Freitag, 12. September 2008
Donnerstag, 11. September 2008
9/11 blogging by requirement
Posted on 11:45 by david
Future conversation with The Abstracted Daughter:
TAE: "six years before you were born a horrible catastrophe occurred that forever changed America."
TAD: "9/11? Boring! We learned about in history class. Dad, did you know that the number of Americans killed in 9/11 was 3,000 but the number of Americans killed in the Vietnam war was 20 times that? Almost 60,000 people! And the number of Americans killed in World War II was 150 times the number killed in 9/11; 450,000 Americans!
TAE: Yes, I know.
TAD: So why is 9/11 such a big deal?
TAE: Um.
James Fallows on 9/11:
On November 2, 2001, a driver on the Washington Beltway cut me off in traffic and gave someone else the finger. I remember the date because I thought, The 9/11 era is over.
In fact, the 9/11 era was both transitory and permanent. The political moment in which the United States could have done anything to address basic problems—notably, reliance on imported oil, which then cost about $25 per barrel—was gone within six months. Other consequences of 9/11 will stay with us. It is hard to imagine when airline travel will be “normal” again, or when no American troops will serve in Iraq.
For several years after the attacks, saying that a policy or idea reflected “pre-9/11 thinking” could end the discussion. But by 2005, some people, mainly academics, began arguing carefully that too much alarm over possible terrorism could be self-defeating. They said that 9/11 was a moment of unprecedented shock for America but did not overturn every previous principle of how the United States should deal with other nations or preserve its own liberties.
Early last year, a British Cabinet member announced that his government would stop using the term war on terror, because it united and perversely dignified disparate terrorist groups. The U.S. electorate made essentially the same decision this year, in rejecting Rudy Giuliani’s bid for the presidency. His approaches to economic, legal, and foreign-policy questions all began: “On 9/11 … ” Seven years afterward, that is no longer enough.
I remember exactly where I was the morning the Twin Towers were hit. Most of us do. But I also remember exactly where I was when I kissed a girl the first time, I remember exactly where I was when I graduated high school, I remember exactly where I was when I got my acceptance letter to college, and another acceptance letter to graduate school. I remember exactly where I was when I asked Mrs. Abstracted Engineer to be my wife, and I remember exactly where I was when The Abstracted Daughter was born. I remember exactly where I was when I first truly believed in God and I remember exactly the bench I was sitting on at Tall Oaks Church Camp on a Thursday night when I finally accepted Christ into my life.
The point is, events, good or bad, mark our lives like signposts. But they are the past; we live, and we learn, and we move on. If we let the bad events supercede the good and let them define our actions and overshadow our lives, if we allow them to fester inside us and dictate who we are, then we lose something of what makes us humans: the ability to rise from the ashes and rebuild ourselves from within, better than before.
Did 9/11 make us stronger? Sometimes I would argue yes, sometimes I would argue no. Personally, no setback in my life has truly made me stronger until I learned from it, and learned to smile again.
TAE: "six years before you were born a horrible catastrophe occurred that forever changed America."
TAD: "9/11? Boring! We learned about in history class. Dad, did you know that the number of Americans killed in 9/11 was 3,000 but the number of Americans killed in the Vietnam war was 20 times that? Almost 60,000 people! And the number of Americans killed in World War II was 150 times the number killed in 9/11; 450,000 Americans!
TAE: Yes, I know.
TAD: So why is 9/11 such a big deal?
TAE: Um.
James Fallows on 9/11:
On November 2, 2001, a driver on the Washington Beltway cut me off in traffic and gave someone else the finger. I remember the date because I thought, The 9/11 era is over.
In fact, the 9/11 era was both transitory and permanent. The political moment in which the United States could have done anything to address basic problems—notably, reliance on imported oil, which then cost about $25 per barrel—was gone within six months. Other consequences of 9/11 will stay with us. It is hard to imagine when airline travel will be “normal” again, or when no American troops will serve in Iraq.
