Kausfiles: A mostly political weblog.

kf Parties for You!

Matt Yglesias defends his manhood! His site wasn't hijacked by Jennifer Palmieri! Rather, he assumed her proposed blog post

"represented her putting her foot down, so I kind of didn't say anything more about it, and just stuck if up there ...."

Hmm. Does that make it any better? ... P.S.: The point is that until recently Yglesias had a nice perch at the Atlantic, where nobody was going to put their foot down simply because he offended a Democratic interest group. But he opted for the joys of cocooning "community," so now when a ranking politico like Palmieri puts her foot down, he rolls over.  ... 4:39 P.M.

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Card Check Slow Track Watch: Labor strategists deny (to Mark Ambinder) that Obama's remarks to WaPo constitute a slow-tracking of "card check." And I know that some business groups still think there's no slow-tracking of "card check" (if it's not in fact already a done deal).  So let's assume there's no slow-tracking of card check! ... But it sure sounds to me like the only bill Obama expects to pass soon would be a compromise (for example, retaining the secret ballot but speeding up various time limits or altering other provisions in ways that would still aid unionization drives). ... If you were Obama and you wanted to slow-track "card check," or force a "reform" compromise that feel short of eliminating the secret ballot, you would tell the Post what Obama told the Post, no? If you were a labor strategist and you were worried that Obama was slow-tracking card check, you wouldn't tell that to Ambinder. You'd tell him that there was "every reason to believe" that Obama would keep his "committment," in order to keep the heat on. ... Update: Anti-card checker Peter Kirsanow is still worried. "Unions understand that the planets won't align for them like this again. ... They won't back down." True. But that's also a reason to discount the bravado they show to Ambinder. They're not going to give up this early and say, "Gee, looks like 'card check's' not going to happen.' ... Not that they might not ultimately win. [via Shopfloor] ... See also Rubin. ...

P.S.: Obama's framework is admirably clear. (It's not mine!)

"[I]f the business community's argument against the Employee Free Choice Act is simply that it will make it easier for people to join unions and we think that is damaging to the economy then they probably won't get too far with me."

Of course, the issue isn't only whether it will get far with Obama, important as that is. It's also how far it gets with 41 senators. ... 

P.P.S.: Obama says

Here's my basic principle: that wages and incomes have flatlined over the last decade.  That part of that has to do with forces that are beyond everybody's control: globalization, technology and so forth.  Part of it has to do with workers have very little leverage and that larger and larger shares of our productivity go to the top and not to the middle or the bottom.  I think unions serve an important role in that.

The obvious initial question is whether, in a more fully unionized economy, the net productivity gains would be there to be "leveraged" down. Not a lot of gains being leveraged to UAW members these days. ... 2:59 P.M.

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"You Call This a Downturn?" Well, it depends if that ugly red line keeps going in the direction it's going, no? ... P.S.: Keep in mind, the line measures how much employment has fallen versus all other recessions after x number of months. So the current recession started mild, but is now somewhere between "medium" and "harsh." Trending "harsh." ... 11:45 P.M.

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Thursday, January 15, 2009

'We Had a Hat': UAW workers rally against wage concessions to GM in Michigan. ... Old Rules: You demanded higher wages and held rallies against your employer. ... New Rules: You demand higher wages, help drive your employer into bankruptcy, and then you hold rallies against the government that bailed you out. ... P.S.: Shouldn't the mayor of Warren, Michigan be more worried about preventing GM from disappearing, taking all its jobs, than preventing a 10% or 20% pay cut? ... P.P.S.: I just took a 10% pay cut! Do you see me protesting? No! But I'm going to milk it for all its worth. ...  P.P.P.S.: I see a parallel to the counterproductive Gran Marcha: A few more rallies like this and GM won't see another dime from Congress. ... [via Brian Faughnan]10:19 P.M.

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Andy Levy turns today's airplane heroism into a pitch to America's Last Employer. ... [via Insta] 9:47 P.M.

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“I know as much or more than Cheney." Mr. Biden said. "I’m the most experienced vice president since anybody.” Wow. a) Biden has no private sector experience after age 30, right? b) How insecure is this guy? Getting close to dangerously insecure, no? ... And here we we'd just succeeded in explaining away the "I have a much higher IQ than you do" aria of credentialist braggadocio. ...   9:45 P.M.

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Inaugural Schmoozalism: kf discovers that the mood in Washington among veteran Beltway Dems is a lot more skeptical of Tim Geithner's innocence regarding his tax errors than public reaction by offical Dems (or some GOPs) would lead you to expect. Maguire would feel right at home. ... 9:32  P.M.

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We Want Vetoes!

UAW President Gettelfinger pisses on Steven Rattner's possible selection as "Car Czar." Has the union been rummaging around in NEXIS? ... P.S.: But then he'll have to go back to writing for Portfolio and losing money on Maxim. After all those contributions!. ... He still has my full support. ... P.P.S.: You'd expect to see this revealing controversy fully covered in the pages of the New York Times, right? Even though Rattner is the NYT publisher's friend, right? ... Hello? ... Correction: The NYT's oddly formal, bland, unbylined Tuesday story (which I missed) is here. If it wasn't written under special Pravda-esque constraints, it does a good job of seeming that way. ... Update: The NYT story was actually printed (at the bottom of page B3) in Wednesday's paper, which means there was plenty of time to have included the Gettelfinger comments, which seem kind of relevant. ...  It's asking too much to expect Pinch's paper to mention, in its potted bio of Rattner, his recent business setbacks. According to the Wall Street Journal, Rattner's firm, Qadrangle, "has struggled as of late. Quadrangle closed down a poorly performing hedge fund late last year ...." ... Update: The Big Money goes where the NYT fears to tread. 11:10 P.M.

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Uh-oh: General Motors' talks with the UAW over bankruptcy-avoiding wage and work rule concessions have barely begun and already GM CEO Rick Wagoner is talking about asking for more bailout money from Congress, even after the alleged March "deadline."  Getting billions more from the taxpayers is something the union and management can agree on! If Obama actually wants them to come up with a cost-cutting deal ... well, it's never too early for a second veto threat. ... P.S.:  He'll need to control his own party, yet again:

A Democratic bill circulated last week included provisions that could alter the terms of the loan and ease the requirements on the union to lower labor costs. (WSJ)

None dare call it triangulation. ... 10:57 P.M.

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Sen. Voinovich won't seek reelection. So how are labor unions going to scare him into supporting "card check" with the threat of campaigning against him? Just asking! ... 10:46 P.M.

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Early Veto is Like Yeast: "I don't think that's the way you start out a presidency," said Sen. Jay Rockefeller, D-W.Va, speaking of the possibility that newly-sworn President Obama would veto a Congressional resolution disapproving the second $350 billion bailout. Why not? A veto seems like a terrific way for Obama to start out his presidency, by showing Congressional Democrats that he won't be pushed around. Legislators will always claim that vetoes are negative "optics"--conflict!--because vetoes are what constrain them. They'd rather have their bloated budgets and other deals sail into law on a wave of backslapping Washington comity. George W. Bush didn't veto anything in his first five years in office--is his success at controlling his own party's Congressional majority's excess something Obama wants to emulate? ... The only veto Obama should be worried about is a veto that would be overridden, but that is said to be highly unlikely in this case. ... 10:40 P.M.

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Kevin Drum argues a tight labor market isn't an alternative to "greater unionization" when it comes to increasing wages at the bottom of the distribution, saying I've

never explained just how we're going to get to this paradise of perpetual high economic growth and tight labor markets — even though there's a Nobel prize waiting for him if he does. The dotcom bubble managed to accomplish it for three or four years out of the last 30, but that's about it. So until I hear the plan, I'll stick with my support for unions, flawed though they may be.

 And Drum has a plan for "low-end wage growth" that doesn't involve restoring the economy? Good luck with that. There's a double Nobel waiting for him, I guess. A triple Nobel if he can boost wages at the bottom while simultaneously letting in millions of unskilled low-wage immigrants. ... P.S.: Drum seems to be explicitly embracing "pie-slicing"--redistributing shares of a non-growing economy--as an alternative to "pie enlargement." Nothing, at first glance, so terribly wrong with that. But can Drum point to a period in modern American history when low-end wages grew without an expanding economy? At least I've got the '90s (and the 60s). ... My crude default view: If we have robust economic growth, we don't need greater unionization to boost low-end wages. If we don't have economic growth, then greater unionization isn't going to do much to boost low-end wages by itself. And greater unionization will actually make economic growth less likely.**

**--Why? Because the litigious, adversarial, cumbersome everything-must-be-negotiated culture and structure of American unionism is incompatible with the flexible, rapidly changing workplace required to be globally competitive in the twenty-first century! (E.g., compare Toyota's production system with Detroit's model.) That's one reason why. ... Also, greater union power (at least until you get to near-universal unionization) promotes the wage-price spiral, requiring depressive Fed action to tame inflation. That's another reason. ... 10:04 P.M.

