Friday, February 25, 2011

Union Busting-Another Slice and Dice of the Middle Class

The financial sector screws up and throws the whole world into a recession. The middle class loses millions of job and picks up a multi-trillion dollar tab to save our incompetent economic infrastructure. What should we do next? Let’s use our financial screw-ups as an excuse to bust the unions. We can call them communists or socialists- that always seems to work. Let’s blame the teachers and government workers for the financial shortfall the states are experiencing. And let’s do it now while they are really down and out and desperate for jobs.

I have often wondered just how much abuse the middle class is capable of absorbing from the governing elite. With unjustified wars, an active special interest auction in congress, and the unpunished stealing of trillions from our economy we should have already reached the limit. Because of our numbers and the fact that we do the real productive work of society you would think there would be some caution about overreaching against us. But they seem to have such confidence in their mind control infrastructure they continue to push. Good leadership would be pulling the nation together to resolve our problems. Vilifying teachers and, government workers while attacking unions has the exact opposite effect.

It should be clear by now that the current financial problems are due to national financial sector mismanagement and fraud, not unions. In fact, unions and government worker pension plans suffer the same way that we all have. In hard times they can be expected to make the same sacrifices as all workers.

The union is an important element in our economy. They were strongly pro-America as administrations shipped millions of jobs overseas. Without their influence the individual workers would be on their own against the many billions of corporate dollars dedicated to short term profits. Union workers have the detailed knowledge of facility operations that can be turned into process improvements. When management and the union work cooperatively in trust and professional pride there is potential for many economic benefits. Many facilities miss this opportunity because of an ingrained attitude of confrontation between management and the union.

You have to wonder about the management capabilities of the new Wisconsin government. By picking now as the time for union busting they have transformed a straightforward budget balancing event into a national confrontation. You would expect that they would first try to gain the trust and support of the employees. Instead they now have a demoralized work force of thousands in a trying financial environment.

No matter who wins the battle the nation will be weakened and further divided. In a time when we need to pull the disillusioned middle class back into a national consensus another sector is being split off. There were many ways to cut costs that did not attack collective bargaining.

Thursday, February 17, 2011

Is Washington Serious About Financial Reform?

On December 31, 2010 we reviewed an article in BusinessWeek that discussed the progress on the financial reform bill (aka Dodd Frank) As you remember, the bill passed in July 2010 and was our country’s effort to bring our financial sector under control. The bill as passed had very little clout. Developing the actual standards was passed on to the government regulatory agencies such as the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission ( CFTC). The report confirmed that in the face of the banks and lobbyists very little were happening. The bill was very weak leaving many loopholes still in place.

BusinessWeek seems to be one major media that is following up on this very serious issue. They have just released another update "Starving the Regulators". This article reports the astonishing fact that cost cutting is going to reduce the staffs of the regulatory agencies charged with finalizing the rules. Progress will be further slowed and actually stop in several critical areas. The governing elite create an 11 trillion problem, and then reduce the resources charged with preventing another. The situation is summarized in this quote from BusinessWeek.

The reform of financial regulations has slowed down because of the underfunding of the SEC and CFTC. The Dodd-Frank reform requires 243 new rules, 67 one-time studies, and 22 recurring studies. Yet in the face of these requirements, the CFTC is considering laying off staff. The SEC has had to delay establishing an office to oversee the credit-rating agencies. On the other hand, the Consumer Financial Protection Bureau has hired staff and is focused on making credit cards more consumer-friendly and eliminating 80 percent of the mortgage paperwork needed to purchase a home.
It should be noted that the one agency meeting its schedule is the new consumer protection agency whose establishment was bitterly fought by the financial sector.

The encouraging experience is that BusinessWeek is devoting resources to following this issue. In doing so they are performing a great service to the productive sections of the economy, who are their primary customers. Unlike the financial sector the rest of the economy would greatly benefit from a reformed financial system.

We must remember that the financial sector is different from the general business community. The primary products are basically funded and guaranteed by the government. It was meant to be a service to the productive business areas. Once they began to focus on their individual profits they have become a real liability for the rest of the economy. The current lobbying blitz against reform is aimed at protecting their own profits.

Tea Party, this is really important. Why isn’t the rest of the media active about this situation?

Sunday, February 06, 2011

Egyptian Events Should Give US Governing Elite Great Pause

Just one if the three TV‘s above the bar was showing the Egyptian protests in Cairo. About half of the customers were casually watching. One person finally asked the obvious question.Could this happen in the US?

The answer certainly depends on where you are when you ask the question. The immediate consensus at that time was that our Constitution will act to prevent it. But let’s look a little deeper.

The First Amendment gives “the right of the people to peaceful assembly and to petition the Government for a redress of grievances.” This happens all the time in the US. No problem! But there are more complex questions to be answered.
What happens when the assembly isn’t peaceful?
What happens when the Government won’t address the grievances?
 There is general agreement that those who disturb the peace are subject to all the local and national laws they break. But it is difficult to arrest thousands of people out of millions of protestors. A non- peaceful assembly must be avoided.

A Government that will not address a just grievance is a special and very dangerous case. If non-peaceful assembly becomes a practice in the US, this will be the reason. When the suffering is by the many and the benefits are reserved for the few we are outside the intent of the Constitution. The preamble to the Constitution bears repeating:

We, the people of the United States, in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the blessing of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America
The events in the Mid-East should give the ruling elite spending millions to fight common sense reform in the US government great pause. It is much better to reform early before the protestors are in the streets. This warning is especially appropriate for those active in the financial sector. You definitely fall in the category of “few”. And the “many “are not inclined to defend you. You should be honestly helping us to establish an efficient and reliable system that will return fair profits to the entire productive environment. If we have another financial induced failure you will not skate as easily as you did the first time. By overreaching you are setting both us and your system up for another disaster.

We must show that we can reform now through peaceful constitutional procedures. We don’t want to see citizens forced into the non-peaceful assembly route.