Sunday, February 27, 2011

FDR and unions.

Assorted right wingers and libertarians are claiming justification for Wisconsin union bashing in a quotation from FDR:

"... the process of collective bargaining, as usually understood, cannot be transplanted into the public service."

Our course, this is a quotation out of context. Look in the original letter.

FDR affirms the place of unions in government as well as private industry. He is cautioning against strikes by government employee unions as a tool of collective bargaining the way they are used in bargaining with private industry. Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. He argues that the special purposes of government make them inappropriate. He points out: It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that "under no circumstances shall this Federation engage in or support strikes against the United States Government."

This is not in any way like stripping bargaining rights from unions in government. Indeed, many states have laws that forbid government employee unions from striking, yet still have strong unions that are able to negotiate. It would be more just for those laws to balance the loss of rights to strike with limitations of government abuses of that advantage, but that's not the case that I'm aware of.

Saturday, February 26, 2011


Libertarians are notorious defenders of sweatshops. Kevin Wayne, in a comment, brought up this excellent resource:

A Consensus Statement on Sweatshop Abuse and MIT’s Prospective Actions in Pursuit of International Labor Justice

Thursday, February 24, 2011


Hungarian socialist political economist Karl Polanyi made the antitheical argument to Hayek in the book The Great Transformation. Polanyi wrote that an uncontrolled free market would lead to repressive economic concentration and then to a co-opting of democratic governance that degrades civil rights.

Three generations of human rights

Saturday, February 19, 2011

Why does college cost so much?

At Marginal Revolution, Tyler Cowen puts up a post titled Why does college cost so much?

This is a common right-wing meme, aimed at generating discontent with the intellectual class and used as an excuse to review all the normal libertarian ways of blaming any problem on government. And you can tell, because Tyler and his claque ignore the obvious facts about the market.

First, we know there is a huge market failure because statistics have always shown that the increases in lifetime earning AFTER a college education more than pays for the costs of the education. In an efficient market, the marginal cost of an extra degree should equal the marginal increase in lifetime earnings. That's why it is efficient for society to pay even for the education of the mentally challenged, if you view the expense of caring for them to be reduced by education. We probably should be spending significantly more on education because ignorance is the costly alternative.

Second, the assaults on the middle class and increased demand for highly educated workers have, if anything, made this market failure even larger by continuing to reward education with increased lifetime earnings.

Third, we expect the price to increase until it reaches what the market can bear. That's why private colleges charge such enormous and increasing tuitions.

Fourth, the education market suffers from other fundamental market failures which keep it dominated by non-profit institutions at almost all levels except nursery schools and trade schools worldwide. We've seen innumerable for-profit educational enterprises attempted and fail. It's not "barriers to entry" worldwide. And it's not "barriers to entry" in the USA: private non-profits are started successfully at all levels all the time. State universities, state colleges, and community colleges have enlarged tremendously.

While I often get something interesting out of Tyler's posts, I think of him as employed to keep feeding a steady stream of libertarian propaganda through his blog. Much of the time, all he has to do is point and his commenters complete the task for him. And that's what we see here.

Thursday, February 10, 2011

Ron Paul Versus the Kochtopus.

Monetary Policy Hearing Today, or: Ron Paul Versus the Kochtopus.

From Rortybomb, a brief glimpse into the Rothbardian faction's (paleolibertarians such as Rothbard, Mises, Rockwell, Paul) view of the Kock brothers' faction.

Wednesday, February 09, 2011

Academic tendencies.

"Academic bias" is another right-wing "When did you stop beating your wife" term. Using the term, even in defense, just repeats and ingrains the accusation.

Is there an academic tendency towards liberalism? Very likely, and for the same reason there is a tendency towards liberalism amongst mothers. Both are charged with a non-profit-making task, the development of children into responsible, educated, more independent adults. Both understand that they need to get the resources for this task from others without shackling the children into servitude in exchange. That means redistribution, bane of conservatives.

Some people have noticed that economics has the most conservative academics of all. Small wonder: economics departments have been the special recipients of conservative-funded welfare for long periods of time. The U. of Chicago and George Mason University famously have capitalist-funded economics departments, and the financial industry is a notorious funder of economics research. There is nothing comparable on the liberal side. There is a huge feeder system for conservative economics, with vast amounts of public propaganda promoting "free markets", chambers of commerce, innumerable think-tanks, and outreach programs to exceptional students that is unparalleled by moderates or liberals.

Saturday, February 05, 2011

The biggest pot of money in the world.

About thirty years ago, it occurred to me that the baby boomer's retirement savings would be the biggest pot of money that the world has ever seen. It would consist primarily of (a) savings and investment (b) home ownership and (c) social security: the "tripod" system (that we used for nuclear deterrence as well, with bombers, submarines, and ICBMs.)

Using this simplistic model, I predicted for myself that there would be bubbles in investments as demand for retirement investments grew bigger and bigger. I was right. I didn't forsee bubbles in housing: I'm not that economically astute. And we've all witnessed decades of conservative and libertarian attempts to plunder Social Security by reducing obligations or abolishing it.

The problem with a pot of money is that everybody else wants to take money out of it. This has been very successfully done with investments as 401K's became 201K's with stock market bubbles. Even with a conservative portfolio of money market funds and index funds, I have lost money over the past decade, and I am not unusual. The boomer's retirements are being systematically pilfered in the investment system; they are averaging below market growth, negative growth when inflation is taken into account. Likewise, the recent housing bubble has taken a huge hunk of boomer retirement assets.

Where is the anger? This is the greatest opportunity for rebuilding a liberal movement in opposition to conservatism that we've had in decades. Unlike tea party themes, this one is valid.

In addition, we're shorting the intergenerational compact by shorting funding for the needs and development of children. We are horribly and predictably underfunding investment in education by reducing public funding of higher education and public education. No other developed nations are so shortsighted. The beneficiaries of these awful policies are not other generations: this is class warfare by the super rich who have been promoting these policies for decades.