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Fight or flight for the GOP on Davis-Bacon?

In mid-death throes, Chrysler actually shows a good-looking car at the Detroit Auto Show. ... Model designation: 2L-8 GT. ... 12:12 A.M.

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Monday, January 12, 2009

An idea so crazy it just might be crazy! Facing an economic slowdown, possible deflation, declining readership and competition that gives away its product for free, the Los Angeles Times raises newsstand prices 50%. ....Update: Alert reader B emails, "It's even crazier than you say.  It's not just the "competition that gives away its product for free" -- the Times gives itself away for free." ... 12:42 P.M.

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Does the GOP Congressional leadership dare launch a fight over whether Davis-Bacon style wage schedules, beloved by organized labor, apply to various projects that use Obama's stimulus funds? They'd almost certainly lose (as they did when the issue came up in the context of Katrina relief), but that wouldn't be the point. The point would be to take a stand that would a) ventilate the arguments against Davis Bacon; b) highlight Obama's dependence on Big Labor; and c) deter Obama from moving very far in the direction of non-market, bureaucratic determination of wages (through mandatory arbitration under the "card check" bill, direct setting wage scales by the federal government under Davis-Bacon, and eventually, maybe, court-imposed wage-rejiggering to eliminate male/female disparities under the doctrine of "comparable worth").

In a bad recession, why shouldn't we use the government to boost wages above market levels (which is what conservatives say the Davis-Bacon schedules in fact do)? It's not just that,  if the Davis-Bacon wage is higher than the market wage, lower wages mean you can employ more people and get more done. The incoming Obama team should actually want wages on stimulus projects to be a little below normal market wages, in order to nudge people to move into regular, non-stimulus private and public projects as the economy recovers, no? That was FDR's policy for the WPA, though he had to break a strike to get it. ... 1:24 A.M.

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The opposite of Pyrrhic

Friday, January 9, 2008

OK, "Caterpillar" didn't make it. (No legs!) But give "Mr. Aflatoxin" time. The left is on the same side as kf on that one. ... 11:50 P.M.

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The kf Curse! It turns out that alleged CarCzar Designee Steven Rattner, endorsed in this space yesterday, has a large and embarrassing** conflict of interest.  NY Post covers. ... More suprisingly, the New York Times picks up on the Post's sniping at Pinch Sulzberger's BFF.  But only online (as far as I can see). Rattner's ... special status seems to continue in the print edition (although I won't know for sure until tomorrow)...

**--[Embarrassing?--ed He bought Blender!] According to the NY Post:

Cerberus [which owns Chrysler] recently notified Rattner and his group that they're in technical default of terms to repay a $125 million loan that he used to bankroll his $250 million purchase, two years ago, of sexy lad magazine Maxim and pop-music magazine Blender. 

Guy who can't run Maxim wants to run GM!  But he still wrote a great union-bashing article. ...11:25 P.M.

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Thrown into the Burris patch: What makes everyone so sure that Majority Leader Harry Reid was "beaten" and "outfoxed" in the matter of Roland Burris? He was beaten and outfoxed into having one more Democratic senator than he was counting on having.  A few more of these beatings and he'll pass card check with 5 votes to spare. ... 10:00 P.M.

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Pinch's Buddy for Car Czar!

Thursday, January 8, 2009. 

I'm a skeptic when it comes to the genius of reporter-turned-banker and Pinch-buddy Steven Rattner. But he might make a good Car Czar, a position for which he's rumored to be the leading candidate. Why? Rattner covered the decline of the British auto industry for the NYT in the 1980s, and in the process wrote one of the best newspaper pieces ever published about autoworker unions [$]. Rattner compared the production of Ford Escorts at a German car plant with the production of the exact same vehicle at a U.K. plant. The German plant [in Saarlouis] was roughly twice as productive. The difference? An adversarial, work-rule-oriented union culture in Britain. Some excerpts:

But the resemblance ends at physical appearance. This [German] plant produces some 1,200 cars a day, more than the 1,015 that Ford planners had anticipated, and requires 7,762 workers. Its counterpart at Halewood, with virtually identical equipment and production targets, has averaged only about 800 cars a day this year, and 10,040 workers have been needed to achieve even that production level.

''Our standards say it should take something like 20 man-hours of labor in both the body and assembly plants to make an Escort,'' said Bill Hayden, vice president of manufacturing for Ford Europe Inc., in an interview. ''At Saarlouis, they do it with 21 hours. At Halewood it takes 40 hours.'' ...[snip]

Aside from statistics, subjective differences between the two factories become evident. Halewood seems to overflow with workers - some of them reading or eating, others kicking a soccer ball - while Saarlouis seems almost depopulated and nearly every worker in evidence is hard at his job. At Saarlouis, workers dash to open doors for visitors touring in electric carts, while at Halewood, one worker greeted a news photographer by exposing himself. ...[snip]

For their part, the workers at Halewood maintained in recent interviews that shop conditions at Saarlouis were unsafe. ''If that was in England, I'd stop the job immediately,'' said Stephen Broadhead, the ''convenor'' at the body plant, who has visited the German plant twice. ''It was such a violation of our health and safety regulations we couldn't live with it.'' Nonetheless, the Saarlouis plant has the lowest injury record in Ford's entire Europe subsidiary.

In one example mentioned by Mr. Broadhead, the Halewood union summoned a company doctor to rule that two men were required to lift the car hood onto the body, a job performed by one man at Saarlouis. But the other day at Halewood, only one man was lifting the hoods; the second man watched.

''From the very beginning it was always one man who picked up the hood, said Lothar Kotalla, a German worker here, as the dull silver car bodies moved along behind him, 58 an hour. ''It's heavy so we switch every hour.''

Such differences are found to pervade the two plants. In May, the workers at Halewood went on strike for 11 days because they contended that four men could not produce 60.2 transaxle assemblies an hour, as the company and the German experience suggested they could. Five months later, the four men are still assembling about 55 an hour. ...[snip] 

Management's efforts are now concentrated on raising productivity, a painstaking process of identifying a bottleneck - at the moment, the assignment of workers and work in the paint shop - and negotiating at length with the unions to remove it. With various shop rules, moving one worker, part of a process known as ''rebalancing,'' often requires that five be shifted.

Does the U.A.W. read Times back issues? ... 2:54 P.M.

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Will Obama Ever Stop Asking Me For Money?

Bill Clinton in the Oval Office: "I just love that rug." I wonder if that means the same thing as "nice tie"? ... 12:46 P.M.

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Old lists never die: Will Obama ever stop asking me for money? Or is it all fundraising, all the way out? Here's an excerpt from an email I got recently:

 From: Obama tor America....

Subject: Join us at the Inauguration

Friend: ...

You helped shape history, and now you can be a part of it.

Ten supporters and their guests will be selected to come to Washington, D.C. for several days of inaugural events. You could be chosen to fly to Washington, attend the welcome ceremony, the Inaugural parade, the swearing-in, and an official Inaugural ball.

Donate $5 or more now. You could be part of the historic events you made possible.

Not only is he still milking his supporters for money, he's doing it in an obnoxious way, no? "Join us at the inauguration" turns out to mean "pay for other people to party at the inauguration you're not going to"!  (Even The Atlantic didn't think of that one.) As if Obama's campaign thinks his supporters are not only suckers, but a particular type of sucker--the type of sucker who contributes because of the tiny chance of striking it rich. ... It's like a crude old-left parody of capitalist ideology (except in capitalism there's a middle class, not just a few winners and millions of gullible chumps). ...

Update: Ambinder agrees, then makes the mistake of listening to the other side. ... 2:15 A.M.

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I submit that if the best evidence of Obama's subservience to the Dem "left" is his appointment of ... Leon Panetta, there's not yet much reason to worry about Obama's subservience to the left. ... 1:37 A.M.

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The Failure Faster Thesis

Wednesday, January 7, 2009

Now Obama's gone and pissed off Slashdot. ... 2:15 A.M.

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Liberal Media Bias: Occasional Slate contributor Tom Geoghegan is running for Rahm Emanuel's congressional seat. He's a friend of mine, a terrific writer and a man of honor. I'm for him even though I'm sure he's for card check. ... P.S.: You can't call Geoghegan unthinkingly left.  In 1972, he wrote a justly famous analysis of the McGovern rebellion in the Democratic Party and its relationship with the student left--still one of the best pieces on the nervous breakdown of post-WWII liberalsim I've ever read. It's online. ... 1:28 A.M.

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After giving in to a lazy inconclusive lede on whether Richardson's withdrawal might or might not hurt Obama's Southwest strategy (Answer: It might or might not!) NYT's Adam Nagourney finally gets around to asking the obvious key question:

[W]hether the Obama administration’s eagerness to get Mr. Richardson into the Obama cabinet might have contributed to what appeared to be an uncharacteristic laxness ...

