Why Public-Sector Unions Must Be Rendered Felonious
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-11-13 09:17
by Karl Denninger
in Editorial
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Why Public-Sector Unions Must Be Rendered Felonious
 

From the mailbag comes a lesson in economics that touches on the inevitable friction between management and labor; the always-present friction that ultimately drives business forward.

Hostess Brands Inc. is permanently closing three bakeries following a nationwide strike by its bakers union.

We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage — and that we will close the entire company if widespread strikes cripple our business,” Hostess Brands CEO Gregory F. Rayburn said.

This is how it works folks, and we should applaud the market when it makes these decisions.

Labor always wants to be paid as much as is possible for its effort.  Manangement wants to pay as little as possible for the same effort.  The market guarantees a clearing price; below that and labor refuses to work, above it and management refuses to pay.  If either party attempts to push the transaction boundary beyond what can be accepted there is no transaction at all and the result is the closure of the business. 

That failure of negotiation costs both management and labor; labor loses its job and income, and management loses its job and income.  The consequence is identical and this is entirely rational, ordinary, expected and proper.

I don't know if there is a "factually wrong" position in this particular dispute but it doesn't matter if there is or isn't a "factually wrong" party.  All that matters is that there is no meeting of the minds and thus no trade takes place.  The market performed its function of matching buyers and sellers and finding no meeting of the minds between the two sides no transaction occurs.

Now consider the situation where the service or good in question is compulsory, such as "constitutionally-guaranteed" public schools.  In this case there is no market because there is no factual ability to walk off by management, despite the averred claim that there is that occasionally results in strikes.  Since the Constitution of the state in question requires the provision of the service and worse, the people doing the negotiating for management are hired through voting, and the union members are able to vote there is no adversarial procedure at all!  Both sides of the table are in fact represented by the same people and this turns what was a market function into effective and factual theft from all who are not union members.

Theft is wrong and in fact a crime. 

Therefore, public-sector unions are criminal enterprises and as they are organized criminal enterprises they must be prosecuted under Racketeering Laws and their membership and leaders imprisoned.

Discussion below (registration required to post)
 

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User Info Why Public-Sector Unions Must Be Rendered Felonious in forum [Market-Ticker]
Shannonlk1
Posts: 108
Incept: 2008-12-02

Raleigh
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For people that support unions, they seem to think that businesses/government are in business to pay them. Which is not the case. they have destroyed how many airlines? How many times have they taken down GM and Chysler? One of the reasons why Europe is in its situation is because of the damned unions. There was a time when they were needed to protect the employees from human rights abuses. But that time is long past. GM and Chysler will fail again because of them. It is also a reason(not the only reason) why so much has moved over seas. Until that mind set changes America will continue to lose jobs. I wished that had shot GM down for good then we would see how the Auto union would feel. An business should make it real simple proest all you want but if you do not show up for work(with no valid reason), you get fired end of story. Thre are too many people that want jobs for unions to try to control a company that they do not own.

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Criminals thrive on the indulgence of Society's understanding.

Bagbalm
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Just North of Detroit
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Unions stop protecting workers as soon as the top union official no longer works on the factory floor and goes upstairs to crawl in bed with management.
Bertdilbert
Posts: 2653
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Gold
CA
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Here is one that made my blood boil. The carpenters union in CA had two prices. One price for the government and one price for "private party contracts" I don't really follow this and do not know how deep it goes and this was from about 10 years ago.

In CA the union price is the price by state law. So if public money is used, then the union price is what the government says contractors have to pay when conducting the work. In the case of drywallers, the union had a lower wage for private party contracts in order to allow union companies to compete in the private sector. So the government paid the highest possible union price for labor on drywall work while a separate lower wage existed for private party work.

Private party is anybody not government.

But here is the kicker with construction unions. Their work is mostly for the government. But they have no contract with the government, only contractors who work for the government. And the contractors have to pay what the government says.

The union could say that a worker is a million dollars an hours, the contractors could say OK and the government would have to pay it where states and cities have passed law saying the union wage is the "prevailing wage".

If you can't see the potential for abuse here... But never mind all that, the government is bought off by the unions. It is a vicious cycle where the common man is getting reamed up the butt and in effect paying "union dues" for nothing.

Public unions and construction unions are nothing but a tax on you. All those bond issues? The highest possible union wage FINANCED. Hey, let's go broke at light speed! All those health and welfare benefits financed? Yep.

But then all the pension money is now in underfunded plans anyway so you are a long way from seeing the total bill for this nonsense.


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Dear Euroland: Relax, Germany has a plan for your money!

Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
Genesis
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Throw them all in jail.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Jb350
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"we will close the entire company" ouch! Frickin owww. "How dare that insolent peasant. I voted for Obama, how dare you threaten us! We shall take over your business and throw you in the gulag. Make it so!"

Dont they wish.
Trades50
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GM is a good example where unions got out of hand.

I used to hear of stories of shop management being afraid of going in the factory. The unions took control of US auto industry. It took bankruptcy for the unions to release control.