For several years after the attacks, saying that a policy or idea reflected “pre-9/11 thinking” could end the discussion. But by 2005, some people, mainly academics, began arguing carefully that too much alarm over possible terrorism could be self-defeating. They said that 9/11 was a moment of unprecedented shock for America but did not overturn every previous principle of how the United States should deal with other nations or preserve its own liberties.
Early last year, a British Cabinet member announced that his government would stop using the term war on terror, because it united and perversely dignified disparate terrorist groups. The U.S. electorate made essentially the same decision this year, in rejecting Rudy Giuliani’s bid for the presidency. His approaches to economic, legal, and foreign-policy questions all began: “On 9/11 … ” Seven years afterward, that is no longer enough.
I remember exactly where I was the morning the Twin Towers were hit. Most of us do. But I also remember exactly where I was when I kissed a girl the first time, I remember exactly where I was when I graduated high school, I remember exactly where I was when I got my acceptance letter to college, and another acceptance letter to graduate school. I remember exactly where I was when I asked Mrs. Abstracted Engineer to be my wife, and I remember exactly where I was when The Abstracted Daughter was born. I remember exactly where I was when I first truly believed in God and I remember exactly the bench I was sitting on at Tall Oaks Church Camp on a Thursday night when I finally accepted Christ into my life.
The point is, events, good or bad, mark our lives like signposts. But they are the past; we live, and we learn, and we move on. If we let the bad events supercede the good and let them define our actions and overshadow our lives, if we allow them to fester inside us and dictate who we are, then we lose something of what makes us humans: the ability to rise from the ashes and rebuild ourselves from within, better than before.
Did 9/11 make us stronger? Sometimes I would argue yes, sometimes I would argue no. Personally, no setback in my life has truly made me stronger until I learned from it, and learned to smile again.
Mittwoch, 10. September 2008
You heard it here first.
Posted on 07:15 by david
Dienstag, 9. September 2008
Fannie-Freddy and Bush is a socialist
Posted on 19:44 by david
3o years ago, if you wanted a $45,000 house, you showed up at the bank with $9,000 or they showed you the door. A 20% down payment was pretty standard for first-time home buyers and refinancing was fairly rare.
Also rare was "using your homes equity" to fund a bass boat and a 2-week trip to the Bahamas, but that is neither here nor there.
The main reason Fannie and Freddy went broke was because they lent huge sums of money to people who should not been given it. And who told Fannie and Freddie to lend that money so frivolously? Why, George Bush of course.
The following are excerpts from a Bush speech in 2002 that coincide with the start of the shady lending and wild mortgage practices that are now causing so much chaos.
Bush: "Let me first talk about how to make sure America is secure from a group of killers, people who hate -- you know what they hate? They hate the idea that somebody can go buy a home."
Bush is making the obvious point that terrorists hate realtors more than any other group of people, becuase realtors aid in the infidel practice of home buying.
Bush: "I believe when somebody owns their own home, they're realizing the American Dream. They can say it's my home, it's nobody else's home."
Bush accidentally mistakes the American Dream for the Third Amendment to the Constitution.
Bush: "Five-and-a-half million [more] families by 2010 will own a home. That is our goal. It is a realistic goal. But it's going to mean we're going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well."
What he is saying here is that not only will the private sector do whatever they have to do to get 5.5 million families mortgages, but the Federal Government will also help by buying out any mortgage companies that go belly-up when all that lent money dries up.
Bush: "Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying."
He's so right! High down payments are a lender's way of guaranteeing that the monthly payment will be low enough that lendee won't default on the loan. By keeping the down payment high, the bank also protects itself in case of a foreclosure by having a large initial burst of capital from the lendee that it can use to cushion any losses taken while trying to resell the home. So the high down payments are in effect, protection for the banks against people who couldn't afford the monthly payments. They also protect the person trying to get a loan, as the bank is in effect protecting the applicant from their own demise.
