Impact of Unions on the Economy and Country

Unions and the Economy

1. Unions function as labor cartels, restricting the number of workers in a company or industry to drive up the remaining workers’ wages just as OPEC attempts to cut the supply of oil to raise its price.

2. Unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.

3. Unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members; nonunion manufacturing employment has risen.

4. On balance, unionizing raises wages between 0 percent and 10 percent, but at a steep economic cost. Unions have the same effect on business investment as does a 33 percentage point corporate income tax increase.

5. Congress should remember that union cartels retard economic growth and delay recovery when considering legislation, such as EFCA, that would force workers to join unions.

6. See following link for details: Union Impact on the Economy

1. Unions function as labor cartels, restricting the number of workers in a company or industry to drive up the remaining workers’ wages just as OPEC attempts to cut the supply of oil to raise its price.
2. 2Unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.
3. 3Unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members; nonunion manufacturing employment has risen.
4. 4On balance, unionizing raises wages between 0 percent and 10 percent, but at a steep economic cost. Unions have the same effect on business investment as does a 33 percentage point corporate income tax increase.
5. 5Congress should remember that union cartels retard economic growth and delay recovery when considering legislation, such as EFCA, that would force workers to join unions.

Massive U.S. Government Waste

Government Waste By the Numbers: Report Identifies Dozens of Overlapping Programs

The federal government hosts 47 job-training programs, 44 of which overlap. It runs 80 programs for the "transportation disadvantaged." 

Another 82 programs spread across 10 separate agencies endeavor to improve teacher quality -- something hundreds of local school districts are already focused on. 

These are just a few of the findings in a blockbuster report on government waste and inefficiencies released by the nonpartisan Government Accountability Office. The report identifies billions of dollars in potential savings if Congress just had the will to streamline initiatives that target politically popular causes. 

Though lawmakers in both parties have long struggled to eliminate the common culprits of waste, fraud and abuse, they seized on the findings Tuesday. House Republican Leader Eric Cantor vowed to "get our fiscal house in order" in light of the report. 

"Now again, we have said enough is enough. Our Congress is about delivering results," Cantor said. 

"This report confirms what most Americans assume about their government. We are spending trillions of dollars every year and nobody knows what we are doing. The executive branch doesn't know. The congressional branch doesn't know. Nobody knows," Sen. Tom Coburn, R-Okla., said in a statement Tuesday morning. "This report also shows we could save taxpayers hundreds of billions of dollars every year without cutting services."

The well-timed release comes as Republicans and Democrats fight over how much to cut from the rest of this year's budget, not to mention next year's $3.73 trillion spending plan. Democrats have so far balked at GOP plans to cut $61 billion from the 2010 fiscal year budget. But while both parties are squabbling over a relatively small slice of the budget pie -- discretionary spending -- the GAO report suggests Congress could keep cutting and leave the operation of government intact. 

"Reducing or eliminating duplication, overlap or fragmentation could potentially save billions of taxpayer dollars annually and help agencies provide more efficient and effective services," the report said. 

The study found 33 areas with "overlap and fragmentation" in the federal government. Among them, it found: 

-- Fifty-six programs across 20 agencies dealing with financial literacy. 

-- More than 2,100 data centers -- up from 432 a little more than a decade ago -- across 24 federal agencies. GAO estimated the government could save up to $200 billion over the next decade by consolidating them. 

-- Twenty programs across seven agencies dealing with homelessness. The report found $2.9 billion spent on the programs in 2009. "Congress is often to blame" for fragmentation, GAO wrote in this section, explaining that the duplicative programs in multiple agencies cause access problems for potential participants. 

-- Eighty-two "distinct" teacher-quality programs across 10 agencies. Many of them have "duplicate sub-goals," GAO said. Nine of them address teacher quality in the fields of science, technology, engineering and math. 

-- Fifteen agencies administering 30 food-related laws. "Some of the oversight doesn't make any sense," the report stated bluntly. 

-- Eighty economic development programs. 

In some cases, the programs in question struggled to account for what they did. Take, for instance, domestic food assistance initiatives. According to GAO, 18 such programs are administered by the U.S. Department of Agriculture, the Department of Homeland Security and the Department of Health and Human Services -- with GAO estimating $62.5 billion spent on them. 