The public unions now are the same way. They have taken over control of the public jobs.

Look at California now. The unions won a vote and so the citizens will be taxed to insolvency.

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When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson
Genesis
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My father was the Controller for a glass company that was literally destroyed by labor unions.

There is a place for unions and in the private sector when they exceed their useful value what happens is what happened there -- the company goes under and everyone loses their job, management and labor alike. That's the price of being an *******, basically, and it's just as it applies to both sides.

There has to be a price to being an *******.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Mcmwest
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Western Kansas
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When I was a highschool senior I had a job at a grocery store where the workers had to be a member of the union to work. (Ohio is not a right to work state) The union (AFL-CIO) took $35 of my pay each month which was about 25% of it if I remember correctly (late 70s). They then supported political candidates that I detested and even sent a "voter guide" to all members. As I saw it they were using my money to influence an election against my beliefs. I quit what otherwise was a good job for a HS kid. I'm not sure that unions have been needed during my lifetime. They have strayed way to far from the original intent.

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According to NBER the recession ended in June 2009 so if you're broke and out of a job its all in your head.- Jay Leno
Lowbeyond
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Unions, and all of their members are Scum.

You have a right to free association, the union part, that is fine. Knock yourself out. Zero issue here.

However, you do not have a right for compulsory association aka you must join our group and pay us if you wish to work in this industry X

Nor do you have a right, after forming a voluntary association, to force other people which are not part of your org to negotiate with you under penalty of fine and death.

Just another set of people who get laws passed and get others to point guns at _other_ people in order to get what they want.

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Maybe it was a birdy bread-bomber from the future?!
Eaglewwit
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Check out some of the union troll comments.
Dramsey
Posts: 79
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I'm not sure if you are aware of it, but this is the exact same argument that FDR (of all people!!) made against public sector unions.
Eaglewwit
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The entire Obama stimulus was nothing more than a payoff to unions, especially the public sector scumbags.

Good people in CA have tried to open the public's eyes to these union scumbags. However after the last election it is obvious that the combination of union money and power with the stupidity of the electorate (See my General Theory of Stupidity Thread) will sink the state and eventually the nation.
Genesis
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Dramsey: Truth just is, you know, and when you start looking for the truth it has this inerrant way of popping up no matter who does the looking.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Eaglewwit
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Can't show up soon enough Gen.
Xqqme
Posts: 625
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Green
Ohio
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Hostess filed Chapter 11 Jan 2011.
Judge Drain gave the Union this warning

From- http://www.teamster.org/sites/teamster.o....

“In particular, I conclude that while I cannot prevent a strike – although, again, it is not
clear to me whether there might be economic consequences of a strike after having imposed
these terms -- the threat of a strike is something that I believe should not outweigh
the relief that's granted here. In particular, separate and apart from the IAM, it's clear to
me that calling a strike by any of the other unions would be the equivalent of shooting
oneself in a serious body part and result in liquidation of the company.” (p. 273)
- Hostess warned earlier this month that the strike, by about 30 percent of its workforce, could lead to bakery closures. It said Monday that it will close bakeries in Seattle, St. Louis and Cincinnati that collectively employ 627 workers.
The workers believe there was no risk to striking. That another alternative was available for them to keep their jobs. And now with Obama re elected, that could happen. The trend is toward 'Employee owned businesses'. Obama said he would return the wealth to its rightful owners, wants to do to other businesses what he did to the auto industry, etc. Can you imagine actually running a real business without any personal risk?
'Worker ownership for the 99%' funded entirely by the us govt who is a pro at this. Privatizing the profits, socializing the risks, just on a wider scale.
"We pretend to work, they pretend to pay us!" Old Soviet Worker quote.

Bertdilbert
Posts: 2653
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CA
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IMO the president has no business meeting with unions.

A White House official has confirmed POLITICO’s list of CEOs scheduled to attend a meeting Wednesday with President Barack Obama on the fiscal cliff, and sent over the list of union and progressive leaders who will sit down with him Tuesday:

•Mary Kay Henry, SEIU
•Lee Saunders, AFSCME
•Dennis Van Roekel, NEA
•Rich Trumka, AFL-CIO
•Neera Tanden, Center for American Progress
•John Podesta, Center for American Progress
•Bob Greenstein, Center for Budget and Policy Priorities
•Laura Burton Capps, Common Purpose Project
•Max Richtman, National Committee to Preserve Social Security and Medicare
•Justin Ruben, MoveOn
•Deepak Bhargava, Center for Community Change

This list hits many of the major unions and liberal organizations that are urging the president to hold firm on his commitment to end tax cuts for wealthier families and to protect major entitlement programs.

Note he meets with the unions the day before meeting with the CEO's. We know where the priority lays. This was the primary difference between Romney and Obama.

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Dear Euroland: Relax, Germany has a plan for your money!

Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
Pookie
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Florida
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In my youth, and somewhat longer than I care to admit, I used to think unions were great. Norma Rae was one of my favorite movies. I have since come to know better and hate unions...especially public sector unions...with a passion.