By and large, the decrease of the 20% down payment down to 10%, then 5%, then 0% down on 80/20 loans was the single factor that caused the current housing mess. If you do the math, putting 20% down on a 30-year mortgage effective cuts your monthly payment in half compared to a 0% down loan.
Bush: "There are neighborhoods in America where you just can't find a house that's affordable to purchase, and we need to deal with that problem."
He's exactly right. That is why a person searching for a home drives past those neighborhoods and goes to the neighborhoods with smaller houses and buys one of those. The wrong thing to do is to find a bank that'll loan you an 7/2 adjustable rate mortgage (ARM) so that you can get into a huge house, then hopefully flip it in 5 years before your ARM matures.
Unfortunately, that is what many people did, and the housing market collapse coincided with the maturation of their ARMs. Double Whammy!
And now, for Bush's real kicker: "And so, therefore, I've called -- yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I'm proud to report that Fannie Mae has heard the call and, as I understand, it's about $440 billion over a period of time. They've used their influence to create that much capital available for the type of home buyer we're talking about here. It's in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital."
Wait, what two companies did he say? Fannie Mae and Freddy Mac? Seems like I heard about them in the news lately...yes, it seems I remember hearing that they didn't have anything to do with good capital, but instead with $200 Billion in BAD capital. Capital that I, a taxpayer, am now picking up the tab for.
Of course, the "period of time" Bush was talking about was June 2002 - May 2008, when the two companies cried uncle and rolled over.
Now this is all post-haste, and really, do we need another blogger hating Bush and pointing out that he was best friends with those usurous scoundrels since he got elected, but I want to point out that its still going on elsewhere.
The current housing "aid" bill supposedly helps first time homebuyers by giving them a tax refund equal to 1/10th the total value of their home. So if Mrs. Abstracted Engineer and I bought a $150,000 home, we'd get a $15k credit on our taxes for 2008. Sweet! Free money!
Not so! The legislation stipulates that the refundee then has a grace period of 5 years upon which time, the refund must be paid back in full over the next 7 years.
So let me get this straight, the government is going to help me get a loan I can't afford by giving me free money, then right when I am in the midst of mortgage payments the government will start asking for the money back?
Only in America.
Full speech text here.
Also rare was "using your homes equity" to fund a bass boat and a 2-week trip to the Bahamas, but that is neither here nor there.
The main reason Fannie and Freddy went broke was because they lent huge sums of money to people who should not been given it. And who told Fannie and Freddie to lend that money so frivolously? Why, George Bush of course.
The following are excerpts from a Bush speech in 2002 that coincide with the start of the shady lending and wild mortgage practices that are now causing so much chaos.
Bush: "Let me first talk about how to make sure America is secure from a group of killers, people who hate -- you know what they hate? They hate the idea that somebody can go buy a home."
Bush is making the obvious point that terrorists hate realtors more than any other group of people, becuase realtors aid in the infidel practice of home buying.
Bush: "I believe when somebody owns their own home, they're realizing the American Dream. They can say it's my home, it's nobody else's home."
Bush accidentally mistakes the American Dream for the Third Amendment to the Constitution.
Bush: "Five-and-a-half million [more] families by 2010 will own a home. That is our goal. It is a realistic goal. But it's going to mean we're going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well."
What he is saying here is that not only will the private sector do whatever they have to do to get 5.5 million families mortgages, but the Federal Government will also help by buying out any mortgage companies that go belly-up when all that lent money dries up.
Bush: "Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying."
He's so right! High down payments are a lender's way of guaranteeing that the monthly payment will be low enough that lendee won't default on the loan. By keeping the down payment high, the bank also protects itself in case of a foreclosure by having a large initial burst of capital from the lendee that it can use to cushion any losses taken while trying to resell the home. So the high down payments are in effect, protection for the banks against people who couldn't afford the monthly payments. They also protect the person trying to get a loan, as the bank is in effect protecting the applicant from their own demise.