And, Nagourney might have added, if there was eagerness why the eagerness. Specifically, was there a pre-endorsement deal?. ... Nagourney doesn't seem to even make an attempt to find out the answer to his question. WaPo at least has some reporting on the vetting process-- and it doesn't reflect well on the expert Obama "team" that "scoured" Richardson's background. If there wasn't eagerness/laxness, it certainly looks like there was incompetence. After all, even if Richardson didn't fully disclose the scope of the investigation that scuppered his nomination, what kind of savvy Washingtonian would take Bill Richardson at his word? A scout for the Kansas City Athletics, maybe? ...  P.S.: WaPo certainly didn't get to the bottom of the issue. We demand "tick-tock"--accounts of who said what to whom. And what they were eating. ... Backfill: Byron York notes that, if WaPo's report is right, the FBI seems to have started its background check one (1) day before the appointment was formally announced. ... 1:17 A.M.

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We'll all be working for Andrew Breitbart one day (if we aren't working for Arianna). In the meantime, he's launched Big Hollywood. ... I'm not sure he can succeed in his mission of getting conservative entertainment industry types to come out of the ideological closet--they're too worried about losing paying work. But that's kind of his point, no? ... 12:25 A.M.

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Enjoyable anti-DiFi sniping by William Bradley. ... He notes that CIA nominee Leon Panetta is more than just a Clinton loyalist (for one thing, he hasn't been all that loyal).  ... But Bradley describes the Iraq Study Group, on which Panetta served, as

"widely excoriated on the right two years ago but whose blueprint is basically being followed today."

Really? I must have missed the part of the blueprint where the Iraq Study Group called for the Petraeus "surge" strategy. ... Update: Fred Kaplan joins the "Keep Kappes" choire, and has a suggestion for breaching the CIA's own internal wall to coordinate intelligence in specific problem areas. ... P.S.: We need a czar! ... Oh, wait. We already have a czar. ... 12:09 A.M.

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Tuesday, January 6, 2009

Michael Hirschorn has seen the future, and it is ... Arianna.

In this scenario, nytimes.com would begin to resemble a bigger, better, and less partisan version of the Huffington Post, which, until someone smarter or more deep-pocketed comes along, is the prototype for the future of journalism: a healthy dose of aggregation, a wide range of contributors, and a growing offering of original reporting. This combination has allowed the HuffPo to digest the news that matters most to its readers at minimal cost, while it focuses resources in the highest-impact areas. [E.A.]

Hmm. OK! .... But I don't quite understand Hirschorn's argument that the proliferation of "lifestyle fluff" in the Times has "undermined the perceived value of serious newspaper journalism." That seems a bit like the argument that gay marriage undermines the perceived value of traditional marriage. How? I don't know anyone who doesn't read the news because of the presence of the fluff. And I know quite a few people who read the news and also love the fluff. ... My problem with the fluff is that the need to generate so much copy, coupled with the subliminal need not to piss off advertisers, leads to what my old collegaue H.R. called "hearty hack" writing. But it's not as if most of the serious Times national reporters are great writers who are tragically infected by the hearty-hack virus. They would be hearty hacks without "Thursday Styles." ... Anyway, HuffPo has started its own lifestyle-y sections--e.g., "Living," and "Style"--for obvious commercial reasons not dissimilar from the Times' reasons. ... 11:30 P.M.

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Bulbblogging Brings the Hits!

Why do people seem to think saying

"I don't get ulcers. I give ulcers."

is winning, as opposed to obnoxious? ... It's not like saying "I don't make art. I buy art." ... 2:23 A.M.

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Michael Kinsley used to say that every time journalists use the "from A to Z" form of expression--as in "spans the spectrum from A to Z," or "everyone from X to Y"--it only serves to show how narrow the spectrum being described is, not how broad. There's a good example of this Kinsley iron law** in the press-releasey piece The Big Money ran on Mayor Bloomberg's newfangled poverty measure:

For decades, scholars and policymakers across the political spectrum—from Patrick Moynihan to researchers at the American Enterprise Institute—have argued that [the old poverty] measure is broken. [E.A.]

I submit that the distance between Daniel Patrick Moynihan and AEI is something less than vast. It would be more accurate to say that Moynihan is revered at AEI, especially Moynihan's neoconservative tendencies. Chris DeMuth, AEI's president from 1986 until recently, worked for Moynihan. And here's a Charles Krauthammer showpiece AEI lecture that builds on praise for Moynihan.

It's hard to tell if the Big Money's author, Georgia Levenson Keohane, is credulous or simply thinks her audience is. Are you impressed that in developing his new poverty measure, Mayor Bloomberg "met extensively with Rep. Jim McDermott of Washington, who in September introduced the Measuring American Poverty Act of 2008 in the U.S. House of Representatives"? Then you are easily impressed.  Keohane doesn't even deal with some of the obvious potential controversies surrounding the new measure (which produced a poverty figure for New York City that is 20% higher). Specifically,

a) Should Medicaid and other government health benefits really be counted at full dollar value? They cost what they cost. But you can't eat fancy health insurance--if it might one day pay for a $100,000 heart operation for you or someone else on the plan, that doesn't mean you're not destitute today.

b) Counting regional variations in the cost of living is a bit fishy, no? If I make enough money to live semi-comfortably in Tennessee, but choose to live uncomfortably in New York City, should I really be counted as part of America's failure to eradicate poverty? Keohane cheers Bloomberg's measure for apparently carrying this to ridiculous extremes by adjusting for varying costs of living "even within the city." It's one thing to suggest that New Yorkers shouldn't be expected to seek cheap rents in Tennessee. It's another to say people in Manhattan can't be expected to move to Brooklyn. And there's an obvious pecuniary incentive for a New York pol like Bloomberg to take into account geographic variations in cost of living--it makes New Yorkers look needier and helps him beg for more federal assistance.  

c) The poverty line is just a line--a necessarily arbitrary line. It's mainly useful to show trends--i.e., is there more "poverty" or less?  If the line is reformulated so more people fall below it, they are no better or worse off than before. But moving the line serves an obvious propaganda point--if "advocates" can say 23% of the population, not 18%, is officially "poor." Why not avoid the "propaganda" charge by doing what Gary Burtless of the Brookings Institution once suggested to me: refine how we measure income, but then set the poverty line so that, for the first year, there are exactly the same number of poor people under both new and old measures. That would make it harder for those on the left to use the new formula as part of a rhetorical scare campaign. Why do I have a feeling that would also reduce much of its appeal to Keohane?

**--Another journalistic iron law: Every time a reporter says a person is funny and gives an example, the example won't be funny. As in yesterday's NYT piece on Bill Richardson--

He is known for his easy sense of humor — during the 2004 Democratic convention, he distributed jars of salsa with his picture on them ... [E.A.]

This rule holds even, perhaps especially, if the person in question really is funny. I do not know whether that's true of Richardson. ... 1:23 A.M.

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Monday, January 5, 2009

A knowledgeable insider notes a source of labor leverage over on Big Business that I hadn't thought of in discussing (below) a possible Big Business sellout of small business on "card check":

Also, don't forget, the Business Roundtable [i.e., Big Business] in particular has a strong incentive to keep the unions happy on card check because of the pressure unions are exerting on capital markets issues such as access to the proxy, "say on pay," precatory proposals etc. - issues that BRT CEOs really care about.  If people really want to understand the leverage unions have, despite their small size, they should look to the power of union pension funds and such groups as CII. [E.A.]

CII seems to be the Council of Institutional Investors, whose membership includes lots of union funds. ... P.S.: It's kind of a sad commentary on American capitalists if they aren't scared of what might happen to their actual production process, but are scared of what self-styled do-gooder investors might say at a shareholders' meeting, no? ... After all, they can always ship those union production jobs overseas. They can't do that with shareholders. ... 8:22 P.M.

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LAT vs. CFL: The PC Times turns against compact flourescent bulbs, on aesthetic and environmental grounds. I'm with the Times, against the times. Does that put me to the right of Wal-Mart or the left? ... P.S.: Or just in the Shade? ... 6:08 P.M.

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Rod's Army?

Sunday, January 4, 2009 

Too early to gloat on card check: From a respected weekly email written by a top D.C. Hill observer--

In the 111th Congress' first week, House Democrats plan to pass organized labor's first priority, the Card Check bill that would make organizing workplaces easier.  Republicans and business passionately oppose the legislation.  Timing of Senate action is uncertain, as Senators are consumed with confirmation of President-elect Obama's nominees to the cabinet. [E.A.]

