The Struggle in Wisconsin is Similar to the French Revolution

Posted by PITHOCRATES - March 5th, 2011

 Technology Kills Jobs and Unions

Here’s something that probably won’t bother a lot of people.  We may have fewer lawyers in the not so distant future.  Why?  Because technology is replacing them (see Technology Eats Lawyers by Douglas French posted 3/5/2011 on Ludwig von Mises Institute).

In 1900 America only had 100,000 lawyers, now there are somewhere around 1.2 million. However, lawyers are now the ones in the cross-hairs of technology’s death ray. Artificial intelligence has advanced to the point where “e-discovery” software can analyze documents faster and cheaper than humans.

“From a legal staffing viewpoint, it means that a lot of people who used to be allocated to conduct document review are no longer able to be billed out,” said Bill Herr, who as a lawyer at a major chemical company used to muster auditoriums of lawyers to read documents for weeks on end. “People get bored, people get headaches. Computers don’t.”

This new legal software is clever, allowing lawyers to determine the internal goings on within companies upon analyzing emails and other internal documents.

A computer replaces a lawyer?  Is that even possible?  A computer reads and interprets human language?  Nuance and slang?  Well, yeah.  Just ask Brad Rutter.  Or Ken Jennings.  Two of the biggest Jeopardy champions of all time.  Who lost to Watson.  A computer.

Technology marches on.  Always.  And it changes things.  Changes the world.

Back in 1900 over 40 percent of the America’s workforce was employed in agriculture. One hundred years later the percentage had fallen to less than two percent. What happened was technology. Tractors, balers and fertilizer meant that yours truly despite growing up in farm country didn’t get stuck down on the farm.

It’s happened to industry after industry and progress marches on. Any job that is mindless and repetitive, over time it’s likely going away. Some machine or technology will do it better and faster. And this is a great thing. Imagine what America would be like if almost half of us had to work on the farm producing food. Most of what we take for granted each day wouldn’t have even been thought of if half of us were slopping hogs and mending fences.

A century earlier most of us were farmers.  That’s why unions weren’t a significant political force around 1800.  Most were farming land they owned.  As the Industrial Revolution transformed America, cities grew.  People left farms to work in factories.  Following World War II, when Europe’s industries were in shambles, American industry exploded.  As did the power of unions.  It was the sweet-spot of the labor movement.  We rebuilt war-torn economies around the world.  Our factories were humming.  And they were organized.  The sky was the limit.  Because there was nowhere else to go.  So wage and benefit packages were very generous.  Then something happened.  The world’s economies recovered sometime in the 1960s.  All of a sudden, you could go somewhere else.  Not pay those high American prices.  And people did.

The unions grew strong when they could.  When there was no competition.  But when competition returned, the unions lost their power.  Because there was a limit to what they could demand.  You see, unlike before, businesses could not pass on higher and higher union costs to the consumer.  Companies that tried saw losses in market share.  So they had a choice.  Go out of business.  Replace people with robots.  Or outsource.  And they did all three.

Union membership in the private sector has declined since the ‘sweet-spot’ of organized labor.   From approximately 35% to less than 10%.  Interesting, though, this is not the case with public sector unions.  During the seventies, public sector workers belonging to a union jumped above 35%.  And has stayed there ever since.

Public Sector Unions:  Stealing from the Poor to Give to the Rich

So what’s the difference between the private sector and public sector that accounts for this divergence in union membership?  In a word, competition.  Where there is competition, union membership has declined.  Where there isn’t competition, union membership has grown and held steady.  Why?  Because of taxes.  States and municipalities have the power to tax.  And when they need more money for those generous salaries, health care and pension benefits, they go to the taxpayer. 

But there’s a problem.  You can’t keep raising taxes.  Especially when the people paying for the benefits have to sacrifice their own retirement and health care in the process.  And when we’re all living longer now (see How to fix the public sector pension system by Michael Johnson posted 3/5/2011 on the UK’s Telegraph).

