Democrats Dropping Card Check

Senate Democrats are dropping card check from proposed labor legislation. I noted signs that this might be coming earlier in the year. Support among Democratic voters for this measure was mixed with the Democrats now attracting many professionals who lack traditional Democratic ties to labor. George McGovern, who never got along with organized labor (which helped deliver a landslide victory to Richard Nixon in 1972) has even made an ad opposing the plan.

The major problem with backing card check is that it doesn’t pass the elevator pitch test. If you have difficulty explaining the rational for your policy in the time span of an elevator ride you are in trouble. Some proponents have made arguments as to why card check is not as anti-democratic as it sounds but the elevator ride would be over well before they finish the first half of their explanation. We are going to have enough trouble debunking all the Republican distortions on health care reform and explaining the House bill which is over 1000 pages. Health care reform is worth the effort but I would not devote similar efforts to card check.

The ultimate problem is that we have gone through eight years of a Republican administration which repeatedly attempted to undermine democratic principles. Reestablishing democratic principles is more important than any short term goal. This is not aided by promoting a plan which, whether true or not, gives the appearance of being contrary to the principle of the secret ballot and free elections.

Update: George McGovern’s ad opposing card check:


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  1. 1
    Fritz says:

    Eclectic — a lot of the auto competitors died during the economic contraction of the ’30s.   There is a really neat small auto museum in Cleveland that focuses on the many auto companies that existed in the ’20s in northern Ohio.  They died during the Depression.

  2. 2
    Ron Chusid says:

    “This is why the quasi-Marxist NFL is the most financially viable business in sports.”

    As someone who follows college sports far more than professional I don’t know enough about the topic to argue as to why one sports business is more successful than others. As someone who prefers football over other spectator sports, I do wonder if professional football is more successful because of having IMO the best product.

  3. 3
    Fritz says:

    I was saddened that the NFL banned expansion of the community-ownership model of Green Bay.  I deliberately do not follow pro football any more because I do not want to support a system that allowed Art Modell to remove the Browns from Cleveland.

  4. 4
    b-psycho says:

    Geez, they actually BANNED it?  Any explanation why?

  5. 5
    Fritz says:

    Team owners didn’t like the model — imagine that.

  6. 6
    b-psycho says:

    I meant their public explanation.  I already knew their real one…
    Only sports team owner I respect these days is Mark Cuban.  If only they could’ve all been longtime loyal fans who just happened to get rich enough to buy the team.

  7. 7
    Dan says:

    b-psycho said: July 18th, 2009 at 1:16 pm
    Are you seriously willing to argue that if you’ve been working somewhere for several years, if management comes to you one day saying they want to sharply cut your pay the rational thing to do is say “yes sir!” & take it with a smile?  Even if their own pay is going up at the same time?

    YES! That’s exactly right.  Management is supposed to be making decisions for the good of the company, and when I was in this position, I said exactly that.  I also realized that they were paying me less than the market wage, so I looked for (and found) much higher paying work somewhere else.  Companies don’t set wages, the market does.
    It’s a bad thing for a company when management isn’t in charge.  The rarest resource on the planet is the attention of management and forcing them to constantly fight with a union on what must be done is a constant drain on that resource.  It also means that decisions are NOT being made for the good of the company.

    b-psycho said: July 18th, 2009 at 1:16 pm Really, how does that make sense?  You can’t argue on the basis of sacrificing ones own needs for the long-term good of the company if there’s no intention of sharing the burden.

    There is no such thing as “sharing the burden”.  People are supposed to be making what the market sets their wage at.  Yes, it’s a bad thing when the CEO can set his own wage and he does so at too high level.  But it’s far worse if the union does it because the amount of money is FAR higher.
    A CEO giving himself a 50 Million dollar bonus costs the company 50 Mill for one year.  A union with 100,000 workers giving each worker $50k more than they should costs the company $5 Billion a year, every year.  The sheer scale of the difference means that these are separate issues.

  8. 8
    Dan says:

    Eclectic Radical said: July 18th, 2009 at 1:39 pm Those seeking to blame unions and the overpricing of labor (or corporate taxes, for that matter) for America’s economic decline always fail to address the massive inflation of corporate management pay as corporations have become less and less well managed. Executive pay has increased far beyond the rate of inflation or the increase of the cost of living, and has continued to increase as it becomes increasingly clear the quality of American corporate management is going downhill. Yet most blue collar labor is more poorly paid than ever before and working people are having a hard time scratching out a living… assuming they have jobs.

