Daily Archives: July 17, 2011

Has anyone heard of due process?: Politicians condem NLRB over complaint filed against Boeing

Unions and the rights of their workers are being trampled on, when is it going to stop? Maybe after work conditions and wages are returned to their pre-1920’s standing and the return of the “Robber Barons” who lined the pockets of political cronies to looked the other way.

By Ross Eisenbrey, Economic Policy Institute Vice President
posted from The Hill’s Congress Blog

The National Labor Relations Board (NLRB) recently filed a complaint against the Boeing Corporation based on evidence that Boeing moved work away from Washington State as punishment for the employees having exercised their legally protected right to strike. Politicians who either don’t know the law or don’t care about it have condemned the NLRB, including Mitt Romney and his fellow Republican candidates for President. They want to rile up the business community by painting the decision as the President’s, even though it was made by a career government employee on behalf of an independent agency outside the President’s control.

Various senators and congressmen are now trying to influence the Labor Board’s ultimate decision, which is not a policy decision but an adjudication. The law and policy were provided by Congress in 1935 when the National Labor Relations Act was passed by Congress and signed by Franklin Roosevelt. The NLRB’s only responsibility is to apply the law to the facts of this case, an undertaking that should be free from political influence or intimidation. And yet a growing number of legislators are threatening to slash the NLRB’s budget and punish its General Counsel if the case proceeds in the manner proscribed by statute.

This attack on the NLRB is political and self-interested. After all, the NLRB’s administrative law judge has not even held a trial yet. The only decision that has been made – and all legal scholars agree it was defensible – was by the General Counsel in response to a charge brought by the International Association of Machinists that there was good cause to believe that Boeing had violated the law. In other words, the union provided enough evidence of Boeing’s motivation that a trial in the matter is justified.

The members of the NLRB will not even review the case unless and until the trial judge’s decision is appealed. So all the howling about the NLRB’s assault on capitalism and free enterprise is premature, to say the least.

Sadly, the political pressure is having an effect already. Even Democrats are racing to say that, of course, business has the right to relocate anywhere it wants to, even to a so-called right-to-work state like South Carolina. And they’re right, up to a point.

Businesses are free to relocate to other states or countries. South Carolina has been a stop-over for businesses relocating from the north for decades; many companies, from textile manufacturers to furniture companies and paper processors, often go on to countries like China after absorbing the tax breaks and other subsidies South Carolina offers them. Unions are rare in South Carolina, but independent unions in China are actually illegal, and wages are even lower in Chinese textile plants than in Gaston or Winnsboro.

But the motive for a relocation matters. Moving for cheaper labor is legal. But closing a plant in Los Angeles and moving to North Dakota to avoid hiring Hispanics or African Americans is not legal. Shutting a factory in New York and moving it to South Carolina to avoid hiring Jews or Muslims would not be legal, either. One can imagine other illegal motivations, but the point is that we reasonably limit relocations when they violate laws. In Boeing’s case, the bad motive that has been alleged is a desire to punish the machinist union members for exercising their legally protected right to strike. E-mail traffic among Boeing managers is alleged to show that it was due to the desire to punish the Washington State Boeing workers for having engaged in lawful strikes that airline production work was transferred. Congress has prohibited job decisions based explicitly on unlawful animus, whether it’s hostility to blacks, women, Mormons, Muslims, Jews or unions. Instead of browbeating the neutral prosecutor and judge, why not let them do their jobs and apply the law to the facts? We used to call that due process.

Ross Eisenbrey is a lawyer and former commissioner of the U.S. Occupational Safety and Health Review Committee. He has been vice president of the Economic Policy Institute since 2003.

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Filed under Boeing Corp, Congress, Congress Blog, Franklin D. Roosevelt, labor unions, National Labor Relations Board(NLRB), North Carolina, Republican Candidates, right to work, The Hill

On income taxes and job creation, history debunks GOP views

By Star-Ledger Editorial Board
Sunday, July 17, 2011

We’re used to politicians stretching the truth, but this is getting ridiculous. For months now, congressional Republicans have refused to support any debt ceiling and budget deal that would raise taxes on the wealthy because, these economic wizards tell us, the rich are “job creators.”

