Trade Unions

The following arguments depend somewhat on whether you value the existence of a "Middle Class" in America. I say this because the rise of trade unions in America is certainly one significant way in which a strong Middle Class was historically established. Personally, I believe that a strong Middle Class is economically essential because these are the people who have sufficient disposable income to purchase products, and purchasing power is essential to a healthy economy. As Robert Reich argues, the extremely rich do very little for the economy on the grand scale because, while they have enormous purchasing power, they do not use it in helpful ways. While those in the middle class (perhaps 85% of Americans) spend almost 100% of their income in the marketplace, wealthy people (perhaps 5% of Americans) can't come anywhere close to that. Thus, a shift in wealth from the Middle Class to the Upper Class has the direct effect of removing a huge amount of purchasing power from the marketplace. That's what has been happening for the last three decades. Little wonder that small businesses are pessimistic about opening or expanding their businesses. 

Why did trade unions arise? The history of unionization in the late 19th Century and early 20th Century is striking. Communities were very often dominated by one or a few big employers. Laborers were paid whatever the employer wanted, usually as low a wage as possible, still keeping the laborers healthy enough to work. If pay was insufficient to meet family needs, the laborer had no chance of improving his position. Basically, he could quit and find some other job. But where? When groups of laborers attempted to unite and fight for higher wages, better working conditions, or health benefits, they were often beaten down by police or murdered by thugs. So long as the wage "negotiation" was between the industry and the individual laborer, the individual didn't have a chance.

Unionization meant that laborers had significant power to negotiate with employers in order to improve their situation. But this usually meant creating a "union shop" where all laborers had to participate and pay dues. This is where the inevitable long argument of the libertarian begins, that no one should be forced to do anything they do not want to do. Of course, the counter-argument here is that laborers who choose not to belong nevertheless reap the benefits of the union's collective bargaining without helping or paying for it. It can be argued that majority rules. If the majority want a union to represent them, then everyone has to participate. This principle runs throughout our society, yet it seems to be something that no libertarian will ever agree to.

The attack on unions today threatens not only the welfare of laborers but also the very existence of a middle class. In that sense, while it seems to make sense to Conservatives and Libertarians, it makes no sense for the health of our economy.

Our National Debt

Here's a link to a very interesting summary of our national debt. http://www.businessinsider.com/to-whom-does-the-us-government-really-owe-money-2011-3 The heart of this article is the pie chart showing to whom the debt is owed.

 Notice first that 68% of the debt is owed to Americans in one form or another. The largest category by far is American individual and institutional investment in America. Much of this investment is through private retirement funds.

But one of the most interesting figures is the 17.9% owed to the Social Security Trust Fund. That fund is fed by the Social Security taxes levied against American incomes. Why should the US owe money to that Fund. The answer, of course, is that the Bush Administration borrowed from the Fund in order to finance wars. So is Social Security really the problem? Basically, the money was stolen from you and I and now the conservative side of our government doesn't want to pay it back.

For Those Who Hate the Federal Government

First of all, it's just way too easy to blame all our problems on the Federal government. It's the one big thing out there that you can easily throw stones at. But if you succeed in shrinking it to oblivion, will you be happy? I doubt it very much.

One of the oft-sited reasons is just wanting government off our backs. We want to do things ourselves. All of that is very dubious however. Do we really have the time (ourselves) to supervise drug and food safety, to help states finance highways and bridges, to monitor aircraft? The true answer must be that we just don't want any of these things done. 

If we do want things like this done, the haters of Federal government always turn to the idea that the states would do a better job. By what evidence do we really believe the states would do a better job? Every state I have lived in has embodied the age-old conflicts between rural interests and urban interests. It's the same old situation, government on top of us, dictating what will be done. Fleeing to the states is not the answer.

Fleeing to the states is the answer in only one important way for some haters of Federal power. It means that in their specific state environment they will be able to get more of what they want. If you hate the EPA, then you can hope that your own state will have nothing to do with environmental protection. Or you can hope that your own state will look the other way when it comes to your company's production of toxic chemicals for agricultural use. Or you can hope that your own state will have no interest in civil rights for minorities. If these people get their way (and they seem to be making remarkable progress), there will be nothing left of what we might call a national identity. Forget about seamlessly traveling from one state to another. You will have to be aware of every state's disposition toward A, B, or C. Kinda makes you want to stay at home.

Our Poor Economy

Politicians, especially so-called conservative ones, love to talk about the national economy as though it were just a giant version of "Mom and Pop" back home. It makes great political talk because it's something everyone understands. Unfortunately, it is just a fraud. National economics has nothing to do with Mom-and-Pop economics.

Along with this foolish comparison goes the myth that Mom-and-Pop always operate on a balanced budget. Perhaps some do, but the majority of Americans have been living on increasingly high levels of debt for the last three decades. That's what hit us in the face in 2007; credit dried up.

