Dispatches from a Small Business
Posts tagged ‘unions’
Zero Hedge pointed out this ad for California state bonds:
In light of the recent Stockton bankruptcy, this should carry a warning label: "California reserves the right to repudiate up to 100% of these bonds whenever payment of the interest or principle interferes with paying state employees the maximum possible pension benefits. These bonds are subordinated to any promises made at any time by any politician to state employees unions, past, present, or future."
Matt Welch has a good article here about a self-refuting NPR piece, which was obviously supposed to be a scare story about the loss of Sequestration money but turned out to be an illustration of just how stupid the sequestration panic was. It's funny listening to the podcast of this episode as the NPR hosts desperately try to support the Administration position.
But one thing I thought was funny was this bit illustrating pre-sequester government staffing prioritization:
NPR's David Greene brings on Yvette Aehle, director of the Southwest Georgia Regional Airport in Albany, Georgia, to talk about the terrible danger that passengers will face now that Aehle's airport stands to lose its air traffic controllers:
AEHLE: Well, I don't really want to say anything is less safe. It's just a better opportunity for people to listen and to be heard and to understand where they are. And also, I'd like to point out that we don't have 24-hour tower coverage here currently. Those air traffic controllers are only directing traffic between 8 am to 8 pm seven days a week. And most of our heavy traffic is outside of those hours.
So the government chooses to staff the control tower only half the day. But they choose to staff the tower during the 12 hours of lightest traffic, presumably because the employees wanted day jobs rather than night jobs.
As an aside, I will confess that my business of running public parks benefits from this. The biggest management load on parks is obviously on weekends and in the evenings (in campgrounds). Most employees of public agencies only work weekday days. Its incredibly typical that public parks employees will take their vacations in July and August, by far the busiest months. One advantage (other than the obvious cost advantage) we have over public operations is that public agencies can't or won't ask their employees to work weekends and defer their vacations out of the summer time. We are perfectly happy to hire people with very clear expectations that the job involves work on weekend and holidays.
I will give you my reminder of how to understand most government agencies: Ignore the agency's stated purpose, and assume that it is being operated primarily for the benefit of its employees. One will very often find that this simple heuristic is far better at explaining agency decisions than relying on the agency's mission statement (this does not mean that there are not dedicated individuals in the agency truly, even selflessly, dedicated to the stated mission -- these two notions are not at all mutually exclusive. Government agencies do not act badly because they are full of bad people, they act badly because their incentives cause good people to do stupid things).
One of the charities my family supports is Teach for America. Among other things, we sponsor a local teacher in the program. A bunch of our friends were kind enough to chip in with gifts for the kids in her class and my wife and I delivered them last week at the Phoenix Collegiate Academy, a charter school in South Phoenix for 5-8 graders.
The fun of delivering the presents was reduced later on finding out that at almost that same moment, another group of kids was being killed in Connecticut. But through a strange series of articles that seemed to have used the Sandy Hook massacre as an argument for teacher unionization and against charter schools (yeah, I don't get the connection either), I found out that teachers unions hate Teach for America. Which means that I will likely double my contribution next year.
Postscript: Teach for America began as a senior thesis at Princeton. Its key idea is to make teaching a viable job option, as least for a few years, for top college grads. The program is quite selective, and combines talented highly motivated young people with a proven teaching approach. They then drop these teachers into the public school system, often in classrooms with a high percentage of kids who qualify for school lunch programs (ie low income).
It's clear from the article that teachers union and education establishment types hate these teachers. Since they make a contrast by calling themselves "professionals", the presumed implication is that these young people are unprofessional. Its amazing to me that anyone who has spent even ten minutes in a room with a group of TFA teachers could be so hostile to them. I have met many of them, and they are a consistently amazing bunch who are both smart and genuinely love their kids.
I was skeptical, and still am a bit, of the notion of throwing great teachers into a failing public school system. They clearly help individual kids, which is why I am still behind it, but they do nothing to help the overall system. It's like sending great engineers into Solyndra -- at some level, it seems like a waste (though I am impressed with this particular charter school, which seems to be doing a good job with the limited resources it has -- it gets far less money per pupil than the average public school in Phoenix but does a better job given the demographic of its students).
