Mr. President, Detroit Is Your Example of Economic Success? Seriously?

The Columbus Dispatch published a Detroit Free Press article today (see here), and I want to start with this:

[The president] said organized labor is responsible for the rise of the middle class and the core of the economy, and that legislative battles to curb the rights of organized labor are a threat to the nation.

I hear [Republicans are] trying to take collective bargaining away, trying to pass right-to-work laws, I know it’s not about economics. It’s about politics.”

Later in the article:

“We stood by the auto industry and made some tough choices, and now the Big Three are turning a profit and hiring new workers.”

So many thoughts popped into my head as I read this, the first of which: I didn’t think anyone could cram so much wrongness into four sentences! That said, I’ll break down the flaws I see one by one.

[The president] said organized labor is responsible for the rise of the middle class

That’s dubious history, but quite irrelevant even if true. The key question is: what is the role of organized labor today? And how did Japan’s middle class arise in the absence of any significant union presence?

[O]rganized labor is . . . the core of the economy

It’s hard to call organized labor the “core” of the economy when only twelve percent of workers belong to unions. In any event, there is no “core” to the economy! Some sectors may play a bigger role than other, but the economy is a massive, organic, decentralized information transfer system that has neither “head” nor core.

[L]egislative battles to curb the rights of organized labor are a threat to the nation.

Unions have long had extraordinary protections under the law. Apparently the president believes that statutorily-defined benefits for a discrete voting bloc morph into a “right,” given sufficient passage of time. And a threat to the nation? Perhaps Japan’s decade-long malaise isn’t from government debt and poor monetary policy after all, but a non-union work force.

When I hear [Republicans are] trying to take collective bargaining away, trying to pass right-to-work laws

First, Obama was talking primarily to private sector union workers, and the only efforts I know to curb collective bargaining have been in regards to public sector unions. Second, the economies of right-to-work states have consistently out-performed compulsory union membership states for decades. Third, as I explained here, compulsory union membership is probably a human rights violation, and in any event violates our constitutional right of association (or to not associate, in this case).

I know it’s not about economics. It’s about politics.

Every political act has economic consequences, so you’re making a distinction without a difference, Mr. President. Perhaps you meant that it’s not about good economics. But given that you were standing in a city that lost 25% of its population over the last decade, which is in a state that is consistently among the top three in highest unemployment, you must have a funny notion of what constitutes “good” economics.

We stood by the auto industry and made some tough choices

I find it interesting he used the term “tough choices.” It may be that he understands Hazlitt’s lesson from long ago, that if you act to the benefit of one group, you must do so at the expense of others. It’s clear in this case that the bondholders got screwed in the bailout, but there are others that are more difficult to identify. Tough choices meant political favoritism, period.

[A]nd now the Big Three are turning a profit and hiring new workers.

I should hope they’re making a profit with all the tax breaks and subsidies you’re throwing their way!

Anyhow, I have a hard time reading anything from this president (let alone listen to him) because it makes smoke pour out of my ears. Hopefully independent swing voters are beginning to listen, and hopefully they don’t think any of this makes sense.

My biggest fear is that the president thinks it makes sense!

This article is also posted at Country Thinker.

End Note: Apparently LD and I both saw the same article today, although we both picked at different portions!

About Country Thinker

Ted Lacksonen has written 97 posts in this blog.

I am a proud mem­ber of the Coun­try Class — the roughly 75% of Amer­i­cans who have been effec­tively dis­en­fran­chised by the minor­ity Rul­ing Class. As a law stu­dent and lawyer, I trav­eled (uncom­fort­ably) in Rul­ing Class cir­cles. As an HVAC installer, sheet metal fab­ri­ca­tor, and ship designer, I trav­eled (com­fort­ably) in Coun­try Class cir­cles. My expe­ri­ences in these two widely diver­gent uni­verses have given me a dual per­spec­tive that is uncom­mon among writ­ers and thinkers.

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