Sometimes union thugs wear pinstriped business suits. Investment banker Ron Bloom is one of those thugs.

He decided in the 1970s to devote his life to helping labor unions stick it to America’s corporations. As an organizer, negotiator, and researcher for the Service Employees International Union (SEIU), Booth observed that many union negotiators didn’t have the skills they needed to bargain effectively with management.

“Unions were being backed into corners by companies and couldn’t understand on a sophisticated level, the company’s arguments … Labor needed to be armed with the equivalent skills.”

A longtime leftist, Bloom acquired the skills he needed to run circles around management. He went to Harvard Business School and built up his resume.

Bloom, who was President Obama’s car czar and then manufacturing czar, excels at wheeling and dealing. Last year Time magazine fawned over Bloom, naming him as one of the “100 Most Influential People in the World.” Bloom’s “role in brokering the rescue of General Motors and Chrysler while preserving more than 100,000 jobs demanded a synergist who could work both sides of the equation with authority and respect.”

Although it is true that Bloom was one of the principal architects of the auto industry bailout, Time failed to mention that he made certain that the deal enriched the United Auto Workers at the expense of bondholders. Bondholders accept low rates of return on their investment in the expectation that if the company goes belly-up they will be among the first creditors paid back, but Bloom and his colleagues in the Obama administration upended that ancient rule of repayment priority in the name of so-called “social justice.” They made sure that President Obama’s allies in the labor movement got far more than their fair share.

In his career as an investment banker, Bloom has used his considerable skills as a negotiator to engineer deals that benefit trade unions.

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The United Auto Workers Union (UAW) is the winner in the recently-concluded Ford contract negotiations. While its rank and file members will not see pay raises or recoup concessions, the union stands to gain millions in dues.

On Tuesday October 18, two large UAW local unions—Local 600 in Dearborn, Michigan, and Local 862 in Louisville, Kentucky—voted to approve their contract with Ford. The two locals had enough votes to push the contract over the line for company-wide ratification.

Before Tuesday’s vote, the fate of the contract seemed uncertain. Ford workers were almost evenly split on the new deals. An interior-parts plant in Saline, Michigan had almost 60 percent of its production workers vote against the contract. The vote totals went from 53 percent against last Friday to 63.2 percent in favor Tuesday.

Several local union leaders felt the contract did not go far enough. “People feel they deserve more,” Gary Walkowicz, a UAW Local 600 official who led a “Vote No” campaign, told Bloomberg Business Week days before the vote. “There is a lot of anger out here.”

One member went so far as to say that national leadership was more interested in gaining more dues than in what was best for workers.

Jeff Redden, a 16- year truck plant veteran and one of the leading voices against the contract at local 862 accused the union of becoming “too cozy with the company.”  Speaking to WHAS11, a Louisville news station, he criticized the union for agreeing to a $6,000 bonus instead of fighting for pay raises. (more…)

The #OccupyWallStreet movement that been embraced by Democratic politicians, liberal pundits, progressive groups, Big Labor and celebrities was actually created and is being led behind the scenes by far-left anarchists whose goal isn’t reform, but the total annihilation of the American economic and political system.

“Occupy Everything” is the culmination of a decades-long effort by militant radicals to create and fund a mass movement that has broad popular appeal. With the enthusiastic help of the institutional left, that effort finally seems to be working.

Case in point: Lisa Fithian. Fithian is a career “community organizer” and anarchist who specializes in “direct action” protests, and who has close ties to labor unions. She has been on the ground at the #OccupyWallStreet demonstration since its inception.

Local television station NY1 interviewed her as an ordinary “woman on the street,” presenting her as just another well-intentioned New Yorker who’s worried about the big, mean banks.

NY1 did not mention that Fithian lives in Austin, Texas, and failed to inform its audience about Fithian’s true motivations or her lengthy activist resume.

“Wall Street is certainly the heart of why we’re here. It’s the corporations — the big banks in this country have been destroying this country.”

Lisa Fithian says she’s not part of any official group–that this event is the work of many people coming together with the same message.

“Overfees or high mortgages, student loans–the banks are touching every aspect of our lives.”

She says banks and the wealthy have taken money for their own interests and their own survival.

“And the people here are saying enough of that.”

Inspired by events around the world, she drew the analogy to Tahrir Square in Egypt, and says the power of the people is leading to change.

It doesn’t take much digging to discover the real Lisa Fithian. (more…)

Over a year ago, the president of the United Auto Workers, Bob King, announced a campaign to ’shame’ foreign automakers with plants here in the U.S. into allowing his union to unionize them–the details of which would be released at a later point in time.

Earlier this year, when King finally released his new manifesto on what he expected the automakers to agree to, it was met with well-deserved derision.

The union was silent, though, when in June Bloomberg ran this headline: Hyundai Teaches UAW Best Factory Job Doesn’t Need a Union.

However, in early August, knowing that his union’s future is looking bleak, King stated that the union was in “confidential” talks with the foreign automakers.

“The vast majority of the assemblers here in the United States have at least agreed to confidential discussions,” UAW President Bob King said at an industry conference in Traverse City, Michigan. “We’ve had productive discussions. The last thing we want is confrontation.”