In Obamacare, it was mandated that health insurance companies spend 85% of premiums on care (vs. marketing, profits, and overhead) or else they owe their customers a refund. So if the same standard was applied to unions, how much of their dues would they have to refund?
For example, according to the most recent federal filings, the Michigan Education Association — the state’s largest labor union — received $122 million and spent $134 million in 2012. They averaged about $800 from each of their 152,000 members.
According to union documents, "representational activities" (money spent on bargaining contracts for members) made up only 11 percent of total spending for the union. Meanwhile, spending on “general overhead” (union administration and employee benefits) comprised of 61 percent of the total spending.
The union appears to have spent nearly the entirety, or $119 million of their $122 million in dues, just supporting their leadership (and various politicians) in grand style. They actually had to borrow $12 million to do their job of representing their members.
By Obama's standard of good management (core activity costs = 85% of total customer dues paid) then the union should have taken only $17.4 million from their members, and owe them a $104.6 million refund.
Apparently Swedish unions are demanding a looser monetary policy
Forget Chuck Schumer's cat-out-of-the-bag 'get back to work' comments to Bernanke, now it is union-leaders who are advising the world's central bankers. "There is a not a single reason not to lower rates" exclaims Sweden's trade union confederation to the central bank as he begins negotiations with employers on wage deals for next year. His demands (for lower rates) are "far from excessive" and he adds "should not cause inflation" as Swedish organized labor have "never called for levels that ... could not be supported economically."
Inflation and monetary debasement have always been Progressive favorites -- until, of course, they were not. Consider the plight of the worker in Weimar Germany
By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.
It was total hell. If a worker's family member could not find something to buy in the morning with the worker's morning pay packet, the money was worthless by dinner time. Not to mention the incredible lost productivity of all those man-hours spent running around trying to find goods on shelves (of which we got a small taste post-Sandy, as people spent hundreds of dollars of their own time waiting in queues because the government would not let gas station owners charge them an extra $20 for scarce gasoline).
Hostess Brands — the maker of iconic brands such as Wonder Bread and Twinkies — is shutting down and firing 18,500 workers after one of its unions refused to end a strike even after being warned it would kill the company.
The privately-held company had reached a deal with the Teamsters, but a smaller union representing bakery workers refused to agree to concessions, prompting the mass layoffs and closing down of hundreds of plants, bakeries and delivery routes. That prompted harsh words from both the company and from Teamsters officials.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement. "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."
I suppose Michelle Obama and Michael Bloomberg are celebrating
I got a lot of email that Republicans aren't libertarians and to stop complaining that they are not. OK. But let's look at their campaign messaging in the context of their own values.
Republicans had a golden opportunity to use the results of a natural experiment over the last four years between red and blue states. Obama constantly harped on the fact that 3.5 million new jobs had been created on his watch. Rather than play dueling statistics or end points in this analysis, the Republicans should have taken advantage of existing red/blue data:
Yes. And the vast majority of these jobs were created in states like Texas which have been successful precisely because they have labor and tax policies which you, Mr. Obama, oppose. And they have been created in industries like Oil and Gas production that you, Mr. Obama, have done your best to hinder. All the jobs you claim to have helped to create were actually facilitated by a philosophy of government you oppose, by regulatory policy you would overturn if you could, and in industries you would prefer did not exist. States like Texas -- with organic growth driven by private capital -- stand in stark contrast to your investments of our taxpayer money in bankrupt companies like Solyndra. If you had had your way, Mr. Obama, few of these jobs would have been created. Yes, this country saw some job creation, but it occurred despite your efforts, not because of them.
Instead of this clear kind of message, we get a bunch of wonky stuff about tax deductions vs. tax rate changes. Heck, even if you told me I had to run my campaign on the single plank of eliminating tax deductions, I could have done a better job. I saw this part of the debate that Romney supposedly won. His explanation was lame. What about this instead:
This country over the past several decades has increasingly become plagued by cronyism. Whether it be Wall Street bankers or public employees unions or casket sellers in Louisiana, everyone wants to try to convert influence with the government into taxpayer money for themselves. We have to end this. And a good place to start is with the tax code. Every special deduction and tax credit in the tax code is a giveaway to some special interest. At best it is a misguided attempt, like the money we wasted in Solyndra, of politicians to try to pick winners and losers, to say that one kind of spending is somehow better than another. At worst, these deductions are a crony giveaway. Sure, it's eliminating these deductions will help reduce the deficit. But even more importantly, eliminating them would be an opening shot in the war to take cronyism and corporatism out of Washington.