The national economy is very complex. Contrary to the Mom-and-Pop economy, the delicate relations of employment and distribution of wealth lie within the national economy, played out by different factions of the population. Business opportunities and job creation absolutely depend upon a large population of people who have money and want to consume. When the distribution of wealth tips largely in favor of a small portion of the population, the remaining population is left with little money to spend (and no availability of credit). There is no point in businesses expanding and creating new jobs. It doesn't matter how many tax breaks or other benefits the Republicans give their rich friends, there is no point in creating jobs when the bulk of Americans have no ability to consume!

Ironically, in the situation where the majority of Americans have little money for consumption, government spending is the one factor that can stimulate consumption and lead to job creation. This, of course, means going further into debt and is precisely what our conservative Republican wizards are not inclined to do. They would rather cut government spending --- i.e., put thousands of government employees out of work to further reduce employment and reduce money available for consumption --- and balance the budget. 

Of course, taxing the super wealthy is the last thing we would want to do even though that might balance the budget and put more buying power in the hands of the majority of Americans. This is supposedly all because they are the honored entrepreneurs who will create jobs for us. But the brutal fact (if Republican politicians would only look at it) is that these same honored entrepreneurs would far prefer to expand business and create jobs off-shore where wages are lower, resources are cheeper, and people are still able to consume. They know the situation in America and they know that the meager share of wealth they have left the poor slobs in 95% of the population is not enough to stimulate thriving businesses. 

The Republican Solution

Gosh, the Republicans do have a plan to create jobs in America. All we have to do is reduce taxes on corporations and the most wealthy citizens to 0%, end all oversight, throw away all regulations on business, and then just stand back and watch the jobs bubble up from the muck.

Does anyone really believe this bullshit? There is no empirical evidence for it at all. The eight year Bush era, which was a wild-and-crazy period for doing just this sort of thing, did nothing for jobs.

Meanwhile, the Republicans want to butcher government spending and that means, in effect, throwing all kinds of people out of work --- thousands more jobless. Do they ever think any of this stuff through?!

But, of course, their real agenda items are to end abortions, bash gays and lesbians, and put the church back into the state. Funny, Republicans are all against government intervention except when it comes to pushing off their "morality" on the rest of us.

Having a National Character

The problem with the current Republican position on the Federal government --- which is a position that would reduce the Federal government to something quite minor --- is the question of whether we have "national interests" or not. The Federal government is how we come together as a national people to address our national interests. If we accept the idea of reducing the Federal government to nothing, or at least to something quite small and impotent, then it seems to me that we are claiming that there are no essential national interests. Protecting the boundaries and perhaps collecting tariffs seem to be the only interests that Republicans respect.

For example, it is appropriate to ask whether civil rights is a national interest, something that defines us as a people and, hence, something that does not vary from region to region, or state to state. If Federal oversight on civili rights is eliminated or hog-tied by budget cuts, then local interests and prejudices can take control. Civil rights would become a regional disposition and we can only imagine the regions in which conditions would change radically. Respect for civil rights would no longer be a matter of national character.

Another example we might consider is the Food and Drug Administration. Is it a matter a nation interest to oversee the commercial distribution of foods and drugs? If we declare this as a regional responsibility, will the states pursue oversight with similar standards or will regional producers successfully avoid true oversight? If protecting one's health becomes an individual responsibility, what resources will be available, especially if only regional standards are maintained and interstate commerce is unrestricted?

The fact of the matter, it seems to me, is that we have a great many national interests today and, consequently, we need a Federal government through which we function as a nation to address these issues. These are not issues that we can afford to be decided on regional bases; and they are issues that define a national character --- that is, what it means to be an American.

What is Government About?

Herewith a few comments for anarchists, libertarians, and right-wing conservatives.

There is a common thread within these groups even though they may not think so. That common thread is, at the very least, the destruction of the Federal government. On the right wing, the arguments are principally fiscal; they don't like paying taxes and the government spends too much for their taste. Cut Federal programs and everything will be fine! But there is a complete unwillingness or ignorance about where that leads us. Libertarians and anarchists, on the other hand, are unblushing in their desire to eliminate government. So self-reliance is the message, one way or another.

The big question that looms in my mind is what self-reliance actually means, as a practical day-to-day system, for these people. Once government as such is gone, where do we all go from there?

Personally, I can attempt to grow more vegetables in my back yard and I suppose that I could put in some chickens and rabbits. It's doubtful, though, that the water company will continue to exist and I'm not sure where I'll get the water for irrigation. Since banks will undoubtedly fail or just default on what they owe us, we'll be pretty unlucky about buying anything. We've trusted the financial system all these years and don't happen to have gold bricks under our mattresses. It'll be pointless to have automobiles since the black-market price of gas will be way out of sight and the roads will not be maintained anyway. Guess that wipes out our vacation plans. God, real freedom is wonderful isn't it! That is freedom to stay at home and guard what little we have left with my shotgun.

But some of my libertarian friends will say this is all wrong. The people will arrange to do what they need to do by way of their collective action. That's great. But isn't that what government was in the first place! Government was the way in which we came together collectively to do what we all have a need to do. We needed a system of legislation, or decision making, to guide us and we needed taxation in order to make sure that everyone contributed.

Gosh, is that what government was about? Too bad we threw it away!