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Bloggin’ Time » Economic Issues

Archive for the ‘Economic Issues’ Category

Hypocrits

Friday, December 12th, 2008

These people voted in favor of extending $700 billion to bail out the banking industry, which doesn’t actually make anything. But when the time comes to help one of the last industries in the country that actually makes something with roughly just 1/47 of that total, they vote against it in their drive to eliminate the UAW, and in the process, turn a recession into a depression by dramatically increasing the unemployed.

Here they are.

Bob Bennett, R-UT 
Richard Burr, R-NC 
Saxby Chambliss, R-GA 
Tom Coburn, R-OK 
Norm Coleman, R-MN 
Bob Corker, R-TN 
John Ensign, R-NV 
Chuck Grassley, R-IA 
Judd Gregg, R-NH 
Orrin Hatch, R-UT 
Kay Bailey Hutchison, R-TX 
Johnny Isakson, R-GA 
John Kyl, R-AZ 
Mel Martinez, R-FL 
John McCain, R-AZ 
Mitch McConnell, R-KY 
Lisa Murkowski, R-AK 
John Thune, R-SD

Max Baucus (D-MT) and Blanche Lincoln (D-AR) also turned their back on American labor, but they’re not pictured.

Labor cost facade

Friday, December 12th, 2008

We’ve been hearing so much about how labor costs are the reasons that the American car companies are in trouble, and that they should be brought in line with that of foreign manufacturers. So when Republicans get the chance to mandate the wages (so much for the free market..), you’d think they’d jump at the chance, right?

Well, not so much.

The automakers would [] have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees based in the United States, and the companies would have to impose equivalent work rules.

It was over this proposal that the talks ultimately deadlocked with Republicans demanding that the automakers meet that goal by a certain date in 2009 and Democrats and the union urging that the deadline wait until 2011 when the U.A.W. contract expires.

New York Times

Got that? That had their chance, and they reneged. Labor costs is just a facade. They want to just plain kill off the union. End of story.

Stock market 101

Friday, December 5th, 2008

If all your stocks are in this one company, you’re probably asking “what recession?”

Clusterstock

Both funny and depressing.

The Conservative Response to the Disaster…

Tuesday, November 25th, 2008

… tax cuts.. again…

“If we’re really serious about creating jobs, what we ought to do is, we ought to eliminate the capital gains tax for the next two years on any equities that are purchased,” he said. He argued that cutting the corporate income tax would help boost employment.

John Boehner

The theory that a short-run government spending stimulus will jump-start the economy is based on old-fashioned, largely static Keynesian theories. These approaches do not adequately account for the complex dynamics of a modern international economy, or for expectations of the future that are now built into decisions in virtually every market.

John Taylor

now would be a really bad time to make union organizing easier, because it would hurt business confidence in a recession.

Rich Lowry, National Review

None of this actually makes any sense in the least.

Look, I’m not opposed to cutting taxes when we can afford to do so. But we haven’t been able to do so for quite a while. The last three Republican administrations have given us over 3/4 of the $11.3 trillion+ national debt we have, and we can’t afford to cut our revenues (truth be told, we simply can’t afford Republican administrations, but that’s beside the point… I think…)

But these guys are just laughable and pathetic. They’re the same ones who, two days after 9/11, rammed through a capital gains tax cut. In their minds, when times are good, we should cut taxes to help the economy. When times are bad, we should cut taxes to help the economy. Enough already!

Orientation/the Myth of $70/hour UAW wages.

Monday, November 24th, 2008

So we’re up and running.I have a feeling this week will bring a lot of writing opportunities, but just to hit the ground running I’ll start by copy/pasting something I wrote this past weekend.

I’ve been hearing a lot about how the possible collapse of Ford, GM and Chrysler are the fault of the UAW recently, what with their $70 hourly wages. Senator John Kyl of Arizona recently peddled this argument on FOX News. The problem, however, is that it’s patently false. 

Let’s start with the fact that it’s not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research — who was my primary source for the figures you are about to read — average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income — hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.

[...]

[T]hen what’s the source of that $70 hourly figure? It didn’t come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits — namely, health insurance and pensions — and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages — again, $24 per hour — and you get the $70 figure. Voila.

Except … notice something weird about this calculation? It’s not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that — probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees — in other words, the cost of benefits for other people.

The New Republic

This has much less to do with unions (despite the crazy union-busters’ wildest dreams) and much more to do with an awful business model. For years and years, Detroit railed spent millions of dollars paying lobbyists to whine to Congress and get them to oppose higher fuel mileage standards. At the same time they completely ignored the writing on the wall and refused to build vehicles with better gas mileage and better technology (Toyota and Honda were smart and did this, and now they’re in a much better position than anyone in Detroit). Instead of playing with the possibilities of 45-50 mpg, they were building huge, gas-guzzling SUVs and Hummers that would tear them apart once an inevitable gas crunch hits the industry.

Now Detroit finally is starting to think about flex-fuels and hybrids, but the Asians are ahead of them again, as they’re playing with technology allowing transportation on pure electricity. So even if we do bail out Detroit, as is currently being discussed, they’ll be in trouble soon enough because nobody is going to want to buy their awful product that is a) out of date b) lower quality and c) from a failing company.

Bottom line: Detroit is in trouble because of business malpractice and awful management. It has very little, if anything, to do with the UAW or any other union as organizations like Redstate, FOX, Townhall and the National Review assert over and over again.

If we’re going to bailout Detroit (and unfortunately, we will) we should make sure that a) a certain amount is required to go to fuel efficiency technology and b) Detroit is required to pay back a portion of this loan. And if this was a just world, the Detroit executives would be out of job, but I’m much too cynical to believe this will happen.


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