In 2010, Arizona v0ters passed proposition 100, a 1% "temporary" sales tax increase that was meant to help fill in the budget hole created by the recession. The tax was only to last 3 years.
It is pretty clear that by the end of 2013, when the tax expires, the rationale for the temporary tax cut will have passed. Already the state's finances are improving and all signs are that by 2014 the economy and real estate market should be greatly recovered.
But, having got taxpayers used to paying the higher tax, supporters of big government and public employees unions have put a proposition on the ballot this year (204) to make the 2010 tax increase permanent. The tax extension will go to a mish-mash of new programs.
This is how the government spending ratchet works. A "temporary" tax increase is justified in a fiscal emergency to fill in a recession-created hole. Government insiders decide they like having more money, and make the tax permanent. The new money is used to create brand new programs. Then, in the next recession, when all these brand new programs are now "essential" and "beyond the reach of even the worst austerity", a new, even higher "temporary" tax increase is necessary.
OK, there are lots of reasons to get Obama out of office. The problem is, that for most of them, I have no reasonable hope that Romney will be any better. Corporatism? CEO as Venture-Capitalist-in-Chief? Indefinite detentions? Lack of Transparency? The Drug War? Obamacare, which was modeled on Romneycare? What are the odds that any of these improve under Romney, and at least under Obama they are not being done by someone who wraps himself in the mantle of small government and free markets, helping to corrupt the public understanding of those terms.
But here is one issue Obama is almost certainly going to be worse: Bail outs of states. States will start seeking Federal bailouts, probably initially in the form of Federal guarantees of their pension obligations, in the next 4 years. I had thought that Obama would be particularly susceptible if California is the first to come begging. But imagine how fast he will whip out our money if it is Illinois at the trough first?
Now that Chicago's children have returned to not learning in school, we can all move on to the next crisis in Illinois public finance: unfunded public pensions. Readers who live in the other 49 states will be pleased to learn that Governor Pat Quinn's 2012 budget proposal already floated the idea of a federal guarantee of its pension debt. Think Germany and eurobonds for Greece, Italy and Spain.
Thank you for sharing, Governor.
Sooner or later, we knew it would come to this since the Democrats who are running Illinois into the ground can't bring themselves to oppose union demands. Illinois now has some $8 billion in current debts outstanding and taxpayers are on the hook for more than $200 billion in unfunded retirement costs for government workers. By some estimates, the system could be the first in the nation to go broke, as early as 2018....
For years, states have engaged in elaborate accounting tricks to improve appearances, including using an unrealistically high 8% "discount" rate to account for future liabilities. To make that fairy tale come true, state pension funds would have to average returns of 8% a year, which even the toothless Government Accounting Standards Board and Moody's have said are unrealistic....
Look no further than the recent Chicago teachers strike. The city is already facing upwards of a $1 billion deficit next year with hundreds of millions of dollars in annual pension costs for retired teachers coming due. But despite the fiscal imperatives, the negotiation didn't even discuss pensions. The final deal gave unions a more than 17% raise over four years, while they keep benefits and pensions that workers in the wealth-creating private economy can only imagine.
As a political matter, public unions are pursuing a version of the GM strategy: Never make a concession at the state level, figuring that if things get really bad the federal government will have no political choice but to bail out the pensions if not the entire state. Mr. Quinn made that official by pointing out in his budget proposal that "significant long-term improvements" in the state pension debt will come from "seeking a federal guarantee of the debt."
I had not paid much attention to the Chicago teacher's strike, except to note that the City basically caved to the unions. The average teacher salary in Chicago, even without benefits, will soon rise to nearly $100,000 a year for just 9 months work. But I am amazed at the statement that no one even bothered to challenge the union on pensions despite the fact that the system is essentially bankrupt. Illinois really seems to be banking on their favorite son bailing them out with our money.
Arizona has always had a pretty intelligent rule that driving schools that have been certified by the state can actually give kids their written and driving tests. They get a certificate they take to the DMV where they then get issued the physical license. Kids who can't afford the school can certainly go into the DMV to take the tests, but since our DMV is swamped with insane waits, it is nice to have an alternative.