Tax increases would discourage these job genies from expanding their businesses. Unemployment, already at 9.2 percent (which says something about the job-creation myth, doesn’t it?), would get even worse, they insist. The problem with this economic philosophy? It’s garbage.

Even Warren Buffett, one of the richest men in the world, knows that: “The rich are always going to say, ‘Just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you.’ But that has not worked the last 10 years, and I hope the American public is catching on.”

The American public, it seems, is catching on, even if Republicans want to twist the truth about that, too. Speaker of the House John Boehner keeps insisting, “The American people don’t want us to raise taxes.” House Majority Leader Eric Cantor says, “This economy is ailing and we don’t believe, nor do the American people believe, raising taxes is the answer.”

Think again. Americans believe Congress should raise taxes on the wealthy.

A new Quinnipiac survey asked voters if they support a budget deal with only budget cuts or a blend of cuts and taxes on corporations and the rich. Only 25 percent said cuts only. Sixty-seven percent want cuts and a tax increase on the wealthy.

Republican leaders are not only misrepresenting what the American people want, they’re covering up Republican numbers, too. In a recent Gallup poll, only 26 percent of Republicans favored lowering the debt with cuts alone. In just about every poll — ABC News, Washington Post, Bloomberg, Reuters — Americans want spending cuts and they want the wealthy to pay a larger share.

But maybe the American people are wrong. Let’s check the history. Did giving the wealthy a break with the Bush tax cuts of 2001 and 2003 help create jobs? Uh, no. From the end of the 2000-01 recession, just when the first Bush tax cuts took effect, until the beginning of the Great Recession, the economy grew at a slower pace than in any postrecession recovery period since World War II. Pay, adjusted for inflation, fell. And it took 39 months to get the number of jobs back to where it was before the 2000-01 recession.

Despite the same promises of jobs, the economy limped along. And the additional tax cut in 2003 didn’t rev it up, either.

President Bill Clinton faced vociferous opposition to his 1993 budget plan, which raised the top tax rates from 31 percent to 39.6 percent. Republicans called it the “Kevorkian Plan.”

So, what happened? Unparalleled economic growth. The nation’s unemployment dropped from 6.9 percent to 4 percent. The deficit shrank, and in 1998, the federal government boasted a surplus for the first time since 1969.

It seems the economy can survive a tax hike on the wealthy after all. And the tax hike did wonders to reduce the deficit as well, as designed.

More evidence: During the 1950s and early 1960s, when America experienced sustained growth, marginal tax rates on the rich were the highest they’ve ever been — 91 percent for the top bracket. (Even President Ronald Reagan, the Republican economic poster boy, raised taxes after he cut them.)

But Republicans keep chanting the same nonsense — without offering historical evidence to back it up. Instead, they want to bring the nation to the brink of default while protecting corporations (who are sitting on billions in profits) and fat cats — while everyday Americans are squeezed by high gas and food prices, plunging home prices and lower wages.

Let’s call the job-creator stuff what it is: a myth.

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Filed under Bill Clinton, Bush Tax Cuts, Congressional Republicans, Conservatives, debt limit, editorial, Eric Cantor, great recession, John Boehner, President Obama, tax cuts, the Star-Ledger, unemployment

Want to avoid another Depression? Try understanding the first one.

By Robert S. McElvaine
the Washington Post /published July 10th,2011

“I have seen the future, and it works,” journalist Lincoln Steffens famously said of his 1919 visit to Bolshevik Russia. Guided by his economic faith, Steffens saw the future as he wanted it to be, not as it would be.

What excuse do we have when we follow people who, guided by a different economic faith, see the past as they want it to have been, not as it was? Today, under the influence of leaders blinded to facts by certain faith, we are careening toward a repetition of mistakes that led to catastrophe.

A CNN poll conducted in June found that almost half of Americans now think that another Great Depression is “very likely” or “somewhat likely” to occur within the next 12 months.

There is a genuine danger that the already weak economy could turn into a second coming of the hard times of the 1930s. The focus of many politicians today on cutting spending and avoiding tax increases on the wealthy is based on a misunderstanding of what led to and extended the Great Depression — and it is setting us up for a new collapse.

