Unions and Elections

Who says unions don’t try to influence the outcomes of elections—at the ballot box itself, not via campaigning in a run-up to an election?

The image below, from a Wall Street Journal article about a Boeing engineers union contract election shows the degree to which a union will go to tell its members how to vote.                                                                                     

Sequester Extortion

Last week, President Barack Obama granted a public appearance with suitable props—emergency medical personnel carefully arrayed behind him as he gave his appearance—wherein he said what he would do if he didn’t get his way on canceling his sequester.

He said he’d fire those very emergency medical personnel, along with cops and firemen, if he didn’t get his precious tax increases.  They’d be the first to go in the spending cuts he’d enact under the sequester.

This is dishonest on two fronts.  For one thing, those folks are paid by local jurisdictions; they’re not Federal employees—they’re not his to fire.

For another, the sequester represents the enormous sum of $85 billion in spending cuts this year, or 5% of the collective budget of his Executive Branch’s non-defense Departments and agencies and 7% of his DoD budget.  The leader of the party of great savings through eliminating fraud, waste, and abuse now is saying he can’t find a trivial 5% of fraud, waste, and abuse in any of his Cabinet Departments or any of his programs.  Or he’s refusing to look.

It’s going to be an ugly four years.

Poverty and Welfare

The connection isn’t only moral.  It’s economic, also, as new research is showing.

Richard Vedder, an economics professor at Ohio University says that our exploding welfare state has led to an American poverty rate of 14%—these welfare programs actually are

creating a dependency on government, which is unhealthy both for the individuals involved and their children, and also for the broader society[.]

Specifically, Department of Labor statistics show four programs in particular contribute to  Americans’ increasing dependence on government.

  • Food stamps, or The Supplemental Nutrition Assistance Program, as it’s now known.  Nearly 30 million more Americans receive them than in the year 2000.
  • Social Security Disability: 3 million Americans  received payments in 1990—today it’s 8.6 million.
  • Pell grants: 3.9 million students were awarded them in 2000.  Today it’s 9.7 million, even though  nearly half of graduates work in jobs that require no degree.
  • And extended unemployment benefits: 26 weeks had been the standard—today it’s 52 weeks or more for many [and during the Panic of 2008 and ensuing Obama Recovery, it’s run as long as 99 weeks].

This isn’t just academic theorizing, though.  Doug McKelway, in his article at the above link, talked, among others, to a sandwich shop owner in Maryland:

Kyle Murphy…described how anecdotal evidence he sees as an employer jibes with Vedder’s assessment.  He often sees new hires quit to seek government benefits.

“The people who know how to use the system best get the most out of it.  It’s not necessarily the people who need the assistance the most,” he said.  Murphy has seen many of his employees quit jobs, then claim they were fired to obtain unemployment benefits.

Vedder concludes,

We have had nearly four decades with growing incomes, rising standard of living for the majority, yet the poor have grown in number even as a proportion of the population.  So some of these policies are not working.

I’m more cynical: since they create a captive collection of voters for the hander-outers in government, maybe they are working.  Never mind that the outcome puts our republic at risk.

China’s Economic Course

In a nation that’s facing a demographic implosion (a birth rate of around 1.5 against a rate of roughly 2.1 required to maintain current population levels, and an aging population (expected by 2050 (the current generation plus their children) to have four workers in the age band 50-64 for every three aged 15-29, and for every 100 people aged 20-64, 45 over 65), that chronically lives on the edge of famine, and that has a population increasingly aware of what could be compared to what is, the PRC government is not treating its poor or its farmers (22% of whom will be over 65 as early as 2030—the current generation) very well.  And so it’s not treating its society or its economy with any foresight.

For instance:

In December 2010, when [Fu Liang]  says a campaign of harassment drove him off the small plot where he ran a fish farm, the local government paid Mr Fu just nine yuan ($1.45) a square meter for it.

The plot was quickly resold for 640 yuan [$103.11] per square meter to a developer, a national database of land transactions shows.  The developer has built villas that sell for 6,900 yuan [$1,111.67] a square meter.