Until now. Apparently, for reasons that entirely escape me except perhaps to pander to state employees' unions, all kids must now take their tests, written and driving, at the DMV. So, the DMV's solution to insane waits is to... increase demand on their services. Awesome. Sounds eerily similar to Obamacare's solution to ER waits.
I just wrote three new articles for the Privatization Blog.
The first looks at which types of public decisions should stay public in a privatization effort
The second looks at implementation issues and learning in privatization
The third acknowledges that privatization efforts can fall into cronyism, but points out that generally in these cases the public alternative falls into the same behaviors. A great example is prisons, where privatization is derided by folks like Think Progress for the lobbying the prison companies do both for contracts and harsher laws, but they never acknowledge that public prison unions have demonstrated the same behaviors and for much longer.
Rolling Stone Magazine has an good story on the conviction of a number of banks and brokers on charges of bid-rigging, specifically on contracts for short-to-medium term management of municipal bond cash accounts. Apparently brokers were paid by certain banks to be given a look at all the other bids before they made their final bid. The article focuses mainly on the ability of winning bidders not to bid any higher than necessary, though I would suppose there were also times when, given this peek, the winning bidder actually raised its bid higher than it might have to ace out other bidders.
This is classic government contracting fraud and it's great to see this being rooted out. I am not wildly confident it is going to go away, but any prosecutorial attention is welcome.
But I am left with a few questions:
The latter is not an academic question for me. I run a company that privately operates public recreation areas. I bid on and manage government contracts. Frequently, a major argument used against the expansion of such privatization initiatives is that past government outsourcing and contracting efforts have been characterized by fraud and mismanagement. The argument boils down to "the government has so many management problems that it can't be trusted with contracting for certain services so it needs to operate those services itself."
The only way to reconcile this view is to assume that private actors are more likely to act fraudulently and be dishonest than public employees. If this were true, then the public would be safer if a public management process of questionable ability were applied towards public employees rather than outside private contractors, because those who were being managed would be less likely to take advantage. And certainly there are plenty of folks with deep skepticism of private enterprise that believe this.
However, I would offer that only by adopting an asymmetric view of what constitutes fraud would we get to this conclusion. Clearly, banks colluding to shave a few basis points off municipal asset returns is fraud. As the author of the Rolling Stone piece puts it several times, the crime here is that the public did not get the best market rate. So why is, say, elected officials colluding with public employees unions to artificially raise wages, benefits, and staffing levels above market rates not fraud as well? In both cases insiders are manipulating the government's procurement and political processes to pay more than the market rates for certain services.
This is Bastiat's "seen and unseen" of the privatization debate. Yes, the world is unfortunately littered with examples of government procurement fraud. This is often cited as a reason for maintaining the status quo of continued government management of a diverse range of services. But what we miss, what is unseen, is that these government services are often run with staffing levels, work rules, productivity expectations, and pay rates that would constitute a scandal if uncovered in a division of a corporation, particularly if the workers were spending a lot of money to make sure the manager handing them this largess was able to keep his job.
Yes, the public lost several basis points on its investments when it did not get the market rate of return from cheating bankers. But it loses as much as 50% of every tax dollar sent to many state agencies because it does not get market rates (and practices) for state labor.
The Indiana union's lawyers contend that the right-to-work law interferes with the union's free speech rights by stifling the collection of money that helps pay for its political speech.
"In this case, the state of Indiana restricted a channel of speech-supporting finance," the union brief maintains. "The Union legitimately utilizes dues money collected through the agency shop provisions in its collective bargaining agreements, in part, to finance political speech The Indiana Right to Work law prohibits agency shop agreements, and that prohibition restricts a channel through which speech-supporting finance might flow."
When a country
The bitterly ironic part is that when these folks hit the streets in mass protests, it will likely be for more of the same that put them there in the first place.
Want to argue that such policies are hurting workers rather than helping? Good luck, at least in Italy
Pietro Ichino, a professor of labor law at the University of Milan and a senator in the Italian legislature, is known as the author of several “neoliberal” books and studies recommending that the Italian government relax its extraordinarily stringent regulation of employers’ hiring and firing decisions. As Bloomberg Business Week reports, that means that Prof. Ichino must fear for his life: “For the past 10 years, the academic and parliamentarian has lived under armed escort, traveling exclusively by armored car, and almost never without the company of two plainclothes policemen. The protection is provided by the Italian government, which has reason to believe that people want to murder Ichino for his views.”