It's tempting for "card check" opponents to gloat about it's deteriorating prospects in the Senate. I've indulged in some near-gloating myself. But it's ill-advised, to say the least. (I'm certainly not going to rely on WSJ's Kimberly Strassel after her disturbingly similar sneering on immigration). ...Among the alarming-but-plausible possibilities, there remains the threat of a deal in which Big Business effectively sells out Small Business by cutting some sort of compromise with Big Labor that would make organizing drives much easier. ...Remember that big companies are probably better positioned to absorb the costs of fighting unions, and they are more comfortable, perhaps, dealing with union bureaucracies. Plus it's likely that big corporations have already been the targets of unionizing campaigns if they are vulnerable. Smaller companies, on the other hand, might not have been worth organizing under the status quo but might become targets if the rules are changed to make organizing less time-consuming. ... The case for a big business/small business sellout doesn't seem as clear-cut as with government regulations (where bigger businesses are almost inherently better able to deal with paperwork). But it's worth watching out for. ... 9:35 P.M.

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Bill Richardson doesn't even 'vet for Commerce'! Always trust content from kausfiles [see, e.g., last item]. ... P.S.: A HuffPo rundown of questionable Richardson behavior here. ... 9:15 P.M.

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Rod's Army: Never mind the issues of race or electability. Will labor unions and other powerful Dem constituencies be pressuring Senate Majority Leader Reid to seat Roland Burris, the appointee of tainted Gov. Rod Blagojevich, simply because they think they desperately need one more vote in order to quickly pass controversial bills (i.e. card check!) over a GOP filibuster? Is that why Reid waffled on Meet the Press? Does the pressure to seat Burris actually depend on whether Al Franken gets the contested Minnesota seat--because, at least according to Nate Silver, if only Burris or only Franken is seated, the Dems don't get any closer to their goal (they gain a seat but the cloture-breaking bar rises from 59 to 60 votes)? Did Blagojevich know all this before he made his pick? It's not like he's tight with the SEIU, the major proponent of "card check" within the labor movement. ... Oh, wait. ...

Update: Alert reader S suggests I've misconceived the sitution--that Reid wants Burris seated (for the extra vote) but can't show it for fear of seeming to approve of Blagojevich. Reid would prefer to have the courts to force him to do it--that would be the ideal Kabuki. But this doesn't change the possible role "pressure" might play in forcing Reid to accept something less than the ideal Kabuki--a negotiated deal, for example, or quickly abandoning an appeal after an unfavorable initial ruling. ... 2:26 P.M.

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Happy New Sneer

Friday, January 2, 2009

New Yorker's Sasha Frere-Jones has found a way to make himself readable--limit himself to 140 characters at a time. Unfortunately it seems to be a stunt, not a hard technical limit. [Via Rachel Sklar]  4:16 A.M.

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Footnote to a footnote to a footnote: Those closely reading the complaint in the Vicki Iseman libel suit against the NYT (and who isn't, really) may notice a quote from Matt Yglesias on page 21, calling the Times' Iseman story "a pretty shameful attempt to set up a Kaus-like presumption of guilt." Q: What's that "Kaus-like" all about? A:Yglesias was almost certainly referring to this 2007 kf post, which isn't about McCain and Iseman but about John Edwards and Rielle Hunter. It argued that Edwards' initial denial of the National Enquirer's original story was too sharp and confrontational (he'd said it was "made up") which was "not necessarily a smart move for a politician in Edwards' position." Yglesias thought I had assumed Edwards' denial was b.s. (which of course it was). I claimed I didn't assume his guilt--that even if Edwards was innocent it would be unwise for him to directly attack his accusers, lest that spur them redouble their efforts and make it a two-day story or worse. I admit it was difficult to avoid assuming Edwards' guilt since I pretty much knew he was guilty.

P.S.--Yglesias wrong, so very wrong: In the event, Edwards' denial spurred the Enquirer to redouble their efforts and they nailed him. ... Meanwhile, Yglesias had argued: "No doubt by now we've had all the legitimate news organizations in the country looking into it and it seems that . . . nobody can come up with any evidence." It turned out, of course, that "legitimate" news organizations hadn't spent a lot of effort looking into it. ...

Whatever you do, do not let this man speak for the Center for American Progress Action Fund! ... 3:17 A.M.

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1) Immigrants are leaving Southern California. 2) Crime is falling in Southern California (contrary to criminologists' 'hard-times=crime' predictions). 

Is there a connection? I don't know. But don't expect the Los Angeles Times to even ask. ... [Thanks to alert reader R.] :2:07 A.M.

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I missed "The Music of Seal on Ice" TV special. Did someone liveblog? ... 1:44 A.M.

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You're No LGM, or even FMK: Exhausted by 24 hours of nonstop mindless piece-rate sneering, Gawker's Alex Pareene resorts to one of the oldest tricks in the book! (But you'll have to be nastier than that to make me link, buddy!) ... 1:39 A.M.

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kf Sees Seeds of Recovery in its Own Suffering!

Wednesday, December 31, 2008 

I recently took a 10% pay cut. Maybe I should have tried to postpone it until 2011, UAW style!  But I've always thought variable pay--rising and falling with the economy--was a good idea, since it enables firms to avoid layoffs in down times. And I'm a terrible negotiator. I didn't think I had much leverage. It was all over in about 40 seconds. Faster than the Wagner Act!

According to the NYT, lots of employers are taking this wage-cuts-not-layoffs approach. In theory this should help the economy recover faster, no? I'm influenced in this view by Martin Weitzman's Share Economy, which notes that one of the flaws in classical economic theory that prompted Keynes' corrective was the stickiness of wages. In theory, they're supposed to fall in a recession until it pays employers to hire people. In practice, they don't. But now, they do. At least a bit more than before.

Taking a wage cut isn't the form of "variable pay" that Weitzman advocates--if I remember right, he wants workers paid a "share" of the firm's profits or revenues, structured so that every time a new worker gets hired (and takes a share) it effectively lowers the pay for existing workers (whose share is now split among more people). That creates an incentive for firms to constantly go out and hire in bad times and good--an incentive that doesn't exist in my case. (My pay's gone down, but it won't go down more just because Slate hires someone new--unless of course they hire them to, you know, replace me).  Still, if wages are less sticky downwards, it should help, no? ...

I attempt to hurriedly make this point in the gala "New Year's Bloggin' Eve" edition of bhTV. ... 6:28 P.M.

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How come you almost never see Saturn Astras on the road here in Southern California? They're still selling them, aren't they? How bad could they be? ... All of GM's efforts should be as successful as its campaign to kill Saturn. ...  6:10 P.M.

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As 2008 ends, the search for Matt Yglesias' manhood is focused on a remote, wooded area near Oxon Hill, Maryland. ... 5:22 P.M.

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What's Worse Than Camelot? Cuomolot!

Tuesday, December 30, 2008

Enjoy your daily print newspaper. It's later than you think. ... 1:02 A.M.

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Magical Moment: One seemingly sure sign Obama is actually, really not going left, at least on economic policy: Robert Kuttner isn't sucking up!** Instead he's frankly anguished about the incoming economic team. ... P.S.: OK, there's a small, vestigial suck-up at the end. ...

**--For Kuttner's 1992 flattery of president-elect Clinton, click here, search for "epic." ...12:47 A.M.

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Monday, December 29, 2008

Fire Fire Mickey Kaus. They're falling down on the job. ... No wonder I still have this gig.

Update: They've been spurred into action, arguing

It's true that unions are poor vehicles for equitable distribution of wealth. They have also failed to cure cancer, and they haven't done anything to stop Russian aggression in post-communist Europe.

Now it's obvious unions are "poor vehicles for equitable distribution of wealth." Please tell it to Kevin Drum (and Paul Krugman). ... 7:26 P.M.

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Life in the Left Cocoon:  Promoting the Southern, corporate, anti-UAW agenda, Kevin Drum says he's "open" to "good-faith efforts to address reform" of "mushrooming work rules." But he's still for greater unionization:

Conservatives flatly oppose anything that gives labor any additional bargaining power, full stop, and that doesn't leave much room for compromise. So unions it is. Especially in the service sector, they're pretty much the only idea on the table for seriously addressing low-end wage growth, and that means I'm for 'em. [E.A.]

The only idea on the table? How about restoring economic growth and creating a tight labor market, giving all workers (not just the unionized) greater bargaining leverage? That's the traditional Clintonite formula, no? To that you could add border control to ensure that competition from unskilled immigrants doesn't undermine leverage among lower-wage workers..... Drum goes on the cite Ezra Klein for the proposition that:

the last great leap forward for unions was during World War II, and the last great expansion of the American middle class followed in its aftermath. In contrast, the most recent expansions -- which have largely occurred in the absence of unions -- have benefited America's rich. [E.A.]

Huh? The biggest recent expansion, during the '90s, a) benefitted Americans at all levels, but especially average workers and b) occurred largely while union power was ebbing. The Clintonite formula worked. Maybe it can't be achieved again. Maybe it's flawed because (sorry!) the rich got richer too in the Clinton years. Maybe a return to Carter-era union power will be better still! But those are arguments Dems like Drum and Klein won't even deign to make as long as they keep reassuring each other that they not only have the best ideas around but the only ideas around. ...

P.S.:  Klein also argues;

The countries with the world's highest growth rates -- the Nordic economies -- also have some of the world's highest rates of unionization. Denmark, Sweden, and Finland all approach 80 percent. 

There's an argument that in countries with 70-80-90 percent unionization, unions have to be more responsible--union leaders know that any inflationary wage increases are going to be paid for by their own members (who are essentially everyone), and they know that any declines in productivity will hurt their own members (essentially everyone). Not only do they have an incentive to be reasonable, but they have the power to keep their own membership--say, those unions that could get bigger-than-average increases by striking--in check. But we aren't going to get 80% unionization. We're going to get 20-25% or 30% unionization, with unions that are powerful enough to cut good deals for themselves (and impose resulting price increases on everyone else), but not so large that they have to take everyone's interests into account. ... (This is point made by Mancur Olson and noted by Robert M. Kaus a year before Klein was born. Yikes.) ...  4:06 P.M.

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They Said It Couldn't Be Done! How to Make Caroline Kennedy More Boring:  Caroline Kennedy's ragging of NYT reporters, for which she's now being pilloried, is of course one of her better recent moments:

NC: Could you, for the sake of storytelling, could you tell us a little bit about that moment, like, where you were, what you said to him about your decision, how that played out?

CK: Have you guys ever thought about writing for, like, a woman’s magazine or something? (Laughter)

DH: What do you have against women’s magazines?

CK: Nothing at all, but I thought you were the crack political team here.

Kennedy's bristling at the embarrassing, sentimentalizing conventions of journalism (at Newsweek the question was always "what were you eating") and isn't afraid to invoke some undiplomatic truths (i.e. women's magazine's often run softball crap). Either she'll keep it up--in which case maybe there's something to the idea that she has the virtues of an independent outsider--or, more likely, she'll become even more safely platitudinous. ... 3:19 P.M.

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The Aribtrariness of Wagner Act Redistribution: Richard Posner makes an essential point usually overlooked by those on the left who instinctively support unionism in the hope that it will achieve some sort of just redistribution of income:

The redistribution of wealth that they bring about is not only fragile ...[snip] ...but also capricious, as it is an accident whether conditions in a particular industry are favorable or unfavorable to unionization. [E.A.]

Or, as Robert M. Kaus put it in very small type in 1983:

The "economic power" that the Wagner Act gives unions is determined by all sorts of factors that have nothing to do with the moral basis of a union's cause. Workers who work in a single location, for example,are easier to organize than workers who are geographically dispersed, even though the latter may work in sweatshops and the former in comfortable, lighted factories. Some industries are extremely vulnerable to strikes--industries that deal in perishable goods, for example, or industries (e.g. Broadway theaters) where you can set up a picket line that will intercept a lot of customers. In other industries, advances in technology have weakened the power of strikes, as petroleum and chemical workers discovered when they walked out and found that skeleton crews of supervisors could run computer-controlled refineries for a long time. Did the chemical workers deserve to be paid less simply because their industries had become more strike-proof?

This arbitrariness is not just a trivial side effect of the collective bargaining system. A truism within the labor movement holds that "the workers who need the unions the most don't get them."  .... The answer of labor leaders to this dilemma is simple: more unions. .... But even if the law required unions in every workplace, there is no reason to think wage inequalities would shrink in any systematic fashion. Sol C. Chaikin, president of the International Ladies Garment Workers Union, often complains about the "two-tier labor force" in the United States--but he is complaining about a disparity that exists within the ranks of organized labor. ... The Wagner Act gave Chaikin's union the power to strike. Unfortunately, fate did not give it any of the chance attributes that might enable it to use strikes to boost wages dramatically above their market levels. [E.A.]

If you organized the operators of drawbridges going into Manhattan, under the Wagner Act your union will be able to extract quite a premium by striking. If you organize fast food workers, not so much. I've never understood why leftish idealists ever bought into the idea that this is distributive justice. ... 1:12 A.M.

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Sunday, December 28, 2008

Two year-end TV roundups--by Tom Shales and by Inside Cable News. One of these guys is paid an incredible amount of money. And one of them phones in a list of usual suspects. ... P.S.: From the other one:

Unlike NBC’s very public axe wielding, CNN’s cuts came about suddenly as a bunch of on the air talent lost their jobs. Most notable loss; CNN veteran Miles O’Brien. CNN has yet to publicly account for all this talent loss, which flied in the face of the public posturing done by Jonathan Klein regarding how his network was in the money.

Jonathan Klein, dissembling? We're shocked. ... 7:00 P.M.

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Friday, December 26, 2008

Don't Blame Gettelfinger: Rand Simberg's anti-UAW-work-rule post was better than mine. He has horror stories, including his own--noting that there are too many floating around for them to be "merely anecdotal." (Another bit of confirming evidence: The union firms went broke! Non-anecdotally broke.) Simberg makes a point that's especially relevant now that the UAW is arguing that labor is only "10% of the cost of the vehicle."

And the rules don’t just affect productivity — they affect quality as well. When you can’t discipline employees for being absent without leave, when you have to bring in unfamiliar workers to fill in for them, when you’re missing half your plant during hunting season — yes, the stories about avoiding buying cars built on Monday or Friday in the fall are true — you can’t expect to put out a quality product, regardless of how well or poorly designed it is. You particularly can’t expect to do so when the union rules put all responsibility for quality and production on management, but give them no authority to manage the workers and provide the workers with no incentive to build a quality product if they lack the personal pride to do so. [E.A.]

Labor may only be 10% of the cost of the vehicle, but it's still going to be a vehicle nobody wants to buy if it's poorly made. ... Note: The UAW does make some high quality cars, especially at the NUMMI joint venture with Toyota in San Jose, where they threw out the UAW work rule book. Why couldn't GM successfully spread the NUMMI system to all its other plants? Ask the UAW. ...

P.S,: Here's a Business Week profile of the UAW president Ron Gettelfinger. Seems like a reasonable guy! But that's the point. Gettelfinger isn't the problem--I suspect, for example, that the UAW leadership knows pretty well what the problems are in its factories. The problem is the system, the American adversarial labor-management negotiating system, in which reasonable people doing what the system tells them they should do wind up producing undesirable results.  Just as negotiating over work assignments means factories adjust too slowly to generate continuous efficiency improvements (which often involve constantly changing work assignments)  negotiating ponderous 3 year contracts (in which Gettelfinger must extract every possible concession to please the members who elected him) means contracts adjust too slowly to save the companies from failure if market conditions change.  From Business Week:

[T]here is a pragmatic Ron Gettelfinger as well. Three years ago, the automakers were in trouble, and he knew that without concessions there would be no jobs for his members to report to. When Detroit came looking for givebacks, Gettelfinger ultimately agreed to a contract that set back starting factory wages 30 years: New hires will begin at $14 an hour—half the wage for veterans and a pay scale not seen since the '70s. Plus, he has watched the Big Three cut some 80,000 jobs since 2005.

That also brings up a key criticism from Detroit's executives. Gettelfinger made those key concessions starting in 2005, but not until Ford and GM were reeling toward massive losses. The union has never given enough to get the companies ahead of the curve. "It's always a day late and a dollar short," says one former GM executive. [E.A.]

See also this interview, pointing out that the $14 wage scale for new hires hasn't had an impact because nobody new is being hired by the UAW's employers, who are shrinking, not growing. The obvious alternative to cutting the pay of nonexistent future workers would be to cut the pay of existing current workers--but they are the people the system tells Gettelfinger he needs to please. ...

Fifteen years ago, at the start of the last Democratic president's administration. incoming Labor Secretary Robert Reich famously said "The jury is still out on whether the traditional union is necessary for the new workplace." Tactfully put. This fall, if not earlier, the jury came back. 5:19 P.M.

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What's Worse Than Camelot? Cuomolot! I should say that I'd certainly prefer Caroline Kennedy to at least one candidate for Hillary Clinton's seat. That candidate would be Andrew Cuomo. Caroline may be boring but she does not seem evil! (For some links on why I think Cuomo is a thuggish irresponsible opportunist, click here. I also had some unpleasant dealings with his self-promotion machine at HUD, when they were busy hyping and distorting some homeless statistics in order to get his name in the paper.) ... These are not the only two people in New York state, however. ... 4:30 P.M.

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Jennifer Palmieri is the kindest, bravest, warmest, most wonderful human being I've ever known in my life.

Tuesday, December 23, 2008 

Alert reader D on the SEIU chief Andy Stern's defense of "card check" in a bloggingheads discussion with Robert Reich:

His substantive problem is that he assumes the conclusion, which is that workers need and want unions.  Anything that interferes with that is therefore by definition wrong and is contrary to their will or at least to their best interests.  If workers vote a union down it must be because they were intimidated, because a negative vote like that would be like a man voting against eating.  It would be unnatural and open to suspicion.  Stern could not stand up to a good interviewer for five minutes.  Even Reich knew he was not responding to the question and was unconvincing - which is saying plenty.    
        One of the good things about bloggingheads is that if you can't make your case there you can't make it anywhere.  You have the time, you have a non-disrespectful, non-cross-examining interlocutor, you're in familiar surroundings and don't have distractions.  