    First of all, while “wages” have been stagnant, worker “pay” (i.e. wages plus benefits) has gone considerably up.  The increase in worker “pay” has been masked by the sharp increase in medical care and thus the increase in the cost of medical benefits.  And yes, this isn’t a good thing.
    Second of all, it’s not hard to argue that the “market” wage for really good CEOs should be higher than what they are, not lower.  I.e. that they’re under paid, not over paid.  A good CEO means the difference between growing the company, and not growing the company.  Striker is a good example, the company got 20% growth for 20 years under John Brown.
    A 10 Billion dollar company with 10% growth means the company gained a Billion dollars in value.  Presumably like a successful hedge fund, the management team should be getting a small piece of that (hedge’s take like 20%), which still means hundreds of millions of dollars.  This is a winner take all environment and it’s worth it to the shareholders of a Fortune 500 to pay tens (or hundreds) of millions of dollars for a few percentage points of growth.
    The problem isn’t that good CEOs are over paid, the problem is that bad CEOs are over paid (or paid at all).  We’re still trying to figure out how to get that right.  But note none of this has anything to do with worker pay.  Worker pay is (as I pointed out earlier) on a different scale, and it’s also affected by a different set of market forces.

  9. 9
    Fritz says:

    It is true, Dan, that one incompetent CEO, no matter how over-the-top his salary, won’t cost a company (in direct benefits) anywhere near as much as 10,000 slightly-overpaid workers.  But a few incompetent CEO’s tarred and feathered and run out of town on a rail over the last year would have lifted the hearts of millions.

  10. 10
    Christoher Skyi says:

    “Eclectic Radical said: July 18th, 2009 at 1:39 pm Those seeking to blame unions and the overpricing of labor (or corporate taxes, for that matter) for America’s economic decline always fail to address the massive inflation of corporate management pay as corporations have become less and less well managed.”
    Putting aside for a second that this doesn’t at all explain or take the heat off of the role of California’s  public sector and public unions in California’s meltdown,  The Naked Capitalism blog, while not directly addressing so called “CEO overpay,”  weights in on how at least part of the blame for corporate mis-governance in the banking/financial sector can be laid at the feet of mis-regulation:
    Were Risk Models and Bank Regulation Destined to Fail?
    “Avinash D. Persaud gave a speech to the Committee of European Securities Regulators (posted at Willem Buiter’s blog) that argues that banks’ risk models and regulation based on market based pricing were bound to fail. That’s a very bold claim, yet Persaud appears to have the goods.
    If any of you have worked with models, one of basic yet regularly-ignored rules is to understand and respect their assumptions, because they usually constitute a major limitation on their usefulness (the best remedy is to rely on multiple metrics and tools and apply good old fashioned human judgement, but many people prefer to default to the answer that pops out of a spreadsheeet).

    Persaud tells us that an underlying assumption of “market sensitive risk models” is that the user is the only party taking that approach. Now instead of going to Zurich or the Caymans to coin money based on their findings, Harry Markovitz and George Dantzig instead made them public, which should have made them merely interesting. However, the practical implication was that they could be used successfully on a relatively small scale, but once they became common, their success became more and more erratic, as many quants and risk managers have learned to their dismay.”
    See also “The inappropriateness of financial regulation”
    “From VoxEU:
    Financial regulation never works the way it should. Here one of the world’s most experienced analysts of the global financial system presents some remarkably clear thinking on why we should not just do more of the same. An alternative model for policy action is proposed.
    I have had the misfortune or fortune of being up close and personal with seven major financial crises in my banking career, from the US Savings and Loans crisis of the late 1980s to today’s credit crunch. In each crisis I have observed a “cycle” in the response to the crisis. In the middle of a crisis, when circumstances look dire and chunks of the financial system are falling off, proposals get radical. I recall in December 1992, with the UK and Italy having already been ejected from the European Exchange Rate Mechanism and Spain and Portugal looking vulnerable, some European policy makers flirted with capital controls. But a few months after each crisis is over, these radical plans are tidied away and we are left with three things. And they are always the same three things: better disclosure, prudential controls and risk management.
    These measures are the regulatory version of apple pie and ice cream. Who would say no? The thing is – we have been investing heavily in these areas for the past twenty years and do not have much to show for it in terms of financial stability. Over the past eleven years we have had the Asian Financial Crisis, LTCM, the “dotcom bezzle” and now the credit crunch. While more disclosure, controls, and risk management are generally good things and necessary fraud reducing measures, there are few crises I have known from the inside that would not have happened if only there was more disclosure. People knew that sub-prime was a poor risk – it is called sub-prime, after all.”

  11. 11
    Sean says:

    Unions suck. They simply aren’t needed. Maybe for minorities who think they’re being “oppressed” or whatever the hell.

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