Memo to US: Don't get cocky, you are going down the same path
Update: Interesting and sort of related from Megan McArdle
An apparent paradox that frequently puzzles journalists is that Europeans work fewer hours than workers in the United States, while in some countries, hourly productivity appears to be the same, or even higher, than that of American workers.
This is not actually a paradox at all. Much of the decline in European hours worked per-capita came in the form of unemployment. Rigid labor laws which make it hard to fire (and thus, risky to hire) shut less productive workers out of the market, particularly the young, and those who had been displaced due to disruptive industry change. So does anything that raises the cost of labor, like, er, loads of mandatory vacation and leave. When you exclude your least productive workers from the labor force, your measured hourly productivity will be higher, particularly if you use metrics like GDP per hours worked.
I have always defended private unions on the ground that workers have a freedom of association just as much as anyone else. I think the government has tilted the playing field in the union's favor too much, but I will leave that aside for today. I will also leave aside the problem of public unions, where there is no one really representing the taxpayer on the other side of the table in negotiations (many politicians in union states owe their jobs to union support).
Leave all of that aside. The economic problem with unions tends to be that they are such a conservative (little c) force in an economy that needs dynamism to grow and expand wealth. Here is a great example:
The University of California last week tentatively agreed to a deal with UC-AFT that included a new provision barring the system and its campuses from creating online courses or programs that would result in “a change to a term or condition of employment” of any lecturer without first dealing with the union.
Bob Samuels, the president of the union, says this effectively gives the union veto power over any online initiative that might endangers the jobs or work lives of its members. “We feel that we could stop almost any online program through this contract,” Samuels told Inside Higher Ed.
I have said for a long time that negotiations for pay and benefits (in private unions) tend to be the least problematic union activity (different story in public unions, where the relationship to management is not adversarial). Longer term, union imposed work rules and restrictions tend to be much more costly. The reason I think is that corporate executives can easily value the difference between various pay and benefits packages, but have a hard time valuing flexibility and dynamism. If union rules cut off potential future as-yet-unknown growth and cost reduction efforts, the cost of these rules can be huge but equally they can be almost impossible to value (more like options pricing than straight cost-benefit).
From the Goldwater Institute, on the amount of money we in Phoenix are paying in taxes to support union management costs
Phoenix taxpayers spend millions of dollars to pay full salary and benefits for city employees to work exclusively for labor unions, a Goldwater Institute investigation found.
Collective bargaining agreements with seven labor organizations require the city to pay union officers and provide members with thousands of additional hours to conduct union business instead of doing their government jobs.
The total cost to Phoenix taxpayers is about $3.7 million per year, based on payroll records supplied by the city. In all, more than 73,000 hours of annual release time for city workers to conduct union business at taxpayers’ expense are permitted in the agreements.
The top officials in all of the unions have regular jobs with the city. But buried in the labor agreements are a series of provisions for those employees to be released from their regular duties to perform union work.
For top officers, the typical amount of annual release time is 2,080 hours, a full year of work based on 52 weeks at 40 hours each. They continue to draw full pay and benefits, just as if they were showing up for their regular jobs. But they are released from their regular duties to conduct undefined union business.
Union officials say the time is a good investment that leads to a more productive workforce. Critics say it amounts to an illegal gift of taxpayer money.
The "more productive workforce" line is just hilarious. 99.9% of the this work very likely is against the best interests of taxpayers, either raising future salaries or enforcing productivity-killing work rules or preventing the termination of incompetent employees.
I understand that there are similar provisions in some private union contracts, but if I was a shareholder in these companies I would be outraged about those as well. As it turns out, private companies that have these deals tend to be among the most dysfunctional and uncompetitive in the country (e.g. GM).
What's particularly ugly about this is that it is so reminiscent of a number of Soprano's episodes, with the mafia guys all sitting around in no-work and no-show jobs at taxpayer expense.
Via the anti-Planner, comes this amazing slide from a presentation by the city of Omaha on their new initiative for "Livable Transportation" (ppt presentation). Ray LaHood recently asked that all transportation authorities include "livability" in the next round of their 5-year transportation plans.