In the process Stern dances around the issue of taking away the secret ballot, saying the issue is "whose choice about how to form the organization is this, the employers or the workers."  No, the issue is how do you determine what the workers' choice is.  If Stern wants to have a secret ballot about whether to have a secret ballot, then he'd be amending the labor law to give workers the choice he says he wants to give them. (Maybe that's not a bad compromise.) ...

P.S.:  A common tactic of card check proponents is to say that opponents aren't really against the elimination of the secret ballot, they are really  against unions. Hey, why can't I be against both?  There are two legit  issues here: democratic principle  and whether more American-style unionization is the answer to our economy's problems. Yes, if there were a procedurally fair reform that promised to dramatically increase the unionization rate, I'd have a more difficult choice. But this isn't that case.  I'm willing to bet that a) workers who vote anonymously, free of the collective social pressure that can come with public voting, will rationally decide, often enough, that the drawbacks of unionization (in terms of the adversarialization of the workplace, lost productivity, and winding up like Detroit) outweigh the benefits, and b) workers who do decide to unionize their companies will find those companies losing out in the marketplace and shrinking (as has been the case, most conspicuously, with Detroit). ... Bet (a), at least, is a bet Stern obviously doesn't want to take--even though in the bhTV interview Reich is clearly, if timidly, trying to push him in the direction of a package of reforms aimed at curbing employer "coercion" rather than ending the secret ballot. ...  7:54 P.M.

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"We don't report stuff like this" Except, you know, when it involves John McCain and not Pinch Sulzberger. ... Keep rockin! ... 6:01 P.M.

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Monday, December 22, 2008

The "Community" Strikes Back: Matt Yglesias is kidding either himself or us when he claims that he won't self-censor just because Jennifer Palmieri, "Acting CEO" of the outfit he blogs for (the "Center for American Progess Action Fund") commandeered his site** to post a disclaimer in BS-ese after Yglesias criticized a CAP ally. He writes:

Under the circumstances, it’s better for me, better for CAP and CAPAF, and better for everyone to understand that I’m writing as an individual not as the voice of the institution. Pointing that fact out isn’t contrary to me having an independent voice, it’s integral to having one. ...[snip] ... My role is to say what I think on the blog; that’s what I’ve always done and will keep doing.

No. Next time Yglesias wants to write something that might alienate one of CAP's numerous friends, he has to ask himself a) do I want Jennifer Palmieri to come squat on my blog again, and b) even if she doesn't, do I want the hassle of arguing with her or my bosses to prevent them from acting to  ... er, "clarify" the situation in some other way? That has to tip the scales slightly--and, if my experience is any indication, more than slightly--in favor of pulling your punches and avoiding the hassle. ... Keep in mind, Palmieri didn't intervene because what Yglesias said was wrong--factually or logically---but rather simply because what he said differed from the position of the "institution." Why doesn't she get her own blog? ...

This is all hugely embarrassing for CAP. Palmieri, last seen helping John Edwards lie, owes Yglesias a published apology. I would think Yglesias could and should insist on it--he was a prestige acquisition for CAP, and it would damage them if he left. As things stand, he's been semi-emasculated.

Keep rockin'.

P.S.: Is the group Third Way's "domestic policy agenda" really "hyper-timid incrementalist bullshit"? America wants to know! Or it does now! Isn't the first rule of flackery don't issue a denial that just gives more publicity to the charge you are denying? ...

**-- I should not have said "commandeered." I regret the error. CAP is a key leader in the progressive movement. I look forward to working with them in the future. What I meant to say is that Yglesias "allowed Palmieri an opportunity to issue a different opinion."  Our fraternal Soviet comrades are welcome in Prague anytime! ... [via Insta] 9:58 P.M.

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Don't Sweat the Details?

Where's the Quirk? The seemingly infallible Nate Silver counts cloture votes on 'card check,' with a particular focus on Arkansas Sen. Blanche Lincoln:

Arkansas is not the only state with a Democratic senator and low union membership. Pretty much the entirety of the South is in the same boat, with the important exception of Louisiana. But, while there aren't many union members in Virginia, North Carolina or Florida -- nor in some states like New Mexico outside of the South -- Barack Obama is quite popular in all of those areas, which he is not in Arkansas. Arkansas and really Arkansas alone presents the unique combination of Obama being unpopular and the union movement being virtually nonexistent, and among the two Democratic senators in Arkansas, Lincoln is up for re-election in 2010, whereas Mark Pryor is not. It's not a coincidence that she's hemming and hawing on EFCA. [E.A.]

Except that Pryor is hemming and hawing too. ... P.S.: Does this mean we can abandon the grail-like quest to find an instance where Silver was wrong? Not quite. But it does suggest the flaw in his mode of thinking--which seems to be to assume that pols respond in predictable ways to predictable factors (just as voters vote in predictable ways according to demographic factors). Isn't there room for persuasion and quirkiness? ... True, when I made this criticism before, during the Dem primaries, Silver turned out to be right (everyone did behave predictably). But the night is young! Someone will behave unpredictably at some point. ... P.P.S.: In this case, the quirky factor Silver would be overlooking is the inherent non-appeal of the specific "card check" idea--i.e. it's hard for pols to publicly defend eliminating the secret ballot, even if Obama swept their states. ... 10:32 A.M.

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The Devil is In the Details, But Do the Details Matter? Steven Pearlstein's confident analysis of the auto bailout makes me think its critics, myself included--may have overly depressed ourselves by focusing on the actual details of the agreement--like the "non-binding" nature of the concessions required of the U.A.W.. Here's the more sanguine syllogism:

1) There's no way GM** and maybe even Ford can survive in the long run without either a) more bailouts or b) major sacrifices from workers, dealers, creditors, shareholders. That includes concessions on wages and work rules from the U.A.W. that would make GM factories competitive with foreign transplants in the U.S. (though not, I assume, with U.S. car factories in Mexico and elsewhere). The $9.4 billion the taxpayers have just loaned GM will be gone soon enough--within months. Then what will the company do?

2) There's no political appetite for bailing carmakers out again in March--i.e. for lending much more money to the automakers beyond the $17.4 billion already designated for both GM and Chrysler. The current bailout is unpopular enough. Critics say it won't work, that the car companies will just come back for more government money in a few months. When the companies prove the critics right, do you think Obama and the Dems, even with big majorities, are going to bail them out again? Maybe make a multi-billion dollar Federal subsidy permanent--a sort of underground conveyor belt from the Treasury to Detroit? I don't think so. GM and the UAW may be shocked that the public has not rallied to their side, but that seems to be the case. Obama has certainly given no signals that he's willing to permanently subsidize uncompetitive car companies (as opposed to not letting them go bankrupt at a time when that would have semi-cataclysmic ripple effects).

3) Therefore the workers, dealers, creditors and shareholders will have to make major sacrifices. It doesn't matter whether those sacrifices are spelled out in the legislation. It doesn't matter if they are vague-but-binding agreements or mere "targets." It doesn't matter if Barney Frank and Congressional Democrats keep the targets in or take them out at the urging of the UAW. The Congress and the President don't have to demand the taxpayer's $17 billion back (the sanction Bush boasts of). They can let GM and Chrysler keep the $17 billion. But as long as they don't offer up more billions, the manufacturers (and the UAW) will have to make the necessary changes, whether or not they technically go bankrupt.

Everything else is kabuki.

I can't think of anything major wrong with this logic. It's possible that the companies and the union are somehow hoping that if the economy quickly revives and SUVs start selling they can rebound without much pain and maybe make it to 2011 when the two-tier wage structure they've negotiated will begin to kick in. If that happens, it happens. But if it doesn't, I still don't see the Democrats coming across with a second huge tranche of cash. Maybe I am missing something.

**--I'm focusing on GM because I doubt there's any way Chrysler can survive as an independent company, period. ...

Update: Jim Geraghty dissents on the crucial point #2--

The Obama Administration will  - most likely — look at whatever restructuring effort the Big Three have made and wag their finger at slow progress, but declare that due to the economic circumstances, allowing the automakers to collapse is "not an option," and then open the checkbook again. Lather, rinse, repeat. The successful reform of the auto industry will always remain six months over the horizon.

Well, one of us is wrong. ... P.S.: Sounds like Iraq, circa 2006. The Friedman Unit returns. ... 1:50 A.M.

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You know it's a slow news day when MSN is headlining the feature "Can you name the noodle?" 12:33 A.M.

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Baby, Who's Your Stakeholder Now?

Friday, December 19, 2008 

Mo' Bailout:

1) The Treasury Department has now posted the terms of the bailout. 

