Notes on Economics - Unions

Here (thankfully, since I am ready to move on) are the last unpublished economic notes, on the subject of unions, about which John in Phoenix and I dialogued in the comments following the recent posting on globalization.

Civil rights came to American unions in the 60s and 70s, helping raise the economic prospects of African Americans, but labor leaders do not seem to be emphasizing this group in their new organizing efforts.

The NFL effectively busted the players union in 1987, but this last season had all the players wearing the initials of the deceased union president on their helmets.

The AFL-CIO chooses to function more as a lobby group, while splinter unions believe organizing more workers is a better approach.

France changed the law to allow more hire/fire power over young workers to solve a problem of "bad hires". What really was needed was better training for students to be better workers and better training for managers to be better managers.

Another problem with retirement based on private investment by the retirees rather than on the guaranteed benefit plans the unions used to negotiate is that those near retirement, when the market drops, decide they cannot retire, which keeps a job away from someone who needs it, which in turn hurts the economy and adds to the downward spiral.

Today, the NY Times had an interesting article about the many year struggle of nurses in Kentucky to form a union in spite of ongoing illegal intimidation by the corporate employer.

Before leaving the subject of economics for this round, I highly recommend this excellent PDF format article by Joe Keefe the head of the sustainable investing based Pax Funds. It is a well reasoned view on the wisdom of adopting a long range approach to economic viability, factoring in social and environmental concerns. The article includes some historical context and proposes some meaningful changes.

Notes on Economics - Taxes

More from the unused note files:

Before the economy disintegrated, Fed Chair Bernacke, like Greenspan before him, favored making the Bush tax cuts permanent, though he would not tie that to budget cuts.

Progressive taxation is a more just way to meet social needs that relying on philanthropy alone.

When Exxon profits increased 40%, their tax bill went up only 14%.

Teddy Roosevelt inaugurated the estate tax to strike at the "aristocracy of wealth". While the tax only applies to the richest 1 or 2% of the population, 40% of the people think it may apply to them also. Attacks on the tax typically use an apocryphal small business that is destroyed by the tax after the death of the owner. Repealing death taxes for the wealthiest of the wealthy could cost $300 billion to one trillion in lost taxes over 10 years. One change to the tax that makes sense though is that the exemption allowed should be adjusted for inflation.

Many years ago my brother and I came up with an income tax idea I still find intriguing. Establish a minimum income figure below which no tax is due, the idea being that these low income workers pay their dues by the fact they work at low income jobs. Above the minimum, the tax rate would be 50%. The income tax could also be tied to the federal budget, with the minimum taxable income figure for the next tax year being determined by the size of the budget for the current year.

Notes on Economics - Politics, Privatization and De-Regulation

Continuing to exhaust the supply of unused notes, here are a few more:

Chris Mathews points out the middle class American voter goes conservative in a good economy in the belief he will be the next millionaire, but when the economy sours he goes liberal, seeing himself as the next guy in the bread line.

Under Bush, the use of private contractors by the Federal Government doubled. Obama is embarking on a review program to eliminate or tighten up such contracts.

Bush pushed privatization of public highways, taking advantage of cash strapped local governments and allowing the Federal Highway Trust Fund to border on bankruptcy.

From 1995 to 2005, public utility ownership of power plants fell from 90% to 63%, supposedly to stimulate competition and bring down rates, but the rates did not fall. De-regulation did bring lower fares for airlines, resulting in lousy service and multiple bankruptcies. Long distance de-regulation brought lower rates, but competing technologies was also a big factor.

Greenspan, under Clinton, unwisely removed the barriers between investment and commercial banks that had been set up during the Depression.

On better FNMA and FHMC oversight, Chuck Hagel proposed legislation in 2005. A year later, after a critical Federal report, John McCain signed on as a co-sponsor. Democrats favored oversight, but not a provision in the bill that limited the size of the portfolios. Builders and realtors opposed the bill and it did not make it out of the Republican controlled Senate committee considering it.