Unions

I've been watching the fun up in Wisconsin the last couple of weeks and have to admit I laughed aloud more than once. Elections matter, it seems, only when the Democrats win. When they loose, they head for the border, much like roaches when the lights go on. Had they tails, they'd be tucked. I also seem to recall something said by their national leader a while back - "the election's over, we won" - just before they rammed through one monstrous bill after another. Man, payback can sure be a . . .

This time, the fight's about unions, perhaps the mainstay of Democrats for decades. They've always claimed to be the party of the little people and for some reason, the Stupid Party let them get away with it. Imagine if you will, back just before 1900, reading "John L Lewis, after a hard day in the coal mines, enjoyed a dinner of tofu turkey with a salad of arugula, asparagus and anchovies, wishing his wife and kids had not gone to the Cape for a week of kite-surfing. After an hour spent digging the coal dust from his nasal cavities, he donned his helmet, knee pads and Crocs, then hopped on his thirty-six gear, ultra-lite racing bike for a quick run to town to vote for the Democrats."

The question of unions is fairly important though, especially those involving government employees. Like most everything else in life, there are pros and cons and good arguments on both sides and a reasonable middle ground is the best anyone should hope for, though it rarely is. Humans by nature want to win and politicians will do anything that increases their likelihood of re-election.

Everyone wants good government employees, simply because of the impact they have on our daily lives. For a long time though, all but those at the top were grossly underpaid, so good benefits and a reasonable pension seemed only fair. Public sector unions were outlawed until JFK issed an executive order, and even today they are either banned or forbidden from collective bargaining in a number of states. The fact that the majority of the most fiscally challenged states allow such tells us something. The little-g gods of unintended consequences are grinning once again.

A fairly large number of people feel that unions have outlived their usefullness. The sweatshops of yesteryear are largely gone, though there are reports of such involving illegals. Forty hour workweeks, medical benefits and vacations are certainly routine today and, until recently, annual raises were all but expected. Safety rules and regulations have dramatically reduced deaths and injuries, even in some of the more dangerous, and politically connected, industries. One might wonder what value unions offer now?

I have no idea what the organizers say, but it looks like the best they can do is to forever push for a larger government presence, partly to maintain relavence, but mostly to increase the possibility of membership growth. Membership in private sector unions has been shrinking for years, so only one possible target remains. Can I still say target?

Unions and companies, large and small, have always shared one trait - those at the top always earn at least several times that of the rank and file. I can justify much of this in private concerns, as the owners assume the capital risk and in most cases, are the focal point of the firm. This is not true in public corporations, as shareholders are the ones at risk (at least in theory), and certainly not true in unions.

Unions exist for the good of the workers, or so we've been told for a century now. I understand the concept but am not sure how valid that really is, especially when I learn another union has bought a golf course and this time they paid cash. I'll bet the rank and file members are ecstatic. This, by the way, is not the first union to do so. There's no question old John L was a far left labor leader, but I wonder if he played golf?

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Monarchies, dictatorships and republics - oh my

A thousand years ago when I was in school, we were taught, among other things, the differences in types of governments. There were monarchies and dictatorships and republics and probably more, but it was so long ago I can't remember any others. The events of the last few weeks in Egypt sort of reminded me of those differences, especially when I read this article about their dictator's last days.

I have to admit however that what I read made me question what I was taught in school all those decades ago. Back then republics were governed by citizen-legislators, representatives elected by the populace to enact those laws necessary to the stability and well being of the voters, with the representatives expected to make the final choices which they thought best. We all know those days never really existed, and today we have only politicians, most of whom are lawyers and/or liars (sorry for the redundancy).

They also taught us that under dictatorial rule, those in power rewarded their friends and relatives with government business. Indeed, the article states that "The president made his two sons the "go to" men for any companies that sought to do business in Egypt", routinely costing "between 20 to 50 per cent". Its different in republics, supposedly, where those in power reward those who contribute to their election campaigns because, thanks to the lawyers, that's legal.

According to this article and others, Mubarak now owns a fortune worth somewhere between three and eighty billion, which says something about estimates, but after the first billion I'm not sure it really matters. Politicians in republics most assuredly increase their net worth while in office (at least the vast majority do), and they really rake it in after they're out of office. Bill Clinton has supposedly earned over one hundred million dollars since leaving office (if you were not aware of this, please read the article - it gets worse). So the difference must be that in republics, you have to know how to work the system to get rich as opposed to simply outright stealing like in dictatorships.

Like the vast majority of pundits and talking heads, I know virtually nothing of Egypt, other than there's a river there and forty percent of the population lives on two bucks a day. Unlike most of them I choose not to pretend I do; instead I simply read through the linked article, and others, and cannot help but remark how similar are the actions of Egypt's most recent dictator to those of so many of our politicians. And I can't help but wonder if all we were taught about types of governments is really true.

Objectively I can see the differences, but reality rarely matches up with book learning. In fact, if one were to examine the similarities among different types of government, you might find a great many more of those than you would differences. Its almost like the only difference is that in monarchies and dictatorships there is one man or woman who controls all the money and power while in republics there may be up to a thousand who do so on a daily basis. Oh, and the names of that thousand change, depending on the last election.

Government, by definition, denotes control of others and the different types depend almost entirely on which side won the last war. Republics seem to the best system that we've seen so far, but I think too that they may need to be re-invented on some fairly regular basis. The basic problem seems to be that no matter how carefully constitutions are written, lawyers parse each word to infinity so as to empower those who possess the worst character traits. All of this of course, simply reinforces how prescient Jefferson was back in 1799 - "Offices are as acceptable here as elsewhere, and whenever a man has cast a longing eye on them, a rottenness begins in his conduct." The type of government has nothing to do with it.