2) How does the UAW's Gettelfinger get away with saying these terms are "singling out workers"? The deal calls for creditors to convert two thirds of their debt into equity. There are also limits on executive compensation. Maybe they're mostly toothless in practice--but the terms directed at the UAW are explicitly toothless. They're just "targets."

3) It's not a deal:  Note that Gettelfinger says he's unwilling to abide by these provisions and makes it clear he intends to "work with the Obama administration and the new Congress to ensure that these unfair conditions are removed." So it's not really a deal. It's a deal that one party has pledged to undo as quickly as possible. Think of the fuss if there were a Republican adminstration on the way and GM vowed to undo its obligations under the arangement as soon as possible.

4) We like it except for the parts that, you know, make our constituency change: Indeed, Barney Frank has joined in the call for removal of the UAW-sacrifice "targets" once Obama takes office. Is he actually amping up the pressure on the incoming President to protect the UAW, or is he just scoring cheap points with labor at a time when feelings are raw and he can't be expected to actually do anything? I smell Kabuki! They stick in non-binding targets. Labor and its allies rebel and righteously remove the non-binding targets. Everyone wins. Gettelfinger looks strong. Dems like Frank repay their debt to labor. Republicans get an anti-union cause. Nothing has happened. The real issue is whether Obama actually forces unionzed autoworkers to shave wages and (a much bigger issue) change restrictive work rules when the actual crunch date comes around next year.

5) Here are two paragraphs for my pro-union friends who doubt that Wagner Act work rules are a) at the core of Detroit's problem and b) the hardest thing to get the UAW to reform, because they require more than an incremental increase or decrease in compensation:

The Bush plan requires work rule parity between U.S. automakers and foreign automakers — not a simple task, said Aaron Bragman, an automotive industry analyst at consultancy IHS Global Insight.

“Work rule parity is very different between the UAW and the foreign automakers,” Bragman said. “Work rules govern how you make the cars, or who can touch what in the factory. There’s such a level of detail, and how a Japanese automaker makes cars is totally different to how a U.S. company makes cars. So there are a lot of difficult issues to be fixed very quickly. GM’s Rick Wagoner says they can fix them, but analysts are not so sure.” [E.A.]

As far as the UAW is concerned, this was not a change election! ... 11:24 P.M.

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Jobs Americans Won't Will Do: A WSJ report contradicts two pieces of pro-legalization CW:

1) 'Crops will rot in the fields without legalization and a "guest worker" program': Not this year--

Growers across the country are reporting that farmhands are plentiful; in fact, they are turning down potential field workers.

2) 'Non-immigrant Americans just won't do tough, dirty jobs like agricultural field work and day labor' Not any more--

In particular, Mr. Gray has observed an influx of U.S.-born Latinos and other workers who previously shunned field work. "These are domestic workers who appear to be displacing immigrants," says Mr. Gray.

A similar situation has emerged in U.S. cities from New York to Los Angeles, where unemployed, nonimmigrant laborers are seeking informal work that typically has been performed by low-skilled immigrants ...

Note that if Americans will do the work when they're desperate--i.e. when they can't get better jobs--that suggests that at least some of them will do the work if they're paid sufficient wages (i.e. when they can't get better jobs).  The point is they will work on farms. We're just haggling over the price, and the alternatives. That means, when the economy picks up, that farmers could get much of the labor they need by ... raising wages. What a concept. ... [As long as we don't raise autoworker wages, eh?--ed The UAW's members negotiated above-market wages, demanded lots of legalistic work rules, and now want taxes on people like $10/hour agricultural laborers to bail them out when their firms go under (while deferring modest wage adjustments until 2011). Seems like a different case! But maybe your point is that restricting the flow of illegal immigrant labor can raise the wages at the bottom of the ladder, for the "least among us," while protecting the UAW protects the $50/hour "aristocracy" of the labor movement. That must be it. I wonder which course the Democratic party dogma prefers.] ... 10:29 P.M.

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March Car Crash?

Find That Lede! The lede in this story is ...

1) A man who was until recently a top aide to Gov. David Paterson, who will pick the next N.Y. senator, is very close to the Kennedys!

2) A top aide to Gov. Paterson didn't pay his taxes for five years!**

3) But at least the Kennedys didn't give this top aide to Gov. Paterson thousands of dollars! ... oh, wait!

As alert reader J emails: "What if Jesse Jackson Sr. and other relatives loaned money to Blago's ([until] very recently) top aide and now Jesse Jr. was trying to get Senate appointment?  Wouldn't Patrick Fitzgerald be investigating?" ...

**--The aide resigned in late October, a few days after the story linked above. The initial version of this item erroneously suggested he still had his job. [4:34 P.M.] ... 4:20 P.M.

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Obama in a manger ... and they say he's burdened himself with messianic expectations. ...[But Carla Bruni is there too. And Silvio Berlusconi--ed Where's Greg Packer?]  4:03 P.M.

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I'm not sure that we know all the details of the Bush-negotiated auto bailout deal, but it certainly looks as if it's pretty much the same arrangement Congress was considering a couple of weeks ago, with the same flaws. [See fourth item here.] Basically, next March, if the auto companies are fudging on the plans that will make them "viable," Obama will have a choice--either 1) kill them (by forcing a bankruptcy in which they have to actually pay back the government's $17 billion, which they will already have spent)  or 2) acquiesce in whatever insufficient semi-sacrifice they've come up with. Do you really think he's going to pick Option 1?  It's too nuclear to have any credibility. ... That leaves open the possibility that the deal will produce what the "stakeholders" want it to produce--a bailout by the taxpayers that at least temporarily lets them avoid giving up the things (like the UAW's 22-pound contract) they'd have to give up in a normal bankruptcy proceeding.

Note how the NYT describes the "compromise" struck with the UAW:

[Senate] talks had deadlocked on a demand by Republicans that the wage cuts take effect by a set date in 2009, while the union had pressed for a deadline in 2011.

The plan announced on Friday offered a compromise between the positions, by making the requirements nonbinding and allowing the automakers to reach different arrangements with the union, provided that they explain how those alternative plans will keep them on a path toward financial viability. [E.A.]

That's one way to compromise between a 2009 deadline and a 2011 deadline--make all deadlines meaningless! I mean, "nonbinding." ... Or, rather, "targets." ... The only hopeful sign that the deal actually has some bite came from the UAW, which complained of  "unfair conditions singling out workers" that weren't included in Congress's ill-fated proposal. But the union "didn't say what those conditions were." ...

Update: Presumably the union is referring to the non-binding "targets" outlined here.

The agreement calls for union wages and so-called work rules identical to those offered to the U.S. workers of foreign-based auto makers such as Toyota Motor Corp. The UAW has argued that, in accepting a two-tier wage structure as part of last year's labor deal, its wages already are consistent with Toyota's. Work rules -- which govern vacation time, break time, job classifications and the conditions under which a company can bring non-union contract workers into plans for non-automotive work -- remain a discrepancy between Detroit's auto makers and their non-unionized rivals.

For internal and external political kabuki reasons, it's in the interest of UAW leaders to complain--it shows their members that they are fighting for them, it suggests to the public that they are reluctantly doing their part--which creates grounds for skepticism about the severity of the "conditions." ... 1:09 P.M.

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What About Ford?

Caroline, No II

Wednesday, December 17, 2008  

Card Check Update: Democratic Senator Blanche Lincoln is waffling and waffling; potential GOP crossover Voinovich seems to remain a firm no. Marc Ambinder says card check "is teetering on the brink" of defeat, even as he also serves as conduit for pro-union spin. (Sample: "Labor may not have the 60 Senate votes it needs to beat a filibuster, although some labor strategists are confident that, in private, the numbers are there." In private, "comprehensive immigration reform" passed in 2006. Only the voters objected.) ..  See also Faughnan (who argues that, "It's a shrewd move by Lincoln to announce her opposition early"--except that Lincoln's office then quicky revised her position to "undecided.")

Plus: kausfiles has strange new respect for Rev. Sharpton! ...

P.S.: Alert reader J emails with an interesting proposal: Let the unions have their "card check" provision--allowing them to substitute publicly-collected, signed cards saying "we want a union" for a secret ballot vote. If the union gets 51% of the employees to sign the cards, it gets recognized.  But let the employer also collect cards from employees who don't want a union. If the employer gets 51% the union has to go away for five years. You'd hear soon enough about how collecting cards in public is unfair, opening the door to pressure tactics, intimidation, etc.. ... 12:54 A.M.

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Surefire Recipe for a Good Time: Newsmax is sponsoring a cruise featuring Dick Morris, "some of the nation's top alternative health doctors," and Alexander Haig. ... P.S.: Venn Diagram, please! ... 12:30 A.M.

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Tuesday, December 16, 2008  

"She was 'no drama' before 'no drama' was cool."  I think they've discovered a tactful way to say "boring." ... 10:50 P.M.