A markup of a factor of nearly 10 at each stage.  Fu’s 9 yuan meter of fish farm was worth far more than he was paid.  In another sense, it was priceless, since he didn’t want to sell.

Mr Fu now is unemployed, one among tens of thousands of former farmers who inhabit the impoverished fringes of Chengdu, a city in southwestern China.  He has no heart to start another business.  “What’s the point if the government can just destroy it?” he says.

With no sense of irony, the PRC’s new president, Xi Jinping, claims to want strengthen that demographically unstable society and its unstable economy—through property (land) ownership.  After all, as Fu pointed out,

precarious land rights mean little incentive to invest in improving agricultural output, and no asset that can be sold to fund a move to the city.  Low compensation for the millions ousted from their land—coupled with ineligibility for social benefits because they aren’t registered as urban residents—means for many a life of poverty on the edges of the cities.

And no incentive to bring additional children—boys only, mind, in a mandated one child environment, with the bias’ own long-run population sustainability implications—into the world.  And the one-child policy was put in place explicitly to achieve the population reduction about to occur sharply.

Fat chance for any serious change:

“Push forward scientific development and advance social harmony,” proclaims a banner draped across one construction site, parroting a catch phrase of Xi’s predecessor, Hu Jintao.  Mr Fu, surveying a noodle bowl of highway overpasses, said, “A few years ago, this was all farmland.”

Because farmland—the means of feeding the population—stands in the way of progress.  Xi will have a great deal of trouble reversing that, especially with the money to be made converting farmland to urban land.

Fact Checking the Fact Checker

The AP has a series of “fact checks” on President Barack Obama’s Tuesday State of the Union claims.  Here’s one of particular interest to me.

OBAMA: “After years of grueling recession, our businesses have created over 6 million new jobs.”
THE FACTS: That’s in the ballpark, as far as it goes.  But Obama starts his count not when he took office, but from the point in his first term when job losses were the highest.  In doing so, he ignores the 5 million or so jobs that were lost on his watch, up to that point.
Private sector jobs have grown by 6.1 million since February 2010.  But since he became president, the gain is a more modest 1.9 million.
And when losses in public sector employment are added to the mix, his overall jobs record is a gain of 1.2 million.

As the checker says, that’s true enough “as far as it goes.”  I wrote just last fall about what our jobs numbers should have been had certain events come to pass as Obama promised they would under his policies.

He promised in 2009 a 5.5% unemployment rate by now.  How many new jobs would have been created had we actually reached his promised number?  In December 2009…the civilian labor force was 153,059,000, of which 137,792,000 Americans were employed, a 10% unemployment rate….

In September 2012…the civilian labor force was larger, at 155,063,000….  There were some 142,974,000 Americans actually employed—that increase of 5,000,000 of which Obama is so proud.

However, a 5.5% unemployment rate corresponds, if my 1st grade arithmetic serves me well, to 94.5% of the civilian labor force actually employed: 146,535,000 Americans.  …there are some 3,561,000 Americans that should be employed but aren’t—because Obama’s proudly proclaimed policies have come up short, and we aren’t anywhere near 5.5% unemployment.

Let’s look at this another way.  ….  A normal recovery coming out of a downturn as deep and steep as was the Panic of 2009 typically sees growth rates of 5%-6% per year, or more.  This Obama recovery has been 6.7% over the entirety of his term in office….  Had we seen a normal recovery (and using a pessimistic 5%/year growth rate), we would have reached today’s unemployment rate after a shade over one year—in 2010—and we would have been back to full employment (in the range of 4.8%-5.5%) in just under 2 years—by [2011].

There’s more to it (and the links there) even than that, though.  Under Obama’s policies, our labor force participation rate has been shrinking rapidly as Americans despair of getting a job and quit looking, with its own impact on Obama’s jobs claims [emphasis in the original].

The labor force participation rate fell to 63.6% from 63.8% in October [2012].  If it had just held steady since then, the unemployment rate would be back over 8%.  Indeed, if the LFP rate was just where it was in November 2011, the unemployment rate would be 8.3%.  Some 542,000 Americans left the labor force just last month.

and

The number of long-term unemployed remains at a sky-high 40.1%, the same as in August.

The following graph tells the tale.