This seemed to confirm the buzz that was created in July when it was reported that the UAW was talking to the Volkswagen AG’s works council and the German union IG Metal to launch an attempt at unionizing the employees at VW’s new Tennessee plant. (more…)

Desperate times call for desperate measures, and the United Auto Workers’ Bob King thinks he’s just the union boss to make a go of it. With negotiations about to start with the Big Three American auto companies (two of which are UAW-owned), King is ramping up his rhetoric against the CEO of the only automaker that taxpayers did not bailout (Ford’s Mulally), while plotting his strategy for negotiations.

Meanwhile, claiming that he’s fighting for “social justice” and the entire American middle class (as opposed to just trying to save his otherwise failing union), sounding a lot like he is using the model being used to overthrow governments in the middle east, the UAW’s top boss is recruiting global activists to attack UAW-free foreign automakers.

If action is necessary, “we have a new strategy to organize them,” Williams said, which involves mobilizing members, retirees and allies “to expose violations of human rights.”

The efforts fall under the umbrella of the newly created Global Organizing Institute that is training the activists.

“It has the potential to be the largest, sustained consumer action by organized labor,” Williams said. “We have the resources and the people to be successful in this mission.”

In the United States, the Institute has put coordinators in each state to oversee recruits from university campuses and social organizations. An initial group of activists also has been recruited abroad in countries including China, India, Brazil, Japan and South Korea.

This coordinated effort will allow simultaneous protests at a company’s dealerships around the world to press for auto plant union organization in the U.S.

A second wave of eight interns from other countries is wrapping up a visit to the United States, where they interviewed workers at nonunion auto plants in Mississippi and Alabama.

When the UAW picks a company, these young international leaders say they will take action against the target, knowing they have UAW support.

In addition, alliances have been formed with unions in Germany, Japan and South Korea.

Of course, to King and his clan of foreign crusaders, a violator of “human rights” would be any foreign auto company that does not succumb to King’s extortionate version of a “fair election.”

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With the United Auto Workers’ membership at a third of its former size, and the job-destroying card-check bill (the misleadingly-named Employee Free Choice Act) dead for now, UAW President Bob King and the rest of his Detroit henchmen have had to come up with an inventive way in which to save their dying union by getting new members.

In July, the UAW hooked up with Jesse Jackson’s Rainbow/PUSH coalition and vowed to target the employees of foreign-owned automakers.  In August, the United Auto Workers’ Bob King declared his intent to “shame” companies that do not accept his “Principles for Fair Union Elections.” While eyes rolled throughout the labor relations community, most withheld comment, opting to wait and see what King had up his festooned sleeve. Well, the wait is over.

Because King’s “principles” were unilaterally conjured up in some back office at the UAW’s HQ (or on one of the UAW’s fairways), and given the hints of doom and gloom if an employer did not comply, many never really expected the UAW’s principles to be necessarily fair or principled. As a result, when the UAW officially issued its “principles” on Monday, the Union of Ailing Workplaces UAW did not surprise anyone with its wrong-headedness. In fact, not only did Bob King keep the basic tenets of the failed Employee Free Choice Act in place, he’s taken it even further.

The UAW’s “Principles for Fair Union Elections” [view PDF here] is a series of 11 mostly one-sided and seemingly innocuous guidelines, a few of which are harmless, a few that are superfluous, and several which strike at the heart of an employer’s property and free speech rights. (more…)

Private saving and investment are the heart and soul of the dynamic market process. Together they provide and allocate the resources used to augment the economy’s productive capacity, generate sustained long-run economic growth, and thereby make possible a rising level of living. Economic crises interrupt this process by discouraging investors and causing them to consume their resources or to employ them in relatively safe, low-yielding ways. Absent entrepreneurs willing to take the great risks that characterize investments in great technological and organizational innovations, the growth process fades into economic stagnation or even decline.

The present recession starkly displays this characteristic crisis-related abatement of the economy’s investment process. Indeed, the decline of private investment during recent years has been much greater than most observers realize. Consider the following data, taken or derived from the most recently revised National Economic Accounts prepared by the Commerce Department’s Bureau of Economic Analysis (Tables 1.1.5, 1.1.6, and 5.2.6).

In 2006, gross private domestic investment reached its most recent peak, at $2.33 trillion (in constant 2005 dollars), or 17.4 percent of GDP. After remaining almost at this level in 2007, this measure of investment fell substantially during each of the next two years, reaching $1.59 trillion, or 11.3 percent of GDP, in 2009. This decline is severe enough, but it does not give us all the information we need to gauge the extent of the investment bust.

The greater part of gross investment consists of what the statisticians call the capital consumption allowance, an estimate of the amount of money that must be spent simply to offset wear and tear and obsolescence of the existing capital stock. In a country such as the United States, with an enormous fixed capital stock built up over the centuries, a great amount of funds must be allocated simply to maintain that stock. In recent years, the private capital consumption allowance has ranged from $1.29 trillion in 2005 to $1.46 trillion (in constant 2005 dollars) in 2009. Thus, even in the boom year 2006, about 60 percent of gross private domestic investment was required merely to maintain the economy’s productive capacity, leaving just 40 percent, or $889 billion in net private domestic investment, to augment that capacity.