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"Look at GM, and tell me strong unions are good for the economy"

Monday, December 15, 2008 

From Taylorism to Wagnerism: Sympathetic but ultimately damning analysis of the U.A.W. from Michael Barone. ... P.S.: A misguided Warren Court decision--basically requiring unions to prosecute individual grievances under a "duty of representation"--magnified the Wagner Act's inherent adversarialism, it should be noted. Before the decision, unions could pick and choose only the best grievances and drop the rest. (In 1957 at GM, for example, the UAW only pursued 24 grievances to arbitration, according to Robert M. Kaus). After the 60s-era liberal legalists were through creating a right of individual workers to sue their unions, even a labor stalwart like AFSCME's Victor Gotbaum would say "It's almost as if we have to protect bad workers." ... 2:00 P.M.

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We need a Czar Czar, to crack the whip on all the czars. ... P.S.: Also a federal czar policy. Right now, czar decisions are made on an ad hoc, case-by-case basis, with no attempt at czar harmonization. ... 12:40 A.M.

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A Coming GM/UAW Split? I'd missed Clive Crook's Nov. 11 article on Detroit's collapse. It's behind a National Journal subscription wall now, and a subscription to the National Journal costs roughly as much as a controlling share in the Chrysler Corporation. But here's the most relevant passage:

[T]he unions raised wages and benefits to insupportable levels, and for years blocked efforts to cut costs and increase efficiency. Worst of all, by anointing themselves co-managers, they reduced the domestic industry's ability to react promptly to shifts in demand. Is this how the Democratic Party intends to strengthen the economy?

By their own standards, admittedly, U.S. car producers have raised their game recently, and they have done it with the unions' help. Productivity in some of the domestic producers' plants is now as good as in nonunion plants run by foreigners. But this came late, and only under duress. It took the imminent collapse of the industry to moderate the unions' demands.

Unions destroyed Britain's car industry, and during the 1960s and '70s they accelerated the decline of British manufacturing and of the wider economy as well. Of course, they were far more powerful in those days than U.S. unions have ever been. Unions in America today are weak and getting weaker -- a trend that they hope to reverse with the incoming administration's help.

The point of the comparison is not to suggest that America might get a case of the pre-Thatcher British disease, but simply to question the Democrats' conviction that stronger unions serve their voters' wider interests. Look at GM, and tell me that strong unions are good for the economy. [E.A.]

P.S.: Paul Ingrassia updates the run-to-momma politics of the bailout, in which the Bush administration may give the U.A.W. what it wants, namely bailout money without either a) further specific contract concessions (as demanded by Sen. Corker and other Republicans) or b) a quasi-bankruptcy proceeding that could nullify the unions' labor contracts entirely. ...

P.P.P.S.--'But It Took Us a Year to Negotiate': The sense of victimhood that Ingrassia criticizes comes through in the following passage from Saturday's NYT:

Alan Reuther, the chief lobbyist for the union, said labor leaders back in Detroit were astonished at what Mr. Corker was attempting to accomplish — a virtual rewriting of the U.A.W. contract, which typically takes the better part of a year to negotiate. “That’s one thing that our folks in Detroit were just amazed at,” Mr. Reuther said. “Does Senator Corker really think he can do a restructuring of the industry in six hours?” [E.A.]

Hmm. I guess that's sort of what happens when you go bankrupt! The work of a year can disappear in a few hours! Did they expect Congress to (as the saying goes) leave the money on a stump in the middle of the night? ... Note also the almost reverent concern for process--as if what's being protected here isn't the workers' wages or standard of living but the traditional painstaking dance of adversarial negotiation. It's always about respect--in this case, respect for the Wagner Act's elaborate formalities. Corker was short-circuiting them. But of course it's those elaborate formalities that got in the way of innovation and helped bankrupt the industry in the first place.

P.P.P.S.: I do think that in seeking a middle ground of specific wage concessions--but stopping short of a general contract nullification--Senator Corker wound up giving the unfortunate impression of political meddling in the details of wage rates, etc. It would have been simpler to just demand that the "auto czar" have bankruptcy-like powers to void the contracts. But of course the UAW, which is now vilifying Corker, would have liked that non-meddling solution even less than what Corker proposed. ...

More--Solidarity Not Forever: If the whole bailout deal is now really about protecting this (the U.A.W. contract) from a bankruptcy-style proceeding, how long will it be before General Motors realizes its interests are sharply different--and parts company with its union co-pleader? GM might like the UAW contract to be voided, after all. GM might also like the way a bankruptcy style proceed would give it the freedom to prune its dealer networks. The main factor encouraging GM to join with the U.A.W. in avoiding bankruptcy has been the fear that consumers would stop buying cars from a bankrupt manufacturer. But as the Weekend Journal noted, consumers may have stopped buying GM cars already, in anticipation of bankruptcy. If that's true, why wouldn't it be in GM's interest to just go ahead and have a bankruptcy or bankruptcy-by-another name? Which is exactly what the U.A.W. is counting on the politicians to stop. ...

Update: The entire Clive Crook article is here, free. ... 12:02 A.M.

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Sunday, December 14, 2008
 

Maybe the Mumbai attacks really were originally supposed to take place before the U.S. election. ... 10:37 P.M.

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What Wagner Act unions are good at producing. ... P.S.: The Japanese have nothing like it! ... 9:42 P.M.

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Where Do Detroit's Inefficient Work Rules Come From?

Friday, December 12, 2008 

Why have unionized Detroit auto manufacturers manifestly lost out to their non-union Japanese competitors, even when it comes to building cars in the United States--to the point where Congress is presented with a choice of bailout or bankruptcy? There are some obvious culprits: shortsighted American managers, schlocky designers, an insular corporate culture. Here's another: the very structure of Wagner Act unionism. The problem isn't so much wages as work rules--internal strictures that make it hard for unionized competitors to constantly adapt and change production processes the way the Japanese do. 

Now that everyone is criticizing work rules, it's easy to forget that they don't represent a perversion of the collective bargaining process--they are the intended result of that process, and were once celebrated as such. Here's an excerpt from a 1983 article by Robert M. Kaus:

[R]igid work rules are not a mere by-product of unionism. They are central to the collective bargaining system and in fact have been praised by labor scholars as one of its great strengths. During the postwar era of prosperity, they were thought to dovetail nicely with the form of business organization that seemed destined to rule the world, the large corporate bureaucracy. [snip] ...

The fertile marriage of business bureaucracy and collective bargaining soon produced a large family of rules whose complexity was the subject of rapturous admiration. A textbook written by Clark Kerr and John Dunlop in 1964 noted with pride that "the web of rules becomes more explicit and formally constituted in the course of industrialization. ... The continuing experience of the same workplace tends to result in customs and traditions which begin to codify past practices. Eventually, these may be reduced to writing. ... The statement of rules then becomes more formal and elegant, particularly as specialists are developed in rulemaking and adminstration. The process of industrialization thus brings more and more detailed rules and a larger body of explicit rules. ... "

Under the Wagner Act, management manages. What the union does is complain, and negotiate for a rule limiting management's right to do what the union doesn't like. A worker protests that his job should be classified as "drilling special and heavy" instead of "drilling general." The parties butt heads, a decision is reached, and a new rule is deposited like another layer of sediment. At some GM plants, distinct job categories evolved for each spot on the assembly line (e.g., "headlining installer"). In Japanese auto plants, where they spend their time building cars instead of creating job categories, there is only one nonsupervisory job classification: "production."

Yes, faced with successful Japanese rivals, Detroit and its union have been trying to reduce the number of work rules--but the process has been slow, like pulling teeth, especially because the UAW defers to its locals, New Republic's Jonathan Cohn:

"Ford led the way years ago by reaching site-specific "competitive operating agreements" with locals at different plants, rather than sticking to one national agreement."

Cohn's trying to put the best face on things. But of course it would be much simpler to wipe out work rules in one national agreement--if Ford could do it. Thanks to the UAW's structure, it has to negotiate plant-by-plant. Who's going to win the race--Ford, or a foreign carmaker that can set up a factory in a green field and not have to deal with any of the UAW's preexisting work-rule chazerai?

That's why Democrats are deluding themselves if they think they can save Detroit by mandating that GM and Ford built high-MPG small cars in the U.S.--thanks to inefficient work rules, they'll be overpriced high-MPG small cars, and badly built high-MPG small cars. That's why Republicans are deluding themselves if they think a wage cut that saves Ford and GM $800 per car is going to make all the difference--it won't, if the trim still falls off and the carpets bunch up.

Sen. Corker's proposed bailout compromise apparently did try to tackle the issue of work rules. But the UAW balked at the Corker requirements (which would also have cut pay to parity with Toyota and Honda's U.S. factories) and the deal collapsed. That shouldn't be a surprise. A "web of rules" is what adversarial Wagner Act unions were designed to produce. ... 1:54 A.M.

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