By and large, the decrease of the 20% down payment down to 10%, then 5%, then 0% down on 80/20 loans was the single factor that caused the current housing mess. If you do the math, putting 20% down on a 30-year mortgage effective cuts your monthly payment in half compared to a 0% down loan.
Bush: "There are neighborhoods in America where you just can't find a house that's affordable to purchase, and we need to deal with that problem."
He's exactly right. That is why a person searching for a home drives past those neighborhoods and goes to the neighborhoods with smaller houses and buys one of those. The wrong thing to do is to find a bank that'll loan you an 7/2 adjustable rate mortgage (ARM) so that you can get into a huge house, then hopefully flip it in 5 years before your ARM matures.
Unfortunately, that is what many people did, and the housing market collapse coincided with the maturation of their ARMs. Double Whammy!
And now, for Bush's real kicker: "And so, therefore, I've called -- yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I'm proud to report that Fannie Mae has heard the call and, as I understand, it's about $440 billion over a period of time. They've used their influence to create that much capital available for the type of home buyer we're talking about here. It's in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital."
Wait, what two companies did he say? Fannie Mae and Freddy Mac? Seems like I heard about them in the news lately...yes, it seems I remember hearing that they didn't have anything to do with good capital, but instead with $200 Billion in BAD capital. Capital that I, a taxpayer, am now picking up the tab for.
Of course, the "period of time" Bush was talking about was June 2002 - May 2008, when the two companies cried uncle and rolled over.
Now this is all post-haste, and really, do we need another blogger hating Bush and pointing out that he was best friends with those usurous scoundrels since he got elected, but I want to point out that its still going on elsewhere.
The current housing "aid" bill supposedly helps first time homebuyers by giving them a tax refund equal to 1/10th the total value of their home. So if Mrs. Abstracted Engineer and I bought a $150,000 home, we'd get a $15k credit on our taxes for 2008. Sweet! Free money!
Not so! The legislation stipulates that the refundee then has a grace period of 5 years upon which time, the refund must be paid back in full over the next 7 years.
So let me get this straight, the government is going to help me get a loan I can't afford by giving me free money, then right when I am in the midst of mortgage payments the government will start asking for the money back?
Only in America.
Full speech text here.
Just by typing the name Britney Spears I'm adding to the problem
Posted on 05:36 by david
Britney wins back custody of kids.
Britney invests large amounts of money in her sons' college funds.
Britney makes triumphant return to VMA's.
Britney drops music biz, will try honest work for a while.
Notice only one of the above is an actual, active link?
But the real problem is that Britney's video for "Piece of Me" won Video of the Year. This video featured Britney mooning "paparazzi" then running around and dancing with blonde women. Didn't Lohan do that in 2006? Isn't the paparazzi theme (and paparazzi in general) getting a bit old?
This video was better than Linkin Park's "Shadow of the Day" with its LA riot undertones? Or Feist's "1 2 3 4" where the entire video was shot in 1 continuous take and the song was all over the television and radio courtesy the iPod nano commercials?
Or, in an ideal, perfect world, Amy Winehouse would win with her song, "Rehab," and then during her acceptance speech (in a brash move of hilarious irony) she'd dedicate the song to Spears.
Britney invests large amounts of money in her sons' college funds.
Britney makes triumphant return to VMA's.
Britney drops music biz, will try honest work for a while.
Notice only one of the above is an actual, active link?
But the real problem is that Britney's video for "Piece of Me" won Video of the Year. This video featured Britney mooning "paparazzi" then running around and dancing with blonde women. Didn't Lohan do that in 2006? Isn't the paparazzi theme (and paparazzi in general) getting a bit old?
This video was better than Linkin Park's "Shadow of the Day" with its LA riot undertones? Or Feist's "1 2 3 4" where the entire video was shot in 1 continuous take and the song was all over the television and radio courtesy the iPod nano commercials?