What does "Livability" even mean? Well, I was not sure. This is one of those vague happy-sounding words that give liberals a hard-on in the context of government programs but generally just end up being an excuse for the exercise of state power at the expense of individual choice.
But in this case we don't have to guess, because in the presentation linked above we have the following as the first slide in the presentation, defining livability in this context:
I kid you not -- the two key steps in livable transportation are apparently increasing delay in auto commutes and increasing the cost of auto commutes. Wow, that certainly sounds like something that will make my life better (on the bright side, it strikes me as a goal that the generally-incompetent government can actually achieve).
Of course, the issue is not really about livability, but about the imposition of a few intellectuals' disdain for cars on the rest of us.
And if you want to look for the financial incentives, the size of government per passenger-mile of commute is maximized with rail mass transit. First, this is because rail is simply more expensive than driving -- way more expensive - - per passenger mile in any Western city like Omaha, even when all the costs of driving are considered. Second, with rail, the government nationalizes things like driving and maintenance that you do yourself or are done by private actors, and brings them in-house to be performed by powerful government unions.
Postscript: Left unsaid in any of this presentation is how increasing commute delay leads to keeping jobs and businesses in the lower left. That strikes me as a non sequitur of epic proportions.
One might think a line like about Greek finances was printed just this week
What followed could only be described as a comic progression of populist pandering [and] the spread to the national economy of a series of parasitic labor unions and cabals
But in fact it is describing Greek conditions circa 1944.
A while back I observed that the difference between Greek and US finances is that the US needs to return to a spending level circa 2007, while Greece has no similar default state of relative fiscal sanity it can return to. This article in Finem Respice reinforces this premise by discussing the absolute insanity of Greek fiscal management before and after and even during WWII, which was characterized by all the exact same problems that have driven the current crisis. Good background reading.
Greece, then as now, was dominated by an expensive public sector funded insufficiently by a tax system that did not work. As may happen soon, Greece was not able to borrow, so all they could do was print money and inflation soared. Only one man was able to stop the inflation, and I won't spoil the ending by the humorous way he did so.
This was a pretty amazing article on cost savings experienced already by one school district in Wisconsin after the collective bargaining agreement with government unions was voided.
Of course, there have already been substantial cost-savings as more sane work rules have been put in place and employees have to pay a larger (but still trivial) share of their pension and health care premiums.
But I thought this bit of self-dealing by the unions was pretty amazing and is the type of thing that did not make the news back in the whole Wisconsin brouhaha
"The monetary part of it is not the entire issue," says Arnoldussen, a political independent who won a spot on the board in a nonpartisan election. Indeed, some of the most important improvements in Kaukauna's outlook are because of the new limits on collective bargaining.
In the past, Kaukauna's agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust -- a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.
Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, 'We can match the lowest bid,'" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.
This strikes me as an amazing example of self-dealing. The union requires that their health care insurer get a monopoly, and then extract monopoly rents from the relationship. You can be sure the union rank and file never saw a dime of these health care profits, which likely flowed to just a few union leaders plus the politicians who helped make it possible.
Standard disclaimer: I have no particular beef with unions per se, whose ability to organize workers is protected under the First Amendment's right to assembly. My problems related to unions are
Allowing this kind of hell to exist has got to be one of the worst systematic civil rights violations that still exist in this country
The U.S. Department of Justice recently released its first-ever estimate of the number of inmates who are sexually abused in America each year. According to the department’s data, which are based on nationwide surveys of prison and jail inmates as well as young people in juvenile detention centers, at least 216,600 inmates were victimized in 2008 alone. Contrary to popular belief, most of the perpetrators were not other prisoners but staff members—corrections officials whose job it is to keep inmates safe. On average, each victim was abused between three and five times over the course of the year. The vast majority were too fearful of reprisals to seek help or file a formal complaint.
Just to calibrate, the total number of sexual assaults reported outside of prisons in the US is something like 190,000 a year.
Sexual violence is not an inevitable part of prison life. On the contrary, it is highly preventable. Corrections officials who are committed to running safe facilities train their staff thoroughly. They make sure that inmates who are especially vulnerable to abuse—such as small, mentally ill, and gay or transgender detainees—are not housed with likely perpetrators. And they hold those who commit sexual assaults accountable, even if they are colleagues.