But "little is known about the effectiveness" of 11 of those programs, the report states. 

Similarly, of the 47 job-training programs run out of the federal government, only five could provide an "impact study" since 2004 looking at "outcomes." About half of them provided no performance review at all since 2004.

The report quickly became a political football Tuesday for lawmakers arguing over proposed cuts. 

"Given the size and scope of the problem, there is likely much more duplication and fragmentation left to find," said Sen. Jeff Sessions, R-Ala., chairman of the Senate Budget Committee. 

Sen. Jeanne Shaheen, D-N.H., said the report offered an opportunity to make "smart cuts, instead of reckless cuts." 

"Today's GAO report shows us a path forward to responsibly, effectively reduce the deficit without slashing investment in our economy, cutting private sector job growth, or endangering the most vulnerable members of our society. We must eliminate outdated and unnecessary programs, as I have proposed before and as the GAO suggests here," she said. 

The lengthy GAO report was mandated by Congress the last time it raised the debt limit in January 2010. Coburn said the report makes lawmakers look like "jackasses." 

"We don't know what we're doing," Coburn said. 

The Defense Department takes a number of hits in the report. The GAO found many instances of duplication in the sprawling agency. The use of "urgent need" funds have been expanded, GAO found, with "multiple places for a warfighter to submit" such requests. 

GAO found that the Pentagon has "no tracking mechanism" for these funds, resulting in an estimated $77 billion spent since 2005 on communication and computer technologies, counter-measures for improvised explosive devices and intelligence, surveillance and reconnaissance tools. 

Congress asked GAO to look specifically at "federal programs, agencies, offices and initiatives with duplicative goals and activities, to estimate the cost of such duplication and to make recommendations to Congress for consolidation and elimination of such duplication." 

Fox News' Trish Turner contributed to this report.

Government Steals Your Wealth

Editorial: When Inflation Comes, Blame Big Government

 Posted 04/01/2011 07:39 PM ET

Economy: Amid the good news of a rebounding stock market and better job growth comes a warning: Inflation may flare up soon. If it does, don’t blame business.

Maybe you think it's crazy to worry about inflation when the consumer price index is rising at a modest 1.5% year over year. That's a valid point. It's also true that many of the items that make up inflation in our daily lives are climbing fast.

Raw food commodity indexes, for example, have hit all-time highs. And the broader CRB Commodity Index, including food, energy and industrial commodities, has run up 32% the past 12 months.

As anyone who owns a car or truck knows, oil prices have jumped 29% in the past year to more than $108 a barrel. This has pushed gasoline prices over $3.60 a gallon nationally, twice what they were when President Obama entered office.

As for that weak CPI, there are good reasons to question the government's benign official readings. Bill Simon is one of them. When the CEO of Wal-Mart's U.S. arm talks, we listen. And last week he told consumers to get ready for a burst of "serious" inflation.

Toyota Motor Co. is another. Americans typically ignore the impact of a weaker dollar. But the biggest carmaker in the world has announced price hikes across the board for all of its vehicles, in large part due to the weaker U.S. currency.

Monetary officials, including the presidents of the Federal Reserve Banks of Richmond, Minneapolis and Dallas, have also weighed in. They too see inflation ahead and suggest the Fed may start raising rates soon.

John Williams, of the useful and iconoclastic Shadow Government Statistics website, measures prices the old-fashioned way. He employs the methodology used before 1992, when Labor Department changes started producing milder readings.

By his measure, inflation is close to 10%, tracking price increases for commodities, energy, food, precious metals and health care, among other items. Once this is recognized, expect business to get the blame and Congress to convene hearings on "price gouging," as it's done dozens of times (without finding any).

It's really government that causes inflation with actions such as:

• The $2 trillion in money created by the Fed under "quantitative easing" since 2008, an unprecedented shot of liquidity pumped straight into the economy.

• The $5.5 trillion in new debt added by our government in just three years — nearly a 60% rise.

• The Environmental Protection Agency's move to regulate all stationary producers of carbon dioxide, which has led businesses to put off large investments.

• The surge in regulation at all levels of government, which has added to small-business uncertainty and reduced hiring.

• The record 29% jump in federal spending in President Obama's first three years, which has crowded out private spending and business investment.

• Spending on TARP and "stimulus," which could total nearly $2 trillion when all is said and done.