Or, in an ideal, perfect world, Amy Winehouse would win with her song, "Rehab," and then during her acceptance speech (in a brash move of hilarious irony) she'd dedicate the song to Spears.
Montag, 8. September 2008
Football Anger
Posted on 06:09 by david
Normally I leave the football analysis alone. Sports are overanalyzed anyway, and the last thing we need is another cubicle-jockey talking like he knows stuff.
Plus, my favorite column, Tuesday Morning Quarterback, usually does an effective job of saying what I was thinking about various games.
However I feel morally obligated to rail on Herm "I honor my contract when I want to" Edwards and his inane play calling with 40 seconds left in the 4th quarter. For those readers who were watching other games, underdog Kansas City trailed the New England Patriots by a touchdown late in the 4th Quarter. I had already written "Game Over" in my head and started looking at fantasy stats when all of a sudden KC was on the Patriots 5 yard line thanks to a 65 yard pass. 1st and Goal from the 5 yard line.
"Great!" I thought to myself. "We have Larry (lower your head and bull through) Johnson and Jamaal (downhill, brakeless freight train) Charles behind Damon (the ancient one) Huard, surely the Chiefs will just run a couple running plays and be in. For God sakes, Larry could jump the five yards."
Then I watched my stat-tracker as the Chiefs ran the following: incomplete pass, incomplete pass, run up the middle for no gain, incomplete pass, game over.
What just happened? Anyone with a basic knowledge of Chiefs football knows that Larry Johnson averages 4.5 yards per carry over his prolific career. So all the Chiefs needed was one average run by Larry and they're within a foot of the endzone. And they had four downs to try.
Great play-calling, Herm.
Plus, my favorite column, Tuesday Morning Quarterback, usually does an effective job of saying what I was thinking about various games.
However I feel morally obligated to rail on Herm "I honor my contract when I want to" Edwards and his inane play calling with 40 seconds left in the 4th quarter. For those readers who were watching other games, underdog Kansas City trailed the New England Patriots by a touchdown late in the 4th Quarter. I had already written "Game Over" in my head and started looking at fantasy stats when all of a sudden KC was on the Patriots 5 yard line thanks to a 65 yard pass. 1st and Goal from the 5 yard line.
"Great!" I thought to myself. "We have Larry (lower your head and bull through) Johnson and Jamaal (downhill, brakeless freight train) Charles behind Damon (the ancient one) Huard, surely the Chiefs will just run a couple running plays and be in. For God sakes, Larry could jump the five yards."
Then I watched my stat-tracker as the Chiefs ran the following: incomplete pass, incomplete pass, run up the middle for no gain, incomplete pass, game over.
What just happened? Anyone with a basic knowledge of Chiefs football knows that Larry Johnson averages 4.5 yards per carry over his prolific career. So all the Chiefs needed was one average run by Larry and they're within a foot of the endzone. And they had four downs to try.
Great play-calling, Herm.
Sonntag, 7. September 2008
Boeing Machinist Strike
Posted on 11:02 by david
Unions and strikes are difficult issues for me to resolve because The Abstracted Engineer's father is in a union, however for the most part I am against them.
A little background: Boeing's machinist union, which represents over 27,000 workers in Seattle, Wa, Portland, OR and Wichita, KS is striking because they want a better deal for themselves. Boeing has attempted to negotiate a settlement with the union reps, but the union has overwhelmingly voted to reject any offer and set up picket lines.
The strike could cost Boeing as much as $100 million dollars a day, assuming the strike lasts more than a few days. Boeing offered the machinists a $5,000 dollar bonus, 11% raise plus 3% adjustment for cost of living increase, and benefits increases, so that each employee's total package would be upwards of 34,000 dollars annually. The average machinist at Boeing makes $27/hr, or $56,160 annually. Apparently the union workers want all that, plus more vacation and 401k benefits. So basically the union workers are saying "we want you to pay us more, but we also want to not have to work as many days to earn it, and we want to be able to retire sooner."