Yes, I really don't see how what they're doing can be legal. If it's not legal, how can it be said that there's nothing we can do about it and have to go along and pay whatever they demand?

"they must be prosecuted under Racketeering Laws and their membership and leaders imprisoned."......I'm all for it. How can we get this ball rolling?

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Once you admit that the individual is merely a means to serve the ends of the higher entity called society or the nation, most of those features of totalitarian regimes which horrify us follow of necessity. --F.A. Hayek
Mpilar
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Nashville, TN
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Quote:
The trend is toward 'Employee owned businesses'. Obama said he would return the wealth to its rightful owners

So many people believe, that corporations exist to give jobs to people...smiley

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Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats. H. L. Mencken
Jpg
Posts: 329
Incept: 2009-03-23

MI
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It's said that the purpose of private-sector unions is to protect the employees from eeeeeevil corporations.

Does that mean that the purpose of government-employee unions is to protect the employees from the eeeeeeeeevil taxpayers?
Tsberts
Posts: 2350
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Gold
Minnesota
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Eight years ago I started a four-year term as an elected school board member. I was shocked and dismayed to learn that, in Minnesota, the school district is obligated by law to have a contract in place with the teachers' union by January 15. If the contract is not finished, the district pays a fine of $5,000 per day to the state.

As a consequence, the union has NO MOTIVATION to negotiate on any terms of their contract before January 15. They have nothing to lose, and the longer they hold out, the more the district pays. What a ridiculous system.

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Photoguy was an optimist.
In Soviet Russia, the banks are run by the politicians.
The cancer within the federal government has metastasized, it's now up to each of the states to contain the cancer.
Mpilar
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Gold
Nashville, TN
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Quote:
It's said that the purpose of private-sector unions is to protect the employees from eeeeeevil corporations.

Yeah...how many people were chained to their workstations in the 30's to now that couldn't leave the job that was "so unfair" to them?
Quote:
Does that mean that the purpose of government-employee unions is to protect the employees from the eeeeeeeeevil taxpayers?

YES!

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Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats. H. L. Mencken
Reluctantdebtor
Posts: 126
Incept: 2010-03-05

ohio
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A friend living near Cincinnati just told me the average pay at the Hostess factory local to him was $25 an hour. If I was getting paid $25 an hour to make awful poison cupcakes for idiots, I wouldn't dare breathe a WORD of complaint in this economy. I'd just pull the lever and poot out the cakes.
Mannfm11
Posts: 3533
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Gold
DFW, Tx
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Where the hell you think the $700 billion went? Ohio was mentioned above. Think Obama wins Ohio without union coercion?

Public unions are another matter. Government is supposed to work for us. It isn't that way today. Government should pay a competitive wage. In states like California, government employees are guaranteed millionaires at retirement. Price a $45K a year pension on a female at age 55. I doubt it is $1 million, but I bet it is close to $900K. That is probably near what a top of the line teacher gets, plus medical benefits, in Texas. Probably double that in California and we aren't talking 20 years from now, but right now. Even though a million isn't what it used to be, it probably puts one in the top 3% or so of Americans. And, I am not talking about their home equity. Sure they give up something to be a teacher. They get something too, like 1/3 the year off, benefits. What has been a secure pay check and the right to quit and go do something else. Also, the pool of people in the education schools is the bottom of the heap, which means that if money is a problem, they might have done better if they had gone out and sold used cars than enter into another educated profession.

There is going to be only one place to stop Obama and the unionization of America, whether most of the workers want it or not, the courts. National Right to Work Committee is engaged in representing opposing workers and in lobbying Congress to make changes. Also, we can only hope for more right to work states. Unions are not so much engaged in gaining higher salaries for workers as they are in feathering their own nests. The worker isn't the union today. The union is a business of its own and by far and away the largest donee to political campaigns. They also enjoy immunity to criminal prosecution for anything from vandalism to murder.

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Mannfm11
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Gold
DFW, Tx
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Eagle, those videos give you the redass don't they? $200,000 a year for working 120 days a year? The ****er should go paint some houses if he wants danger. There are some dangerous fires, I will admit. They don't happen too often. There is no wonder guys are standing in line to be firemen.

I knew a guy when I used to do a lot of drinking. He was a year or 2 younger than I. He made it to Assistant Chief of Police. When he hit 50, I found him on a bar stool in a local restaurant, retired. This is a pretty high income city where I live, so I bet his retirement was based on $150K or so. His father was a NYC cop, so he knew the ropes when he went into the game. There are a lot of guys my age that would have done cop if they had only known.

The firemen around here used to have businesses, due to the fact they were off 2 days out of every 3. A son of a friend of my parents was a fireman. I recall talking to him around 2000 and he mentioned what his pension was going to be. There aren't any public unions in Texas that I know of, but the amount at the time was shocking to me. I believe he had a sideline business as well. DFW isn't California, but I think he was talking around $75K a year at that time. That is well over $1 million. The video fireman would cost close to $2 million to fund his pension.

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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