the accession of a knowing political coalition that empowered the reformers to pursue their goals. The Obama administration seized an opportunity created by the Bush bailout to build on the growing experience with industry restructuring to reconfigure the place of the companies in the U.S. industrial landscape.  As UAW president Bob King argues, the American companies are now the best practice in the industry because they have advanced manufacturing and worker representation.

The institutional presidency was an important resource for the U.S. auto industry’s adaptation as it can be for reformers of many stripes. Yet comparative political analysts typically claim that the U.S. government does not have the capacity to restructure an industry.  But that’s wrong in this case.  The presidency’s authority in economic policy may empower a president to act when this authority is enhanced by the broader network that brought him to the office.  In Obama’s case, the presidential coalition included significant new resources from private equity banking and management consulting, which had been developing new capabilities of their own since the industry policy debates of the 1980’s.  These groups extended their expert services to the White House for the restructuring and enabled the mostly successful rescue because they supported the union and management reformers in the companies.

What’s a Moderate Journalist Worth?

     For too long our mainstream news reporters have followed the journalistic convention that Congressional Democrats who vote with Republicans are “moderates”.  This is a purely Republican rhetorical construct repeatedly used by Mitch McConnell and company, which has been well dissected by Jonathan Bernstein.  

     During the long drawn-out negotiations with such so-called moderates about the Affordable Care Act, the law was weakened to the point that the bill’s primary accomplishment – if  not overturned by the Supreme Court next spring – is that the federal government will subsidize Americans to purchase private health insurance plans. There is nothing moderate about this outcome:  it leaves all the for-profit players in control of the health system and has virtually no cost controls whatsoever. 

     The latest triumph of so-called moderation occurred yesterday when Democratic “moderates” in the Senate supported the Republicans’ filibuster of one piece of President Obama’s Jobs bill.  Tonight, the News Hour duly dubbed the renegades “moderates”.  What is moderate about voting against a proposal to keep police, firemen, and teachers on the job at the cost of a ½ of one percent tax on incomes over $1million?  An individual with an annual income of $1.1 million would pay $500 more in taxes beginning with the 2013 tax year! What is not moderate about that? The tax would keep hundreds of thousands of public employees at work. The president had proposed a tax increase for household incomes over $250,000, but Senate leaders reduced the tax take to a surcharge on millionaires.  Even Karl Rove’s outfit’s polls found that surcharge was supported by two-thirds of the American people.  

     When will the News Hour and other “moderate” news reporters wise up and escape the Republican narrative?  

Repudiation, Not Responsiblity

Just as the President is gearing his rhetoric for combat with the Republican No Deal Party which won’t pass his new jobs plan, the Vice-President is muddying the message:

Vice President Joe Biden acknowledges that it’s time to hold the Obama administration’s feet to the fire for the sorry state of the U.S. economy instead of continuing to blame President George W. Bush.

“Right now, understandably — totally legitimate — this is a referendum on Obama and Biden and the nature of the state of the economy,” Biden said during an interview with South Florida public radio station WLRN this afternoon.

Biden made the startling comment during an interview in which his main goal was to pitch for support of President Barack Obama’s American Jobs Act.

The vice president dismissed polls in which people continue to blame the Bush administration for the economy.

“Even though 50-some percent of the American people think that the economy tanked because of the last administration, that’s not relevant,” Biden said. “What’s relevant is we’re in charge. And right now we are the ones in charge and it’s gotten better, but it hasn’t gotten good enough.”  (September 29, 2011 Newsmax Wire)

Biden has not received the message that turning the other cheek is no longer strategy.  To the contrary, what the White House needs to do is to repudiate the past regime.  The economy is not progressing because of the enormous failures of neo-liberal ideology as a philosophy for governing the country.  The failures are well-known – the gross irresponsibility of the financial CEOs, the regulatory failures to prevent dangerous food in the food supply, the failure of the tax code to get the extremely rich and powerful to pay their fair share, the scape-goating of the unionized middle-class, the BP blow-out in the Gulf, the enormous unfunded expense of the war in Iraq, and on and on. These are Republican problems caused by Republican policies and the President is not responsible for them.  Without repudiation of the past policies, the Democrats cannot change the subject and take the country in a new direction.