The list goes on. The point is, don't blame companies like Wal-Mart, a proven price cutter, when inflation hits home.

Blame the federal government, which seems dead set on repeating the same errors it made in the stagflationary 1970s.

Big Government Solution

The Ryan Plan: Bold, Reckless, Suicidal, Superb

By CHARLES KRAUTHAMMER Posted 04/07/2011 05:20 PM ET

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In 1983, the British Labor Party under the hard-left Michael Foot issued a 700-page manifesto so radical that one colleague called it "the longest suicide note in history."

House Budget Committee Chairman Paul Ryan has just released a recklessly bold, 73-page, 10-year budget plan. At 37 footnotes, it might be the most annotated suicide note in history.

That depends on whether (a) President Obama counters with a deficit-reduction plan of equal seriousness, rather than just demagoguing the Ryan plan till next Election Day, (b) there are any Republicans beyond the measured, superwonky Ryan who can explain and defend a plan of such daunting scope and complexity, and (c) Americans are serious people.

My guesses: No. Not really. And I hope so. (We will find out definitively in November 2012.)

The conventional line of attack on Ryan's plan is already taking shape: It cuts poverty programs and "privatizes" Medicare in order to cut taxes for the rich. Major demagoguery on all three counts:

(1) The reforms of the poverty programs are meant to change an incentive structure that today perversely encourages states to inflate the number of dependents (because the states then get more "free" federal matching money) and also encourages individuals to stay on the dole.

The 1996 welfare reform was similarly designed to reverse that entitlement's powerful incentives to dependency. Ryan's idea is to extend the same logic of rewarding work to the noncash parts of the poverty program — from food stamps to public housing.

When you hear this being denounced as throwing the poor in the snow, remember these same charges were hurled with equal fury in 1996. President Clinton's own assistant health and human services secretary, Peter Edelman, resigned in protest, predicting that abolishing welfare would throw a million children into poverty.

On the contrary. Within five years child poverty declined by more than 2.5 million — one of the reasons the 1996 welfare reform is considered one of the social policy successes of our time.

(2) Critics are describing Ryan's Medicare reform as privatization, a deliberately loaded term designed to instantly discredit the idea. Yet the idea is essentially to apply to all of Medicare the system under which Medicare Part D has been such a success: a guaranteed insurance subsidy.

Thus instead of paying the health provider directly (fee-for-service), Medicare would give seniors about $15,000 of "premium support," letting the recipient choose among a menu of approved health insurance plans.

Call this privatization if you like, but then would you call the Part D prescription benefit "privatized"? If so, there's a lot to be said for it. Part D is both popular and successful. It actually beat its cost projections — a near miraculous exception to just about every health care program known to man.

Under Ryan's plan, everyone 55 and over is unaffected. Younger workers get the insurance subsidy starting in 2022. By eventually ending the current fee-for-service system that drives up demand and therefore prices, this reform is far more likely to ensure the survival of Medicare than the current near-insolvent system.

(3) The final charge — cutting taxes for the rich — is the most scurrilous. That would be the same as calling the Reagan-Bradley 1986 reform "cutting taxes for the rich." In fact, it was designed for revenue neutrality.

It cut rates — and for everyone — by eliminating loopholes, including corrupt exemptions and economically counterproductive tax expenditures, to yield what is generally considered by left and right an extraordinarily successful piece of economic legislation.

Ryan's plan is classic tax reform — which even Obama says the country needs: It broadens the tax base by eliminating loopholes that, in turn, provide the revenues for reducing rates.

Tax reform is one of those rare policies that produce social fairness and economic efficiency at the same time. For both corporate and personal taxes, Ryan's plan performs the desperately needed task of cleaning out the many accumulated cutouts and loopholes that have choked the tax code since 1986.

Ryan's overall plan tilts at every windmill imaginable, including corporate welfare and agricultural subsidies. The only thing left out is Social Security. Which proves only that Ryan is not completely suicidal.

But the blueprint is brave and profoundly forward-looking. It seeks nothing less than to adapt the currently unsustainable welfare state to the demographic realities of the 21st century. Will it survive the inevitable barrage of mindless, election-driven, 30-second attack ads (see above)? Alternate question: Does Obama have half of Ryan's courage?

I think not (on both counts). But let's hope so.