But many corrections administrators are reluctant to make sexual abuse prevention a top priority, preferring to maintain the status quo rather than acknowledge the role their own employees play. Others are actually fighting reform efforts, claiming, in spite of the evidence, that sexual violence is rare.
This resistance is reflected in the slow implementation of the Prison Rape Elimination Act, which Congress unanimously passed in 2003. The law mandated binding national standards to help end sexual abuse in detention. But almost eight years later, the Justice Department has yet to promulgate final standards.
Take California for example, where the prison guard union is among the most powerful in the country. Given how far in the tank legislators in that state are for their public unions, it is hugely unlikely this will get addressed any time soon
Several times in the past I have posited that folks in power simply hate buses. How else to explain light rail and high speed rail projects that are both substantially more expensive and substantially less flexible than buses. Some of the reasons for this include:
In Phoenix, light rail requires a subsidy of $3.82 center per mile (that is the government spending above and beyond the fare), which is nearly 10x what we spend on buses. And light rail uses more energy per passenger mile here than driving.
Anyway, this story from Iowa seems to support my point -- the government is proposing to spend tens of millions of dollars to create a rail service that is slower and more costly than existing private bus service.
The latest in lunacy in high-speed rail lunacy: at Joel Kotkin’s newgeography.com Wendell Cox reports that the U.S. Transportation Department is dangling money before the government of Iowa seeking matching funds from the state for a high-speed rail line from Iowa City to Chicago. The “high-speed” trains would average 45 miles per hour and take five hours to reach Chicago from Iowa City. One might wonder how big the market for this service is, since Iowa City and Johnson County have only 130,882 people; add in adjoining Linn County (Cedar Rapids) and you’re only up to 342,108—not really enough, one would think, to supply enough riders to cover operating costs much less construction costs.
Oh, one other thing. Cox reports that there is already luxury bus service, with plus for laptops and wireless Internet, from Iowa City to Chicago. It’s part of a larger trend for private companies to offer convenient and inexpensive bus service. A one-way ticket on the bus costs $18, compared to a likely train fare of more than $50. And the bus takes only three hours and 50 minutes to get from Iowa City to Chicago. That’s one hour and 10 minutes faster than the “high-speed” train.
Don Boudreaux had these two rejoinders to the notion that the GM bailout is a success simply because GM is making a profit.
Economically literate opponents of the Detroit bailout never denied that pumping hundreds of millions of taxpayer dollars into Detroit automakers would restore those companies to health. Instead, they argued, first, that bailing out Detroit takes resources from other valuable uses. Because he doesn’t even recognize that other valuable uses were sacrificed by this bailout, Mr. Dionne offers no reason to think that the value of saving Detroit automakers exceeds the value of what was sacrificed to do so. No legitimate declaration that the bailout is successful is possible, however, without evidence that the value of what was saved exceeds the value of what was sacrificed.
Economically literate bailout opponents argued also that it sets a bad precedent. By signaling to big corporations that government stands ready to pay the tab for the consequences of their poor decisions, big corporations will more likely make poor decisions in the future. It’s far too early for Mr. Dionne to conclude that this prediction is mistaken.
I would offer a third concern -- that the government has kept hundreds of thousands of skilled workers and billions of dollars of physical assets under the management of the same group that have decidedly underutilized these assets in the past. A bankruptcy without Federal intervention would likely have shifted assets and skilled workers into new companies with different management teams and cultures pursuing different strategies with different information.
I always have trouble explaining this issue to people. Think of a sports team with great players but a lousy coach and management team. Having the government ensure that the lousy management stays in control of the great players is a waste for everyone. I explained it more in depth in this post, where I concluded
A corporation has physical plant (like factories) and workers of various skill levels who have productive potential. These physical and human assets are overlaid with what we generally shortcut as "management" but which includes not just the actual humans currently managing the company but the organization approach, the culture, the management processes, its systems, the traditions, its contracts, its unions, the intellectual property, etc. etc. In fact, by calling all this summed together "management", we falsely create the impression that it can easily be changed out, by firing the overpaid bums and getting new smarter guys. This is not the case – Just ask Ross Perot. You could fire the top 20 guys at GM and replace them all with the consensus all-brilliant team and I still am not sure they could fix it.
