Tag Archives: political economy

Boeing and Foolish Questions

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In a Wall Street Journal article on the tortuous path to criminal prosecution that prosecutors would have in bringing Boeing to criminal trial over its 737 MAX crashes, Andrew Tangel, Jacob Gershman, and Andy Pasztor asked what seems to me to be a very narrow, short-sighted question.

Should prosecutors weigh Boeing’s importance to the economy and national security when deciding how to proceed with a criminal case over the 737 MAX crashes?

Of course prosecutors should—must—not. What’s truly important is the concept of weighing the risks to liberty and to national security of criminals being too big to be punished. We can never allow such a thing to enter even the run-up to criminal prosecutions.

If criminal actions can be seriously alleged against Boeing—based on the company’s behaviors—the company must come to trial. Only if found guilty, so there’d be a criminal sanction phase, could Boeing’s importance to our economy and our national security legitimately be considered—and then, not on the magnitude of the penalty(s), which absolutely must fit the crime(s), but only on the penalty(s)’s schedules of application, with interest accruing on any fiscal penalties not paid “promptly.”

The question of criminal trials for various individuals of Boeing’s management (and its aircraft testing function?) is an entirely separate matter.  The company’s importance to anything is wholly irrelevant here; the company can easily survive any number of its managers being locked up in a Federal hoosegow.

Some Economic Data

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From the October jobs report as summarized by The Wall Street Journal.

  • 131,000 new jobs
    • exceeded expectations
    • despite some 42,000 jobs lost to the union strike against General Motors
  • upward revisions of 95,000 jobs in August and September
  • job growth averaged 176,000 in the last three months, more than the 167,000/mo for all of 2019
  • overall labor force participation rate rose to 63.3%, which is rising despite baby boom retirements
  • employment ratio for prime-age workers, age 25 to 54, rose to 80.3%, highest since January 2007—since before the Panic of 2008
  • jobless rate for African-Americans fell again to 5.4%
    • new low since records have been kept
    • third successive month at 5.5% or lower so it’s not a statistical anomaly
  • labor participation rate for Hispanic-Americans reached 67.3%, best since September 2010
  • rise in average hourly earnings averaged 3% over last year
  • index of weekly payrolls rose more than 4% over last year, faster still for production and nonsupervisory workers

House Speaker Nancy Pelosi (D, CA), though, says these positive data

offer[] further evidence that the Republicans’ disastrous special interest agenda is hollowing out the middle class while enriching the wealthy and well-connected.

Do we really need someone so disconnected from reality in the people’s House?

Or is it that her impeachment hysteria is clouding her ability to interpret simple economic data?  In which case: do we really need someone whose judgment is so easily confused in the people’s House?

A Teachers Union Struck Chicago

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The Chicago Teachers Union struck Chicago (closing out the children of the city from 11 days of education; although, that may have been a net benefit for the kids, given the lack of education the city’s public education institution provides), and it got everything it demanded.

  • A new joint class size council will be created to address overcrowding. The council will get weekly updated data and will have $35 million per year to address situations on a case-by-case basis
  • The contract will run for 5 years, giving the board time to implement some of the massive changes in staff
  • Pay raises: 3.0% for the 2019-20, 2020-21, and 2021-22 school years; 3.5% for the 2022-23 and 2023-24 school year
  • Freezes health insurance premiums through 2022
  • A net zero increase in the amount of Board-authorized charter schools over the contract’s lifespan
  • The Joint Teacher Evaluation Committee—made of five union members and five Board members—will provide annual recommendations to the chief talent officer and CTU president on how to improve teacher evaluations. Student growth scores will make up 30% of an evaluation’s summative rating
  • Hundreds more union positions: librarians, social workers, and psychologists.

More money, more union jobs (more dues money), less cost, and especially less competition from those embarrassingly successful charter schools.

Rik Moran thinks Chicago mayor Lori Lightfoot abjectly surrendered to the union.  I think she’s in cahoots with it.  The 11-day strike just provided a fresh layer of snow to cover that Chicago dirt.

Tariffs

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The Wall Street Journal led off one of its Wednesday editorials with this gem.

The great counterfactual of the Trump Presidency is how much faster the economy would be growing without the damage of his trade protectionism.

Never mind that the great counterfactual of the FDR and Wilson Presidencies (among others) is how much better off the nation would be without the damage of their warfighting.

Once again, WSJ Editors choose to misconstrue the nature of tariffs as tools of international diplomacy and conflict with the nature of tariffs as protectionism. International conflict unavoidably involves domestic damage.

The real consideration is whether today’s temporary damage from deploying tariffs as tools is worth the long-term gain. Was the damage suffered in those wars worth avoiding the damage of abject surrender to brutal conquerors, worth the gains from winning those wars?

Would these Editors prefer abject economic surrender to the PRC, the payment of our intellectual property and technological advances to the PRC as tribute, to be followed inevitably by political subjugation after the collapse of our economy, to the long-term gains of getting a more honest trade regime?

A Strike “Template”

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That’s what the UAW hopes to use its bludgeon of GM as when the union turns to Ford and Fiat Chrysler.

The United Auto Workers will use the agreement at GM as a template that is expected to reach similar terms on wages and benefits in separate contract talks with Ford Motor Co and Fiat Chrysler Automobiles….

However, there’s no reason for Ford or Fiat Chrysler to succumb to this.  These are three separate companies, with separate goals, revenue streams, and cost structures; there should be three separate contracts with the UAW.

There’s also no reason for Ford or Fiat Chrysler to succumb to UAW’s move just because the union wants a common contract. What’s good for GM is not what’s good for Ford or Fiat Chrysler, especially since GM gave away so much of their farm, not just to end a strike, but to agree to higher costs solely to try to inflict those increased costs on their rivals. GM is well aware of the UAW’s auto industry “negotiating” pattern.

There’s also no reason for Ford or Fiat Chrysler to succumb to UAW’s move because the union’s anti-GM strike has drastically drawn down its strike fund and reduced its ability to pay its striking union members. UAW can’t hack, or can’t so easily hack, a prolonged strike against either company, much less both of them. The UAW also needs to consider the effects of its strike(s) on surrounding businesses: suppliers, suppliers of the suppliers, other businesses that serve the workers of those suppliers with recreation, restaurants, theaters, and the like.

Update: Since I wrote this, Ford has acceded to UAW demands, and they did so quickly.