Now I'm going to try to remove my bias here because it's hard to feel sympathetic to people who are complaining that they aren't getting paid enough when I get paid a similar amount to them and I have 7 years of college more than they do.
The problem with this strike is that it's stupid. I'm not a heartless money-grubber, and I'm not anti-American, but if I were on the Board at Boeing I would give the machinists the finger and move my factories overseas. In 12 months Boeing could be building their planes in Asia where labor is 1/4th the cost it is here. They would reduce their expenses, increase their profits, and please their shareholders.
"But," you might ask me, "are you advocating abandoning American workers?"
Well I'm not, really. But I do advocate fair wages based on labor quality and difficulty of training, and I find it hard to believe what the machinists are doing is worth what they are making...and even harder to believe it is worth what Boeing offered as a settlement. But greed is a dangerous and awful thing, and with Boeing's back orders totaling over $430 billion, the machinists believe they have a right to some (more) of that money. More than 27 bucks an hour, anyway.
Capitalism works (and works well) because a fair price can be paid for a service or commodity. Labor, it can be argued, becomes a commodity when it's price is negotiated and regulated by a group such as a union. Capitalism also works because you are not forced to pay an unfair price for a commodity. If something is too expensive, people don't buy it. Then the price will inevitably come down.
Milton Friedman argues that increased wages (via union negotiation) actually increases unemployment by decreasing the amount of workers an economy can support.
Simply put: If bananas are 12 cents a piece, and I have a dollar, I can afford 8 bananas. If the bananas go up to 13 cents a piece, I can now only afford 7 bananas, and one banana rots.
On outsourcing: If a banana is worth 12 cents that is one thing. But if I can find a banana seller somewhere else that will sell me 8 bananas at 7 cents a piece, not only am I getting all the bananas I want, but I have 44 cents left over to return to my shareholders. This is how labor unions increase unemployment, and how I believe they are pushing the industrial sector of this country increasingly overseas.
It's not un-American to move your company overseas. CEOs often have no choice, as their longevity at a company is intimately linked to their ability to return a profit to the shareholders. I am sure any God-loving American would prefer to see businesses invest in, and stay in America, but when you are a business administrator, not a political one, your job is to run a successful business.
So if I were a higher-up at Boeing, here's what I would do (I decide this without any intimate knowledge of the legal ramifications):
I'd tell the machinists they're all fired. I would then try to hire new machinists here in the states. If the machinists sued me, I'd counter-sue, claiming that they forfeited their jobs when they stopped coming to work.
If the government stepped in and tried to force me to negotiate with the machinists, I'd sue the government, and claim that government intervention into private enterprise is not warranted when there is no threat to the national GDP, no threat to national security, and no significant decrease in taxable wages. Then I'd have my lobbyists (who believe me, at Boeing the lobbyists know their stuff) tell the members of Congress that if they didn't back off, I'm taking my entire business to Asia. Probably Russia, actually, since Boeing has already promised to spend $27 billion there building up their titanium industry.
A small, kind word for unions before I go. America's economy 100 years ago was such that unions were an awesome idea, when price fixing was not well regulated, workers had no rights, or job security, or retirement plans.
But today isn't 1908, its 2008, and the average blue-collar worker is living better than ever. Modern economics has shown that a labor-union wage increase generally increases inflation and comes at the price of lost jobs...for non-union workers. Boy that's fair.
A little background: Boeing's machinist union, which represents over 27,000 workers in Seattle, Wa, Portland, OR and Wichita, KS is striking because they want a better deal for themselves. Boeing has attempted to negotiate a settlement with the union reps, but the union has overwhelmingly voted to reject any offer and set up picket lines.