Most people realize that a failure to raise the debt ceiling could be catastrophic. But the drastic cuts in federal spending that some Republicans are demanding in exchange for an increase in the debt ceiling would be a repeat of the mistakes that prevented a full recovery in the 1930s and then caused a secondary collapse in 1937.

With the economy in a precarious position, slashing spending, concentrating ever more wealth and income at the top, and blocking effective regulation is a
prescription for disaster.

In fact, the first part of this prescription is very similar to one written by Dr. New Deal himself. Fearful of massive budget deficits, President Franklin Roosevelt cut back on spending as soon as his 1936 re-election was secured, plunging the economy into a renewed free fall that introduced the word “recession” into our lexicon so as to avoid calling the collapse a renewed depression.

Yet that is the course upon which a unified Republican Party is insisting. For their part, President Barack Obama and many Democrats have ceded the battlefield and are just trying to reduce the number of casualties.

Conservatives appear to be united behind a set of beliefs that are dangerously wrong. Theirs is a faith-based economics that contrasts with fact-based economics; their god is named the Market. Their economics is as immune to facts as its opposite, Marxism. Call it Marketism. A devout Marketist believes that the Market is always right and any government intervention is, well, sinful.

For more than two generations, the Great Depression discredited this religion. But beginning around 1980, with the election of Ronald Reagan, the Marketists staged a revival.

One of my students brilliantly, if accidentally, captured the essence of this economic fundamentalism in a journal entry a few years ago: “During his presidency, Reagan implemented sloppy-side economics.” It is that sloppy-side economics that conservatives have been pushing ever since, and the more it fails, the harder they push it.

During the Great Depression, Roosevelt called for “bold, persistent experimentation” and said: “It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”

But the position of faithful Marketists, then and now, is this: Take their method and try it. If it fails, deny its failure and try it again, and again, and again. But above all, keep trying the same thing.

Since the beginning of the Obama administration, Republicans have been working unstintingly to misread the history of the Depression and implement policies similar to those that led to the collapses of 1929 and 2008. “One of the good things about reading history is you learn a good deal,” Senate Minority Leader Mitch McConnell, R-Ky., declared early in 2009. “And we know for sure that the big spending programs of the New Deal did not work. In 1940, unemployment was still 15 percent. And it’s widely agreed among economists that what got us out of the doldrums that we were in during the Depression was the beginning of World War II.”

Well, yes — but that fact demonstrates just the opposite of what Marketist fundamentalists argue.

It is plain that the reason the New Deal failed to end the Depression is not that Roosevelt and Congress overspent, but that they underspent. The New Deal was not too reckless in its spending; it was too cautious. The war ended the Depression precisely because it obliged Roosevelt and Congress to spend greater and greater amounts without worrying about where the money was coming from.

The basic reason that the Obama administration has not yet ended the economic disaster it inherited is the same reason that prevented the New Deal from ending the Depression FDR inherited: It hasn’t spent enough. The 2009 stimulus staved off a
second Great Depression, but it should have been much larger to produce a genuine recovery. Subsequently, even with majorities in both houses, the Democrats let the GOP define the argument and failed to force through needed programs to get the economy back on its feet.

It has been the alleged “socialism” of the New Deal that has prevented another Depression for seven decades. While a market-based economy is clearly the best system, it carries serious risks. Government intervention minimizes those risks for businesses and for people — just a spoonful of “socialism” helps the capitalism go up.

“History doesn’t repeat itself, but it rhymes,” Mark Twain is said to have remarked. To the extent that our current history sounds like the 1930s, it is because of the lack of sense on the part of politicians. We know better than to slash spending and allow the rich to become even richer in a weak economy, but we’re set on doing it anyway.

If there is a new Great Depression, it won’t be without rhyme, but it will be without reason.

Robert S. McElvaine, a professor of history at Millsaps College, is the author of The Great Depression: America, 1929-1941.”

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Filed under Bolsheviks, capitalism, CNN, Conservatives, Franklin D. Roosevelt, Great Depression, great recession, Marketism, marxism, repeating history, Ronald Reagan, socialism