There are two aspects to consider; affordability and fairness. A DB [defined benefit] pension provides the retiree with certainty of income until they die but, as the private sector has discovered, the cost of providing such certainty is now prohibitive, primarily because people are living longer in retirement. Indeed, the Government expects more than ten million people in the UK today to live to see their 100th birthday.

Private sector occupational pension provision has almost become a DB desert, replaced by defined contribution (DC) schemes, in which pensioners assume their own longevity risk. At retirement, unless a lifetime annuity is purchased (increasingly expensive), pensioners’ subsequent income is uncertain because they do not know how long they will live, nor how their assets will perform.

Conversely, public sector workers have access to valuable, state-provided longevity protection, care of their DB schemes (as well as no investment risk concerns). Their income is assured, irrespective of how long they live, but even after the introduction of higher employee contributions, tax-paying private sector workers would still be funding the bulk of the cost. It is unreasonable to expect them to assume, and pay for, the longevity risk of others, whilst not being able to enjoy a similar facility themselves. Furthermore, because our population is ageing, the number of workers supporting each pensioner is declining. Consequently, the tax burden is likely to rise, leaving our private sector workers with less to save for their own retirement…

Were such a DC framework for the public sector not to materialise, the Government would be tacitly signalling its acceptance that the quality of pension provision in the (wealth-creating) private sector is to remain second class.

And this is what the debate in Wisconsin is really about.  The ‘right’ for public sector unions to collective bargain isn’t about their salaries.  They are more than willing to give up some of that money.  It’s the benefits they’re worried about.  And what their ‘right’ of collective bargaining has given them.  That bargaining power has passed all those benefit costs onto the taxpayer.  Without the taxpayer’s consent.

This is indeed a class war.  Like there was in circa 1790 France.  Only the sans-culottes are the taxpayers.  And the ‘knee-breeches wearing’ aristocracy oppressing them are the public sector workers.  This development reminds me of a Monty Python’s Flying Circus sketch.  When Dennis Moore steals from the rich to give to the poor.  First stealing lupines.  Then valuables.  After awhile, though, the rich become poor.  And the poor become rich.  This verse near the end of the sketch says it best in song.

Dennis Moore, Dennis Moore
Riding through the land
Dennis Moore, Dennis Moore
Without a merry band
He steals from the poor
And gives to the rich
Stupid bitch

After this verse a confused Moore is struck with the realization of what he’s done and says, “Blimey this redistribution of wealth is trickier than I thought.”

Yes it is.  Indeed.  And the taxpayers get poorer while the public sector gets richer.  Thanks to collective bargaining against the taxpayers.  Public sector unions.  Just like Dennis Moore.  That stupid bitch.

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Big Government is Bankrupting and Oppressing Us

Posted by PITHOCRATES - November 21st, 2010

Rich Democrats Profit from Big Government

Do you know what the problem with the idle rich is?  They sometimes use their idle time to think (see Millionaires to Obama: Tax us by Rachel Rose Hartman posted 11/19/2010 on Yahoo! News blog The Ticket).

More than 40 of the nation’s millionaires have joined Patriotic Millionaires for Fiscal Strength to ask President Obama to discontinue the tax breaks established for them during the Bush administration, as Salon reports.

And who are these millionaires?

The group includes many big-time Democratic donors such as Gail Furman, trial lawyer Guy Saperstein and Ben Cohen of Ben & Jerry’s ice cream (pictured). The list remains open to millionaires who want to sign on.

One thing we’ve learned from government.  The rich never pay their fair share of taxes.  Neither will these Democrat supporters.  I mean, if you’re so patriotic and loyal then just give your money to the government without the tax law forcing you.  Like J.P. Morgan did during the Panic of 1907.  (He used his own wealth to help shore up the banking system during a liquidity crisis).  But they don’t.  Why?  (That’s not a rhetorical ‘why’.  I would really love to hear them answer that question.)

But the key here is that they’re Democrat supporters.  Supporters of Big Government.  Who either profit from government (by preventing any tort reform so lawyers can continue to enrich themselves with frivolous lawsuits brought against corporate America (News Flash:  McDonald’s hot coffee is hot)).  Or are a bunch of rich coots that get off on telling other people how to live.