The strike could cost Boeing as much as $100 million dollars a day, assuming the strike lasts more than a few days. Boeing offered the machinists a $5,000 dollar bonus, 11% raise plus 3% adjustment for cost of living increase, and benefits increases, so that each employee's total package would be upwards of 34,000 dollars annually. The average machinist at Boeing makes $27/hr, or $56,160 annually. Apparently the union workers want all that, plus more vacation and 401k benefits. So basically the union workers are saying "we want you to pay us more, but we also want to not have to work as many days to earn it, and we want to be able to retire sooner."
Now I'm going to try to remove my bias here because it's hard to feel sympathetic to people who are complaining that they aren't getting paid enough when I get paid a similar amount to them and I have 7 years of college more than they do.
The problem with this strike is that it's stupid. I'm not a heartless money-grubber, and I'm not anti-American, but if I were on the Board at Boeing I would give the machinists the finger and move my factories overseas. In 12 months Boeing could be building their planes in Asia where labor is 1/4th the cost it is here. They would reduce their expenses, increase their profits, and please their shareholders.
"But," you might ask me, "are you advocating abandoning American workers?"
Well I'm not, really. But I do advocate fair wages based on labor quality and difficulty of training, and I find it hard to believe what the machinists are doing is worth what they are making...and even harder to believe it is worth what Boeing offered as a settlement. But greed is a dangerous and awful thing, and with Boeing's back orders totaling over $430 billion, the machinists believe they have a right to some (more) of that money. More than 27 bucks an hour, anyway.
Capitalism works (and works well) because a fair price can be paid for a service or commodity. Labor, it can be argued, becomes a commodity when it's price is negotiated and regulated by a group such as a union. Capitalism also works because you are not forced to pay an unfair price for a commodity. If something is too expensive, people don't buy it. Then the price will inevitably come down.
Milton Friedman argues that increased wages (via union negotiation) actually increases unemployment by decreasing the amount of workers an economy can support.
Simply put: If bananas are 12 cents a piece, and I have a dollar, I can afford 8 bananas. If the bananas go up to 13 cents a piece, I can now only afford 7 bananas, and one banana rots.
On outsourcing: If a banana is worth 12 cents that is one thing. But if I can find a banana seller somewhere else that will sell me 8 bananas at 7 cents a piece, not only am I getting all the bananas I want, but I have 44 cents left over to return to my shareholders. This is how labor unions increase unemployment, and how I believe they are pushing the industrial sector of this country increasingly overseas.
It's not un-American to move your company overseas. CEOs often have no choice, as their longevity at a company is intimately linked to their ability to return a profit to the shareholders. I am sure any God-loving American would prefer to see businesses invest in, and stay in America, but when you are a business administrator, not a political one, your job is to run a successful business.
So if I were a higher-up at Boeing, here's what I would do (I decide this without any intimate knowledge of the legal ramifications):
I'd tell the machinists they're all fired. I would then try to hire new machinists here in the states. If the machinists sued me, I'd counter-sue, claiming that they forfeited their jobs when they stopped coming to work.
If the government stepped in and tried to force me to negotiate with the machinists, I'd sue the government, and claim that government intervention into private enterprise is not warranted when there is no threat to the national GDP, no threat to national security, and no significant decrease in taxable wages. Then I'd have my lobbyists (who believe me, at Boeing the lobbyists know their stuff) tell the members of Congress that if they didn't back off, I'm taking my entire business to Asia. Probably Russia, actually, since Boeing has already promised to spend $27 billion there building up their titanium industry.
A small, kind word for unions before I go. America's economy 100 years ago was such that unions were an awesome idea, when price fixing was not well regulated, workers had no rights, or job security, or retirement plans.
But today isn't 1908, its 2008, and the average blue-collar worker is living better than ever. Modern economics has shown that a labor-union wage increase generally increases inflation and comes at the price of lost jobs...for non-union workers. Boy that's fair.
Abonnieren
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