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Incentives and surprises

Exploring the history of healthcare insurance is both enlightening and enormously depressing. An economics professor could spend an entire semester using this history as a case study in incentives - not to mention the folly of government interventions and mandates.

From the best I can determine, an appropriate place to start would be WWII, when the government imposed a freeze on most wages, supposedly to avoid inflation. Unions, to try and maintain their relavence, began to push the concept of companies providing insurance for their members as a tax free benefit. In 1954 Congress officially made most company paid health insurance coverage a non-taxable event for the employee. Surprisingly, insurance companies began pushing nothing but company plans, ensuring that individual plans would skyrocket in cost.

LBJ pushed Medicare through Congress in 1965, granting to all seniors a government paid health insurance plan, that would reimburse virtually all medical service providers for their treatment, even if it was only at the government's prices. Surprisingly, nearly every provider took them up on their offer.

Fast forward now to 1986 and passage of The Emergency Medical Treatment and Active Labor Act, which required "hospitals and ambulance services to provide care to anyone needing emergency healthcare treatment regardless of citizenship, legal status or ability to pay". Outside of the Shriners Hospitals for Children, Indian Health Service hospitals and Veterans Affairs hospitals, this law applied to virtually all healthcare providers in the country, as it was decreed that any provider receiving payments from Medicare must abide by this new law. Surprisingly, emergency rooms were soon overwhelmed.

Last year Congress pushed through their latest healthcare atrocity, the one requiring everyone in the country to purchase Congressionally approved healthcare insurance. Otherwise they said, free riders would not buy insurance which would push up the cost to the rest of us. Surprisingly, taxpayers did not greet this with howls of joy.

So after Congress passed a law which guaranteed that most every employer would offer healthcare insurance as a benefit, they passed a law

• in 1965 that forced every taxpayer to pay for healthcare for all seniors
  so most providers agreed to Medicare
• in 1986 that forced every taxpayer to pay for healthcare for all uninsured
  so most providers went along to continue getting paid by Medicare
• in 2010 that forces taxpayers to pay for healthcare for everyone else
  and then pretends surprise when taxpayers don't like it

There might be a few who would consider the above as proof of a conspiracy to take over an industry, but I don't. There might be some who would consider it as further proof of the hypocrisy and hubris of the elected elite, which it most certainly is. But for any who do not believe in the concept of a slippery slope, I submit they can no longer claim such.

We don't know what might have happened had insurance never been deemed a tax-free benefit and very few would advocate ending Medicare and Medicaid. What seems inescapable however is that whenever Congress passes a major law, they spend the next few decades enacting others, supposedly to fix what they'd done before. Surprisingly, every time they do, it costs taxpayers even more.

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State inspections

So I had to have my car inspected the other day and for the first time in several years, it passed without requiring any repairs. I've recently been using an old cheap person's rule for my inspections. I drop my car off on the last day of the month, usually an hour or so before closing time. This isn't a real big win for me, but it does let my inspection sticker last thirteen months.

I mentioned the inspection to a friend on the phone and she responded that in Kentucky, where she lives, they have no state inspections. I already knew that some states require official inspections only as vehicles are sold. This led me to wonder about the actual value of inspection programs and in particular whether they're still needed on an annual basis.

Aboard barstools, hours can be spent arguing about the value of inspections, and especially particular regulations, but for some reason, thinking about inspections led me to wonder about other laws that are either outdated or simply nonsensical and I found a fun site that could help you waste a number of hours.

While safety of the motoring public is certainly a goal, our inspection laws serve best the garages licensed to perform those inspections. Having run such stations, I can attest to the value of having a law requiring them. The problem of course is that what might pass inspection at one station might not at others, depending on how strictly the regulations are enforced. I suspect these variances are not as great today as they once were, as the old ways, and older state troopers (who supervise the stations), fade away.

If we're going to have inspections, we need those troopers, or someone, to perform supervision. Its far too easy to abuse the regulations, especially as fewer and fewer consumers actually know very much about auto maintenance, due largely to the ever-increasing complexity of the cars. In a starkly different industry however, it is still a requirement in Virginia that anyone who cuts hair for money must be approved and registered by the state.

Virtually everyone understands that this licensing has nothing to do with protecting the public, but is only a barrier to those wanting to perform this service - which serves those already licensed - and also a sop to the schools who teach the trade. I'm pretty sure I don't know anyone dumb enough to return to the hairdresser who screwed up their last haircut, licensed or not.

Then one has to consider a recent incident in North Carolina. After the consultants hired by the city stated new traffic lights were not needed, a group of concerned neighbors performed their own analysis and presented it. The NCDOT responded by requesting the NC Board of Examiners for Engineers and Surveyors to investigate the presenter for practicing engineering without a license.

The NCDOT employee claimed the report "appears to be engineering-level work" by someone not licensed as such, even without any evidence or claim of payment. Using this criteria, in Virginia if someone cuts my hair well, even if I don't pay for it, they could be investigated for "doing haircutting-level work" without a license. If someone checks over their car before taking it to an inspection station, could they be investigated for "doing inspection-level work" without a license?

Yeah, we've got some dumb laws and even dumber lawmakers. But the prize for biggest dumb ass almost always goes to those doing the regulating.

UPDATE: Feb 7. Today's Wall Street Journal has a very interesting article about even more licensing idiocy. Sample quote: "Texas, for instance, requires hair-salon "shampoo specialists" to take 150 hours of classes, 100 of them on the "theory and practice" of shampooing". Once again, I'm not the only taking note of such.

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