A Bankrupt City Pleads for Churches, Schools and a Hospital to Help Pay their Union Costs

And speaking of charitable contributions to the government, here’s a city government asking for just that (see Debt Rising, a City Seeks Donations in Michigan by Nick Bunkley posted 11/19/2010 on The New York Times). 

A Michigan city is pleading with churches, schools and a hospital for donations to help cover its staggering budget deficit.

Gail Furman, Guy Saperstein and Ben Cohen ought to throw some of their wealth over to Mount Clemens.  They could feel patriotic and loyal.  And the city could really use their help.  For they’ve done everything they can already.

[The Mount Clemens mayor] said the city has already drastically cut its expenses, having disbanded the police department six years ago, but still faces a $960,000 deficit that is projected to reach $1.5 million next year.

It’s always the police and fire departments that get chopped first.  Not the real things bankrupting the city.  Which, interestingly, they note (probably unintentionally) in the last paragraph.

The city asked its retirees to increase their health insurance deductibles, [the mayor] said, and 8 or 10 did so or switched to their spouse’s plan, saving $192,000.

It’s the same thing that’s bankrupting cities in all of ‘blue’ America.  Fat union payrolls and fat union benefits for city employees.  But they get rid of cops and fire fighters first because it’s a good scare tactic that usually works at the polls when trying to renew or increase a millage.

High Union Pay and Benefits do not Make NYC’s Trains any Safer

But we have to provide those fat pay and fat benefits to attract quality people to these jobs.  Don’t we?  You decide.  Here’s yet another example of what we get for these high pay and benefits (see Subway Signal Inspections Found to Be Falsified by Michael M. Grynbaum posted 11/19/2010 on The New York Times).

Safety workers at New York City Transit falsified thousands of inspections of the track signals that direct trains in the subway system, deeming the signals safe even though those inspections had never taken place, according to an investigation by the inspector general of the Metropolitan Transportation Authority.

Train tracks are broken down into ‘blocks’.  These signals are green when a block is empty.  They’re red when a train is in that block.  These block signals are what keep trains from crashing into each other.  So they’re kind of important.  For safety.

Real railroad personnel would never do this.  They take their work too seriously and have far too much pride to endanger people on their tracks.  But unionized city workers are another story.  It’s not about the love of railroading.  But living better than other people. 

Is this only an isolated incident?

It is not the first time that safety workers in the subway have been found to have falsified such inspections. A nearly identical situation was revealed by the inspector general in 2000.

Apparently not.

The TSA:  Submit to Our Awesome Powers or We Will Destroy You

So government employees are bankrupting our nation with their fat pay and fat benefits.  And they’re endangering our lives with their poor work ethic.  Can it get worse?  Yes.  If we give them unfettered power over us (see $11,000 fine, arrest possible for some who refuse airport scans and pat downs by John Lantigua, Palm Beach Post, posted 11/20/2010 on the Sun Sentinel). 

The Transportation Security Administration (TSA) is warning that any would-be commercial airline passenger who enters an airport checkpoint and then refuses to undergo the method of inspection designated by TSA will not be allowed to fly and also will not be permitted to simply leave the airport.

Welcome to airport security.  By entering our line you forfeit all Fourth Amendment rights.  Please remove your shoes, your belts and lift up your dresses and drop your panties.  It’s all in the name of national security.  Yeah, it’s good to be an ineffective bloated government bureaucracy.  Power to the state, baby.  The state rules!

No wonder the Nazis went from state socialism to maniacal oppressive dictatorship.  It’s a rush for the corrupt in power.  No doubt that if some TSA gropers are brought up on criminal charges for ‘crossing the line’ they will follow suit.  I can hear them now.  “I was just following orders.”

Absolute Power Corrupts Absolutely.  And Brings Down Superpowers

Those rich Democrat millionaires got it wrong.  We shouldn’t be giving government more money.  Or more power.  That wasn’t the formula we used to become a superpower.  But it is the formula that has brought down every superpower to date.

www.PITHOCRATES.com

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