All these management factors, from the managers themselves to process to history to culture could better be called the corporate DNA...
So what if GM dies? Letting the GM’s of the world die is one of the best possible things we can do for our economy and the wealth of our nation. Assuming GM’s DNA has a less than one multiplier, then releasing GM’s assets from GM’s control actually increases value. Talented engineers, after some admittedly painful personal dislocation, find jobs designing things people want and value. Their output has more value, which in the long run helps everyone, including themselves.
The alternative to not letting GM die is, well, Europe (and Japan). A LOT of Europe’s productive assets are locked up in a few very large corporations with close ties to the state which are not allowed to fail, which are subsidized, protected from competition, etc. In conjunction with European laws that limit labor mobility, protecting corporate dinosaurs has locked all of Europe’s most productive human and physical assets into organizations with DNA multipliers less than one.
I have argued for a long time that the shift of city transit departments from buses to a love affair with light rail has been a disaster. Rail is so much more expensive per passenger mile, and so inflexible, that it generally forces a shrinkage in the total number of riders at the same time that budgets explode (example article here).
There are a lot of explanations for this phenomenon. Part of it is incentives - heads of agencies with rail get paid more than bus-only agencies, and unions love the higher-paying rail jobs that never go away (part of the flexibility issues with rail). Part of the explanation is cultural - rail is now hip and edgy and allegedly green and modern. Buses are so last century.
And part of it is social/racial. White upper middle class yuppies wouldn't be caught dead on buses. They like trains better, particularly when they are successful in running rail routes through middle class commuting routes. If the cost of this forces cut backs on buses that run where the poor need to go, oh well.
So, I ask you, what city in America is most famous as a model for urban planning and light rail? Portland. So it is interesting to see what effect this planning and transit strategy has had on the population. I have already written here before that Portland bus service has been gutted in favor of rail, such that total ridership in the city has dropped despite spending a lot more transit dollars. These maps from the Portland Oregonian show another effect -- shifting transit dollars to modes favored by rich white people has... caused Portland to be increasingly white. What a surprise. Via the anti-Planner
Arizona police officers accused of misconduct will soon have more protection.
Gov. Jan Brewer has signed six bills, backed by police unions, that spell out procedures for internal investigations.
Great, because it was not already hard enough to take action against bad cops in a system where all the insiders - police and prosecutors - generally close ranks to defend them from scrutiny.
The new laws are not all bad -- at least one gives protections to internal whistle-blowers, something that is needed in a police culture that has an effective law of omerta against cops who call out other cops for bad behavior. My guess, though, is that this rule will be used by unions who want to harass police management, rather than to protect street cops who testify against other street cops.
Defenders of the law said
Police unions weren't asking for anything more than the due process an arrested citizen receives, said Larry A. Lopez, president of the Arizona Conference of Police and Sheriffs.
"Just because we wear uniforms, we're not relegated to a watered-down version of constitutional rights," said Lopez, a Tucson officer.
I have said a number of times that this is not quite true. Police are given powers to use force against other citizens that the rest of us do not possess. This necessitates a kind of scrutiny and oversight by the state that would not be appropriate or legal for the average citizen. For example, police simply do not have the privacy rights in conducting their jobs that the rest of us do. We have seen too many times that when we give police broad discretion, special powers, and no oversight (or even a nudge and a wink guarantee against oversight), bad things inevitably happen.
If you are confused about what I am talking about, go read Radley Balko's archives.
So the Republicans in Wisconsin eliminated collective bargaining for public unions except on wages. The Democratic Secretary of State, fully within the law, is delaying making the law official for 10 days. This 10 days is giving us a great picture of the problem with public unions.
Why? Because the 10 days was explicitly to allow cities and counties to cut new deals with unions, since all deals before the law is passed are grandfathered. The fact that many city and county governments are rushing to take advantage of this window just proves that public collective bargaining is broken -- no one is looking after the taxpayers. I have argued that public unions are basically on the same side of the table with governments in bargaining sessions. What could be better proof? If government officials really cared about the taxpayer or their fiduciary responsibility, why in the world would they be rushing to cut above-market deals with government employees when they won't have to do so in just 10 days? Government officials are colluding with unions to race to transfer more wealth from taxpayers to workers before the window for such subsidies shuts.