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Authored with Ivan Osorio

Yesterday, the United Auto Workers union (UAW) named Bob King as its new president. Does this mean a change in direction for one of America’s most powerful unions? Not likely.

King, a UAW vice president before yesterday and a member of the union’s executive board, was described by Time magazine late last year as being “Picked – Not Elected – to Lead [the] UAW.” As Time writer Joseph Szczesny noted, “For more than 60 years, the UAW’s top leadership has blocked attempts to permit union members to vote directly for the union presidency.” Instead, the union’s executive board has picked the UAW president since the late 1940s through closed caucuses.

It’s not like the union doesn’t need change. For several decades, lavish compensation packages and restrictive work rules have helped make the Big Three Detroit automakers uncompetitive, especially in the face of increased foreign competition. Yet you wouldn’t know it from the parade of old faces at the UAW’s recent convention. Listening to their comments, it’ s no wonder why Michigan has the worst unemployment in the nation—14 percent compared to 9.7 percent average for the entire country.)

AFL-CIO President Trumka pushed the class-war rhetoric so common among labor bosses. He thundered, “We cannot ease off the fight against trade agreements that favor Wall Street over workers throughout the world.” He applauded the UAW for “fighting back” against corporate America and hostile politicians, and called on the automakers to give back concessions made by the UAW.

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Since the early twentieth century, periods of real or perceived national emergency have been “critical episodes” in the growth of government’s size, scope, and power in the United States and in many other countries. Hence, the concise conceptualization: Crisis and Leviathan (the main title of my 1987 book on the growth of government in the United States from the late nineteenth century to the late twentieth century).

In the past century, the first five such critical episodes in the United States were: World War I; the Great Depression; World War II; a multi-faceted set of crises associated with the civil-rights revolution and the Vietnam War, roughly coincident with the presidencies of Lyndon B. Johnson and Richard M. Nixon; and the post 9/11 events associated with the so-called War on Terror and the U.S. attacks on and occupations of Afghanistan and Iraq. We are now amid another such critical episode, which springs from the housing bust that began in 2006, the economic recession that began late in 2007, and the financial debacle that reached its climax in September 2008.

The current troubles are complex and raise a multitude of questions. Many books and articles no doubt will be written to analyze these various issues in scholarly depth and detail, and certainly anything we might say today must be regarded as preliminary, at best. I focus here on a few aspects of the present episode that relate closely to my own research on the growth of government, a field of study to which I have returned again and again over the past thirty years.

I

The current recession has elicited many comparisons with earlier business downturns, especially with the Great Depression. Federal Reserve chairman Ben Bernanke is often described as an expert on the Great Depression who takes its lessons, as he understands them, deeply into account as he formulates and implements Fed policies. Likewise, many other economists have revisited the Great Depression recently in search of lessons applicable to current policy-making. In all of these reflections, the mainstream economics profession in general has distinguished itself by an astonishing superficiality of historical knowledge and lack of theoretical prowess.

The swiftness with which a great many mainstream economists have reverted to the simplistic “vulgar Keynesianism” that had its heyday from the late 1940s to the late 1960s has been nothing short of shocking, given that by the end of the 1970s such old-fashioned Keynesianism seemed to have been completely discredited and superseded in the leading echelons of the mainstream economics profession. Now it has come roaring back.

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Toyota, which employs over 35,000 workers in the United States with factories in eight states, is the target of a government-led and union-supported attack due to recent recalls.

In the U.S., it is estimated that 15,000 Lexus HS250h and 133,000 Prius models will be recalled due to gas pedal issues, with another 500,000 Prius and other gasoline-electric hybrids needing anti-brake software modification. As unfortunate and inconvenient as recalls can be, this not the first, or last time an automobile will need to be brought back to the shop for a quick fix.

One might think this is the first auto recall in decades from the way government officials and Congressional Committees have pounced on Toyota. However, as recent as last month, Honda announced a recall of 646,000 Fit models (or Jazz in some markets) due to a faulty master switch that could allow water to enter the electrical components resulting in fires. Ford, less than one year ago, was forced to recall more than 4 million cars based on 550 vehicle fires. The recall concerned cruise-control deactivation switches that were installed in 16 million Fords. Part of the recall included nearly 1.1 million 1995-2003 Ford Windstar family van models.

There was no government outcry and no demand for Congressional hearings over these recent recalls. So why has Toyota suddenly become the target of a government-led witch hunt?

Toyota’s U.S. operations are extremely successful, not saturated by inefficient union monopolies, and are in direct competition with the now government-owned General Motors.

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United Auto Workers (UAW) union rank and file members shout down their own UAW leadership in a heated meeting on January 24th, as their UAW leader loses it at the podium.  Sunday’s meeting in California made last summer’s Town Halls look like a family picnic, after a few choice words from their UAW leader spurred the crowd of rank and file members to erupt in screaming and chaos.  At one point,  another attendee tries to reason with the crowd, pleading “we have women and children in here that are scared.”

WARNING: Strong language, angry-town-hall-mob-like-behavior

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