Thursday, March 12, 2009

Omnibus Becomes Law, Frequent Flier Nancy Pelosi, Labor Unions Flex, Stewart vs. Cramer

Omnibus Becomes Law
Three cheers for government! For the Fiscal Year that began last October, we finally have a signed budget. The $410 billion Omnibus Spending Bill, that covers all of the governmental agencies for the balance of the year became law when President Obama quietly signed it in a private ceremony this week.

This bill has no heroes and plenty of villians. While much of the spending is routine and necessary spending, about $8 billion in the bill pays for thousands of those famous "earmarks" that Sen. John McCain (R-AZ) railed against in this past year's Presidential campaign.

President Obama noted the day he signed the bill its imperfections and vowed for earmark reform but essentially asked the public to give him a mulligan on this bill, framing it as last year's business.

While it may be true that it is partly last year's business, President Obama clearly could have still demanded that the earmarks be removed or threatened a veto. He chose not to not to "keep congress from being bogged down" as he said but for the simply expedient reason that he needs Democrats in congress in the upcoming fights over the budget, cap and trade and healthcare.

Not that congressional Republicans have a moral leg to stand on. Over 40% of the earmarks in the bill are Republican earmarks (proportional to their representation in congress) and the Republicans in congress (excepting Sen. McCain, who has been extremely consistent on this issue and has never made an earmark) passed tons of larded up bills during the Bush administration that Bush, who never once vetoed a spending bill, was happy to sign.

It is utterly insane to suggest that President Obama should be held to an instantly perfect standard after the Republican were more than happy to load in earmarks for years without complaint.

The broad reforms that the President outlined for future spending bills: competitive bids, earmark transparency and executive review are all positive. The goal shouldn't be to target earmark vs. non-earmark spending, the goal should be to target wasteful spending, no bid contracts and ill-conceived well-meaning projects. But it strains credibility to state that you are pushing hard for these reforms wihle not even putting up a fight against a bill that contains none of those constraints.

I suspect the public at this point will give the President a pass on this bill and this is a calculated non-fight. Whether I'm willing to give the President a pass depends on him following through on his broad principles with principled action going forward. This one just looks like old school Washington to me.

Maybe the Auto Execs Could Ride Share
Revelations that House Speaker Nancy Pelosi (D-CA) has frequently used governmental jets for travels abroad for herself and her family, some of which were of dubious need has prompted ire from the right and taxpayer action groups. The Speaker and Democrats in congress set themselves up for this attack with their unrelenting attacks on auto industry exec's use of private jets to come to congressional hearings about the auto bailout.

I think the same logic I stated for the auto execs applies to Pelosi. Private jets didn't bankrupt GM and Chrysler, nor did Pelosi's use drive up the national debt in any meaningful way. But images and perceptions matter and you cannot lead by asking others to sacrifice while you spend recklessly on non-essential things.

You should know better, Speaker Pelosi. Just another example of inept congressional leadership.

Union Power Grab -- Card Check
You have no doubt seen the large quantity of ads on TV these days, funded by unions, in support of the "Employee Free Choice Act". The ads aren't very clear on what the act does, so let me attempt to state it succinctly.

Basically, the way unionization choices exist today is as follows: if workers or a union organizer is interested in unionizing a business, workers begin signing union cards, signfying support for a union election or for joining the union. If a sufficient number of workers sign the cards, the National Labor Relations Board sets a union election to be held by secret ballot and if a majority of workers vote for a union, the business is unionized, if a majority do not, the business stays non-union. Alternatively, after the cards are signed, a business can elect to forego an election and simply recognize the union, in which case the business in unionized.

The Employee Free Choice Act moves the power to choose between a simple "card check" and an election from the employer to the union. Since employers virtually always choose secret ballot elections and the unions would presumably virtually always choose card check, the net effect of this is that unionization decisions would now be decided by the number of cards signed, not by a secret ballot election.

This bill appears likely to become law as it has strong support in the Democratic Congress and indications appear to be that President Obama would sign it.

This is bad law. A secret ballot is the most fair way for workers to make an unintimidated choice about union membership. Peer pressure and intimidation undoubtedly lead some to sign cards that do not want a union, as proven by the number of elections unions have lost over the years.

Unions complain that holding elections allows the companies to force workers to sit in meetings where they can actively campaign against the union. The problem with this argument are that there are very significant restrictions on what a company can say -- companies claiming that they will close factories, cut wages or lay people off as a result of a union decision face significant fines from the NRLB and trust me, the union reps know how to get those fines enforced against employers who engage in such conduct.

This is a power grab by unions, plain and simple. Unions are no longer the heroic representatives of the worker that some romantically imagine. Unions are big businesses with highly paid bosses vested only in the survival of the union. They have faced hugely declining membership in recent years as workers increasingly wonder what they are getting for forking over a portion of their paycheck to the union.

This act is simply unfair. Bear in mind that in much of the country where "closed shops" exist, if a workplace unionizes, individual workers have no choice but to pay the union dues, which go to the union bosses and to political action.

Secret ballots are a cornerstone of democracy. This act damages workplace choice and democracy. It should be defeated but will probably become law.

Jon Stewart Takes on Jim Cramer
No way I'm missing The Daily Show tonight. Talented liberal comedian Jon Stewart takes on his recent dueling partner CNBC's (actually fairly liberal, at least until recently) Jim Cramer.

It all started when Jon Stewart did a piece on CNBC's reporting, citing many shortcomings in the network's coverage of the market run up, most notably blasting Cramer for his infamous "Bear Sterns is fine" remark 72 hours before Bear Sterns collapsed. Cramer responded in the press that he had been quoted out of context and was simply saying in the piece that people's deposits were safe with Bear Sterns. Stewart responded by showing clips of Cramer a few weeks earlier urging viewers to buy the stock. This should be fun.

I feel some empathy for Jim Cramer, who seems like a decent guy. Cramer made some god-awful stock picks recently, but I could apply that to a lot of people, myself included. But Stewart isn't wrong about CNBC in general. Cozying up to CEOs, not asking the tough questions and relentlessly pushing the theory that people could outsmart the market have all been negative forces that have driven market volitility.

Incidentally -- since Republicans for the past 2 months have attempted ot peg President Obama's performance to the stock market, claiming he was responsible for all the decline, does this week's rally mean he is now doing a good job? How about an alternative -- let's wait a year before we start handing out the stock market report cards.

If you like this site, tell your friends.

No comments: