Morning Report – Jobs day 10/22/13

Vital Statistics:

Last Change Percent
S&P Futures 1742.5 4.3 0.25%
Eurostoxx Index 3046.0 17.4 0.57%
Oil (WTI) 99 -0.2 -0.22%
LIBOR 0.238 0.000 -0.10%
US Dollar Index (DXY) 79.48 -0.213 -0.27%
10 Year Govt Bond Yield 2.54% -0.06%
Current Coupon Ginnie Mae TBA 103.6 0.6
Current Coupon Fannie Mae TBA 102.4 0.6
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.34
Markets are higher on the back of a weaker-than-expected jobs report. Bonds are flying on the report, which has the 10 year down 6 basis points to 2.54%. MBS are up as well, and we are no best-exing into a 3.5% coupon. Later on today we will get international capital flows, construction spending, and Richmond Fed.
The economy created 148k jobs in September, lower than expected. August was revised upward. The unemployment rate fell to 7.2% while the labor force participation rate remained the same at 63.2%, a level we haven’t seen since the late 70s. The last time the labor force participation rate was this low, “Three Times a Lady” by the Commodores was topping the charts. The workweek stayed the same at 34.5 hours and earnings increased .1%.
Overall the jobs report is weak enough to take any sort of December tapering off the table. Don’t forget these numbers predate the shutdown, so October’s numbers will invariably be worse.
Existing Home Sales dropped to a seasonally adjusted annual rate 5.29 million units in September, according to the National Association of Realtors. Distressed sales accounted for 14% of sales,and cash sales were 33%. Inventory was steady at 5 months of supply. The median house price rose 11.7% year-over-year to $199,200.

90 Responses

  1. An interesting article in the NYT tittled A Problem for Fee Market Moralists. It takes on some of the underpinnings of libertarian/objectivist thought and poses four questions that underly the philosophy:

    {abridged from the original}

    1. Is any exchange between two people in the absence of direct physical compulsion by one party against the other (or the threat thereof) necessarily free?

    2. Is any free (not physically compelled) exchange morally permissible?

    3. Do people deserve all they are able, and only what they are able, to get through free exchange?

    4. Are people under no obligation to do anything they don’t freely want to do or freely commit themselves to doing?

    Before answering, make sure to read the hypotheticals in the article. Question 3 in particular has to do with the right to inherited wealth and more pointedly to the reverse. In connection with yesterday’s comment that we should eliminate the middleman and make the elderly directly dependent on their children, what right does a parent have to claim the wealth and labor of their children?

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    • yello:

      what right does a parent have to claim the wealth and labor of their children?

      It depends upon the relationship they have had with their children, but certainly if the answer to this is “none”, then the answer to the obvious riposte, what right does a parent (or even non-parent) have to claim the wealth and labor of those who are not their children, is also “none”.

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    • yello:

      Question 3 in particular has to do with the right to inherited wealth and more pointedly to the reverse.

      Actually question three has nothing to do with inherited wealth, despite the author’s claim to the contrary. The question of what is “deserved”, or more plainly what one has a right to, is a function of the person passing the wealth on, not the person to whom the wealth goes. No one “deserves”, or has a right to, inherited wealth. Not the relatives, nor the charity, nor the government. But the person who is passing the wealth on does “deserve”, or has a right to, decide for himself to whom he will give the wealth. So if question three is supposed to be focused on whether wealth should be allowed to be inherited, it is asking precisely the wrong question.

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    • yello (from the article):

      Since she undertakes these acts of exchange not because of direct physical coercion by another, but only because she is compelled by hunger and a lack of alternatives, they are free.

      Yes, they are free. There ought be nothing particularly controversial about saying so. The implication, for the libertarian viewpoint, is that since they are free, there ought be no law preventing her from engaging in prostitution or selling her organs. I agree with that. What the implication is not, of course, (despite the authors attempt to make it appear so) is that society is therefore incapable of objecting to such a circumstance, and taking steps to make other alternatives available to her.

      What the author seems unable to grasp is that acts of charity/kindness can (indeed must by definition) also be free.

      Since you consent to this exchange, there’s nothing morally problematic about it.

      Lots of unexplained questions in the hypothetical situation (eg how has the poor, landless neighbor been surviving prior to your offer?), but in the absence of any answers to those questions, there is nothing morally problematic about it.

      If you say yes, then you think the only moral requirements are the ones we freely bring on ourselves — say, by making promises or contracts.

      Incorrect. We all have the moral requirement not to deal with others through coercion.

      Suppose I’m walking to the library and see a man drowning in the river. I decide that the pleasure I would get from saving his life wouldn’t exceed the cost of getting wet and the delay. So I walk on by. Since I made no contract with the man, I am under no obligation to save him.

      Again, lots of unanswered questions in the hypothetical, but the relevant question is whether or not the drowning man has a right to your assistance. I say he does not. I don’t see how your state of mind, ie the reasoning behind why you would or would not provide assistance, has any relevance with regard to his rights.

      When I lived in Hong Kong, I lived on the south side of the island near the town of Stanley. There was a road right along the shore where there was a bunch of bars and restaurants. Across the road was a seawall. One night after a storm the tide was high, right up against the seawall, and the water was very rough. A teenager fell in the water and was getting battered by the waves. He was going to drown. A man in one of restaurants, the father of 2 and a strong swimmer, who had been dining with his wife dove in and tried to save the kid. The kid eventually saved himself by managing to climb on a rock. The guy who dove in drowned. Was he morally obligated to try to save the kid?

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  2. The constructs of the story are ridiculous… Let’s define a “free market” situation and then stipulate that market forces cannot operate.

    The idea that the starving woman could find no other way to eke out a living aside from selling her organs or resorting to prostitution is ridiculous. People always have choices and her labor is worth more than zero. Same thing with the guy who works the field for a dollar a day. The value of his labor is worth more than $1 and in a competitive marketplace he will earn a wage high enough to compensate him and the farmer for the risks they take.

    And with regard to #3, I would much rather write music for a living than crunch numbers, but the value of my number crunching is worth more than the value of my music. It is a choice. And I have no issues with inherited wealth. It isn’t as if that wealth is taken from anyone else.

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    • The idea that the starving woman could find no other way to eke out a living aside from selling her organs or resorting to prostitution is ridiculous.

      Victor Hugo would beg to disagree. Anne Hathaway won an Oscar for portraying a character in precisely this situation.

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    • Brent wrote: The constructs of the story are ridiculous. Let’s define a “free market” situation and then stipulate that market forces cannot operate.

      I accept capitalism in theory. I don’t, for instance, accept Marxism, feudalism, mercantilism, or fascism in theory. In operation, you know as well as I that perfect competition with total information and mobility does not always exist, and these are preconditions to the free market working to optimize production and allocation of resources. Scott thinks that monopolies [and I assume oligopolies, by inference] need only fear competition for the competitive market to work. As to both your
      criticism of the “starving woman” example and Scott’s postulate of benign monopoly, I say the real world intervenes. First, the starving woman example: in the real world her mobility is limited and her information is limited. She is at a bargaining disadvantage that defies optimal capitalism. Second, Scott’s benign monopoly: it meets new entrants by buying them out or by pricing below cost to drive them out. We all know this, so while we want to push the mechanisms that spread capitalism, we should be aware of these limitations that life throws at us. Thus JNC and I are strong AT proponents and we like the power of bkcy courts. We say these things as defenders of the competitive system. But for myself, I have always believed that opportunity should be equally available. That is a political decision but for me it is fueled both by the Jeffersonian construct and by a belief that it is at the foundation of competitive capitalism. Thus I strongly support some [usually local] government initiatives like community colleges and public schools and public libraries. YMMV.

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  3. “Suppose a woman and her children are starving”

    Well, how did she end up in that situation in the first place? You show me bad luck, and I’ll show you bad choices.

    Besides, the absence of government aid doesn’t require that charity not exist. However, voluntary charity organizations are often better at culling the deserving poor from the undeserving poor than government programs.

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  4. Plus, if you take the egalitarian theme to the extreme, you end up with being unable to explain away the free rider problem. If everyone is compensated the same whether or not they work, why would anyone ever work? And if no one works, how will there be any wealth to redistribute?

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    • If everyone is compensated the same whether or not they work, why would anyone ever work? And if no one works, how will there be any wealth to redistribute?

      Thank you for decimating the pure Communism strawman. Let’s hope nobody ever tries that system.

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  5. “This rise in Nozickian thinking coincides with a dramatic increase in economic inequality in the United States over the past five decades — the top 1 percent of Americans saw their income multiply by 275 percent in the period from 1979 and 2007, while the middle 60 percent of Americans saw only a 40 percent increase.”

    This does not constitute proof of the cause. I.e, I’d argue and I’m sure that Scott will disagree, that at least when it comes to finance, a lot of the recent drive in inequality is due to successful rent seeking and other types of crony capitalism and not the result of the free market.

    The solution is to address those issues at the source, not simply redistribute the ill gotten gains to politically favored classes.

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    • jnc:

      I’d argue and I’m sure that Scott will disagree, that at least when it comes to finance, a lot of the recent drive in inequality is due to successful rent seeking and other types of crony capitalism and not the result of the free market.

      That may be true. But of course I am all for reducing, not increasing (as you seem to be) government regulation of the finance industry, since it is through such regulation that any rent seeking and crony capitalism is achieved.

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      • jnc:

        In regards to rent-seeking, Dodd-Frank presents a great opportunity for some. I think I mentioned some time ago that literally on the day that clearing become mandatory, the London Clearing House increased all its fees, now that they have a legally captured clientele. They also changed their formula for calculating initial margin, and now require almost double IM than what they required previously. And on that IM, which, again, banks are legally obligated to post, they pay Fed Funds-20, which at current FF levels means a negative interest rate. That’s right. I have to actually pay LCH to hold collateral, required by law, over and above the actual present value of my positions. Did I mention that I am required by law to do this? How’s that for rent-seeking?

        Or how about this new requirement to trade certain derivatives on a Swaps Execution Facility? Only products that are designated Made Available to Trade (MAT) must by law be traded on a SEF. How does a product become MAT? A SEF simply needs to declare to the CTFC that it wants to designate a given product to be MAT. Of course, since the SEFs get paid per trade done on the SEF, they have a financial incentive to designate as much as possible to be MAT. Most SEFs have been designated such simply out of necessity, ie they have long had business revenues outside of the SEF mandate, and in order to protect those streams they need to also be a SEF. However, one company called Javelin was created specifically to be a standalone SEF. That is, it’s only possible revenue stream derives from SEF business. Shockingly (snicker), just yesterday Javelin became the first SEF to apply to CTFC for MAT designation of given products, and even more shockingly (snicker again) their application includes the widest array of products possible across 3 currencies, even including non-standard interest rate swaps. So if (when) CFTC approves their application, suddenly all kinds of trades that now take place for free between two willing counterparties will then have to go through Javelin for a fee.

        Yes, some people in finance are going to get very rich from this rent-seeking. And it is the regulations, not that lack of them, that allows it.

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  6. “if you take the egalitarian theme to the extreme”

    You don’t even have to take it to the extreme. Children are starving in India and Africa every day. There should be massive taxes on the American middle class (actually part of the global 1%) to redistribute to them. Anything less is an embrace of Somalia like anarchy as a moral system.

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  7. “Thank you for decimating the pure Communism strawman. Let’s hope nobody ever tries that system.”

    Isn’t your whole initial post intended to decimate the pure free-market anarchist strawman? Especially since the NYT philosopher assumes away any of the positive parts of the free market.

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    • Brent:

      Isn’t your whole initial post intended to decimate the pure free-market anarchist strawman?

      One of the benefits of rejecting logical consistency is that you get to apply standards to others that you yourself are not beholden to.

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  8. “Let’s hope nobody ever tries that system.”

    Someone should tell Altheia.

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  9. Scott, just having a hard time getting my head around this whole “free market but no choice” construct… It hurts…

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  10. I think a lot of the recent increase in inequality is due to a Fed policy that manipulates markets in order to boost asset prices. If you have assets, you are benefiting from QE and since you have assets you are probably rich. Those who rely on wage income don’t get anything out of QE.

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    • Those who rely on wage income don’t get anything out of QE.

      What would help? Other than obvious things like increasing the minimum wage or limiting CEO salaries or taxing capital gains more heavily?

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  11. “not increasing (as you seem to be) government regulation of the finance industry, “

    Nope. I just want anti-trust enforcement to break up TBTF banks so that there can be less regulation.

    You’ll probably argue that anti-trust is itself regulation, but I’d argue that’s preferable to the micromanagement that will be the standard practice post Dodd-Frank.

    Edit: I agree with Paul Krugman’s characterization of various arguments that banks were “entitled” to TARP

    “This isn’t libertarianism; it’s a demand for special treatment. It’s not Ayn Rand; it’s ancien régime.”

    http://www.nytimes.com/2013/09/27/opinion/krugman-plutocrats-feeling-persecuted.html

    I don’t actually think that Benmosche is the best example of that, but this guy certainly is:

    ““You should thank God” for bank bailouts, Munger said in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.” ”

    http://www.bloomberg.com/news/2010-09-20/berkshire-s-munger-says-cash-strapped-should-suck-it-in-not-get-bailout.html

    and especially this guy:

    “Harry Binswanger, Contributor
    9/17/2013 @ 8:00AM
    Give Back? Yes, It’s Time For The 99% To Give Back To The 1%

    For their enormous contributions to our standard of living, the high-earners should be thanked and publicly honored. We are in their debt.

    Here’s a modest proposal. Anyone who earns a million dollars or more should be exempt from all income taxes. Yes, it’s too little. And the real issue is not financial, but moral. So to augment the tax-exemption, in an annual public ceremony, the year’s top earner should be awarded the Congressional Medal of Honor.”

    http://www.forbes.com/sites/harrybinswanger/2013/09/17/give-back-yes-its-time-for-the-99-to-give-back-to-the-1/

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    • jnc:

      I just want anti-trust enforcement to break up TBTF banks so that there can be less regulation.

      Deutsche Bank, to take just one of many examples, has been deemed to be a systemically important bank (ie TBTF). Can you tell me what anti-trust laws should be enforced against it that would precipitate its break-up?

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  12. How would limiting CEO pay or taxing capital gains more heavily help those on wage income?

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    • How would limiting CEO pay or taxing capital gains more heavily help those on wage income?

      They wouldn’t. But they seem to be common suggestions. Mostly on the idea that if one end of the balloon were squeezed it would somehow bulge out in a different area.

      What would have to happen for the table to shift back to labor (and by labor I mean all wage earners) and away from finance? I don’t mean to be all Marxist but capital does seem to have the upper hand.

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  13. “limiting CEO salaries or taxing capital gains more heavily?”

    Addressing income inequality by making disfavored classes poorer.

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  14. Brent, the goal isn’t to help those on wage income. It’s to make the rich poorer.

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  15. Labor has to either gain skills that demand higher wages due to increased value (i.e. the usual arguments about education, etc), or form economic entities to bargain collectively, i.e. unions, to the extent that they can do so without being outsourced or the jobs being relocated.

    This was an interesting example of a bit of both:

    http://www.pbs.org/newshour/bb/business/july-dec02/ports_10-03.html

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  16. “What would have to happen for the table to shift back to labor (and by labor I mean all wage earners) and away from finance? I don’t mean to be all Marxist but capital does seem to have the upper hand.”

    An economic recovery… The animal spirits return and business becomes so good it drives up the cost of labor. When businesses fear missing out on revenue more than they fear that their costs are too high.

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  17. “Someone should tell Altheia.”

    I’m embarrassed for her.

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  18. Scott, does this arrangement make LCH and Javelin the counterparties on all swaps trades now?

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    • Brent:

      Scott, does this arrangement make LCH and Javelin the counterparties on all swaps trades now?

      There are two primary clearing houses, LCH and CME. At the moment, in the fixed income swaps space, LCH dominates. I think they clear something like 80% of all market swaps. And, given the onerous initial margin rules, it doesn’t make a lot of sense to maintain positions in both places. Imagine if you do two completely and offsetting deals on LCH. Since you have no net risk position, you won’t have to post any initial margin. However, if you do one deal on LCH and the other on CME, even though your own market position is totally neutral, each clearing house has potential risk to you as a counterparty, so each will require that you post IM. So on a completely no-risk position you would end up posting double the amount of IM. So the tendency over time will be to eventually force all risk into one clearing house. So ultimately yes, LCH and/or CME will be the counterparty to pretty much all inter-bank trades.

      With regards to Javeline, they are a SEF, so not really a counterparty. Really they are functionally just a broker, but with an electronic platform through which prices can be seen and trades will be processed, rather than via voice. And there are lots of registered SEFs, so Javelin won’t necessarily capture everything. But I think originally the vision of SEFs was that they would act sort of like a futures exchange, on which standard, plain vanilla swap prices would be quoted and traded. And most SEFs (from what I can tell) have been set up to facilitate these types of standard deals. What Javelin seems to be doing is trying to force not just plain vanilla deals, but also non-standard (amortizing, forward starting, odd dates, stub periods, basically any kind of structured trade) through a SEF platform. And if they are the only SEF, or one of the only SEFs, to be set up to manage these kinds of non-standard swaps, then they can capture that niche once traders are forced to deal through a SEF. And, again, whether traders are forced to deal through a SEF is by law a function of what SEFs themselves choose to designate MAT.

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  19. An economic recovery

    It’s been so long, I’ve forgotten what one of those looks like. There were times in the 90s when fast food chains were paying upwards of ten bucks an hour.

    form economic entities to bargain collectively, i.e. unions,

    Yet much of conservative effort in the past decade has been aimed at breaking the power of unions of groups which cannot offshored, teachers, firefighters, police, etc while thwarting efforts to organize retail and service workers.

    The only trade guild with any power anymore seems to be the AMA.

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    • yello:

      Yet much of conservative effort in the past decade has been aimed at breaking the power of unions of groups which cannot offshored, teachers, firefighters, police, etc

      The relevant characteristic of these groups is not that they cannot be offshored, but that they are all public sector unions, which present their own unique set of problems. I don think it makes sense to speak of public sector unions in the same way that we speak of private sector unions.

      …while thwarting efforts to organize retail and service workers.

      What efforts do you have in mind?

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      • What efforts do you have in mind?

        You get fired from WalMart for saying the word ‘union’ out loud.

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        • yello:

          You get fired from WalMart for saying the word ‘union’ out loud.

          You claimed that “…much of the conservative effort in the past decade has been aimed at…thwarting efforts to organize retail and service workers.” I don’t think what Walmart does as a matter or corporate policy can be sensibly understood to be what “conservatives” do as a matter of political policy. I am curious what “conservative efforts” you have in mind.

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  20. public employees shouldn’t be able to unionize. serve at the whim of the executive. and I included teachers in that. edit. actually, i really don’t care anymore.

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  21. “Yes, some people in finance are going to get very rich from this rent-seeking. And it is the regulations, not that lack of them, that allows it.”

    Don’t dispute that at all, but if there’s minimal regulations, then banks have to be allowed to fail. If they are Too Big To Fail, then they are too big to exist and should be broken up through anti-trust enforcement. That’s the cleanest free market solution I can come up with.

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    • jnc:

      Don’t dispute that at all, but if there’s minimal regulations, then banks have to be allowed to fail.

      I agree.

      If they are Too Big To Fail, then they are too big to exist and should be broken up through anti-trust enforcement.

      TBTF is a political designation, not an objective fact of reality. I say get rid of the political designation.

      What I refuse to accept is a situation where there’s minimal regulation and the expectation of bailouts in perpetuity.

      As far as I know JPM, the current poster-boy for TBTF, didn’t “expect” a bailout. They didn’t even want it. You seem to want to blame the banks for the decisions of the politicians. I’d also point out again that “bailout” isn’t exactly the right word, despite its constant use. The government actually made money on the funds lent to the banks.

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  22. “Can you tell me what anti-trust laws should be enforced against it that would precipitate its break-up?”

    I don’t have any evidence of anti-competitive behavior handy for Deutche Bank, so it would probably require new legislation with a market cap or some other mechanism. There’s also ways to structure an effective tax through reserve requirements to discourage this which I believe Jon Huntsman proposed.

    What I refuse to accept is a situation where there’s minimal regulation and the expectation of bailouts in perpetuity.

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  23. public employees shouldn’t be able to unionize

    they are all public sector unions, which present their own unique set of problems.

    I’m not sure what seems to be the distinction that is so problematic. Unions do more than collective bargaining. One important function is protection from arbitrary and capricious management activity. Since most public sector employers are de jure, not even de facto, monopolies, the need for labor representation in disputes is even more important than in private industry where one can theoretically walk with their feet to a different employer.

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    • yello:

      I’m not sure what seems to be the distinction that is so problematic.

      See here. In short:

      In effect, public sector unionism thus means that representatives of the union will often be on both sides of the collective bargaining table. On the one side, the de jure union leaders. On the other side, the bought and paid for politicians. No wonder public sector union wages and benefits are breaking the back of state budgets. They are bargaining with themselves rather than with an arms’-length opponent.

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  24. I don’t think what Walmart does as a matter or corporate policy can be sensibly understood to be what “conservatives” do as a matter of political policy

    Rly? That’s a level of parsing I can’t even unthread. I assume you are saying that the richest five people in America who fund a variety of conservative causes are No True Scotsmen. But WalMart did recently withdraw from ALEC, so there’s that.

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    • yello:

      I assume you are saying that the richest five people in America who fund a variety of conservative causes are No True Scotsmen.

      You have made this charge before, in other contexts. I think it is clear that you really don’t understand the No True Scotsman fallacy.

      I haven’t argued that no true conservative would ever try to thwart an effort to unionize. I am simply pointing out the obvious, ie that identifying a conservative who does so is no justification for the generalization that “conservatives” as a class do so. The problem is that you automatically associate the actions of a particular private citizen with the political ideology which he supports. There is no justification for this association, or, at the very least, you haven’t presented one.

      If the Republican House had passed a bill preventing workers from unionizing, then your charge would make sense. If Republican governors has signed such bills, your charge would make sense. But as it is your claim is little different to a claim that liberals are liars, as evidenced by the fact that Obama, who is a liberal, told everyone during his campaign that if they liked their health care coverage, they could keep it under his plan.

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      • If Republican governors has signed such bills, your charge would make sense.

        So exactly what did happen in Wisconsin?

        I’m not quite sure whether you are arguing that conservative aren’t anti-union or that that policies they advocate don’t adversely impact unions.

        The Walton family opposes unions. The Walton family funds conservative groups which oppose unions. Are you saying the Waltons aren’t conservative or that conservative groups don’t oppose unions? What dots am I not connecting?

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        • yello:

          I’m not quite sure whether you are arguing that conservative aren’t anti-union or that that policies they advocate don’t adversely impact unions.

          Neither. At first I was just asking for an example of these conservative efforts you had in mind. Since you invoked “conservativsm”, I thought you were talking about some political policy initiatives. I hadn’t realized you just meant private citizens who happen to be conservative, acting in their capacity as business owners.

          Ah, we are narrowly defining the concept of ‘anti-union’…

          The phrase “anti-union” wasn’t used by me, or anyone as far as I can tell, until you just did, so defining it, narrowly or broadly, was never an issue as far as I can tell.

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        • I thought you were talking about some political policy initiatives. I hadn’t realized you just meant private citizens who happen to be conservative, acting in their capacity as business owners.

          You are really trying to defend this line of reasoning. I absolutely cannot figure out how this distinction is a difference. If the Waltons oppose unions that is what makes them conservative. If they supported unions then they would be liberal. Unless in your universe the work of ALEC and other conservative groups is completely union indifferent.

          Most people characterize ALEC as both conservative and anti-union. If you don’t consider then anti-union, then we have a definitional problem. If you don’t consider them conservative then I double down on the No True Scotsman claim.

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        • yello:

          I realized I missed an earlier question:

          So exactly what did happen in Wisconsin?

          As I said, I think a distinction needs to be made between public sector unions and private sector unions. What happened in Wisconsin is that the governor signed legislation making it more difficult for public sector unions to operate. As far as I know the legislation did not effect private sector unions at all.

          Also, from your more recent:

          I absolutely cannot figure out how this distinction is a difference.

          I think there is big difference between the owner of a business not wanting his employees to become unionized and a political movement passing (or trying to pass) laws that make unionizing more difficult.

          If you don’t consider [ALEC] anti-union, then we have a definitional problem.

          Whether they are anti-union or not, what I was originally after was the efforts you had in mind which made unionizing more difficult. I have waded through both your link and the link inside it, and despite repeated references to “laws against” unions, the only actual laws that are ever identified are 1) laws that effect only public worker unions and 2) the previously mentioned right-to-work laws, which I agree do weaken the power of private sector unions, but I disagree that they do anything to prevent unions from organizing willing workers.

          If you don’t consider them conservative…

          I am happy to take your word for it that they are conservative.

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  25. Scott, I think the easiest example as a matter of policy would be right to work laws. I happen to agree with them, but I’ll definitely concede that they weaken labor.

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    • jnc:

      Scott, I think the easiest example as a matter of policy would be right to work laws. I happen to agree with them, but I’ll definitely concede that they weaken labor.

      That is a reasonable example, although I wouldn’t characterize such laws as “thwarting efforts to organize”. I would characterize them as thwarting efforts to pressure unwilling workers into having to organize.

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  26. I would characterize them as thwarting efforts to pressure unwilling workers into having to organize.

    Ah, we are narrowly defining the concept of ‘anti-union’ well beyond its commonly held meaning. Now I’m back at the ATiM I’m familiar with.

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  27. “I would characterize them as thwarting efforts to pressure unwilling workers into having to organize.”

    Which has the effect of weakening labor. I happen to find the coercion involved to be more of an issue than the impact to labor as far as trade-offs go, but I’m not going to pretend that the Republican party is pro-organized labor.

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    • jnc:

      Which has the effect of weakening labor.

      Of course.

      …but I’m not going to pretend that the Republican party is pro-organized labor.

      I’m not pretending such a thing either. I guess I just do not equate being “anti-labor” as labor is currently constituted with policy prescription designed to stop unionization. I definitely would not characterize myself as pro-labor, but nor am I in favor of any political policy that would prevent people who want to organize into a union from doing so. People ought to be free to organize into a union or not, as they wish. Does that make me pro-organized labor or anti-organized labor? Does that make me in favor of strengthening unions or weakening unions?

      Like

      • Does that make me in favor of strengthening unions or weakening unions?

        The latter. Optional membership in a union creates a free-rider problem that weakens the bargaining power of the union. Are you really that confused?

        Like

        • yello:

          Optional membership in a union creates a free-rider problem that weakens the bargaining power of the union. Are you really that confused?

          No, I am not confused. It doesn’t create a free rider problem, for reasons that jnc has already elaborated on.

          Like

  28. “One important function is protection from arbitrary and capricious management activity.”

    I don’t really separate a Hill staffer from an HHS employee. or NASA or whatever. I consider them political jobs. even the career civil servants. they are part of a political enterprise.

    Like

  29. It’s not really a free rider problem. They need to have monopoly pricing power over the labor supply for a given company to extract the higher wages. In other contexts, this would be considered an economic rent.

    If it was a free rider problem, unions would be fine with simply having those who aren’t covered by the union negotiate their own working conditions, wages, and benefits independently of whatever deal that the union gets. Their real issue is that no one else can be allowed to undercut the union deal.

    Denying the union that monopoly power weakens them the same way that non-OPEC oil producers weaken the cartel’s pricing power.

    Like

    • It’s not really a free rider problem.

      The free rider part comes from non-union members benefiting from the union wage and working conditions either by piggybacking or using a ‘most favored nation’ negotiating strategy without having to pay dues or support strikes.

      Like

  30. ” free-rider problem that weakens the bargaining power of the union”

    I disagree. I did not join the union when I worked at HHS. but I was still hampered by their stupid rules and lock step pay/seniority system. Not only did they offer nothing of value to me, they actively hindered my advancement

    Like

  31. Not only did they offer nothing of value to me, they actively hindered my advancement

    We’d all like to think that but it’s very likely that in lieu of a union agreement you could have been paid much less regardless of you merits.

    Like

  32. “The free rider part comes from non-union members benefiting from the union wage and working conditions either by piggybacking or using a ‘most favored nation’ negotiating strategy without having to pay dues or support strikes.”

    Again, if that was the real issue, then unions would be fine with two wage scales, one for unions and one for non-union. They aren’t and object vociferously whenever it’s proposed as an option.

    The “free rider” rhetoric is simply an attempt to expropriate the language of the free market to make a case for what are fundamentally economic rents.

    It boils down to an argument over whether it should be considered just for workers to be able to extract a wage higher than what the market would normally bear through anti-competitive means.

    Like

  33. perhaps if you are an interchangeable part. but its more than wages. it’s opportunities. and the union makes sure they are not any. b/c it values bodies over productivity.

    how is it that the second I gave notice, they found a way to promote me? despite everything that i’d been told before?

    Like

  34. I’m reading through PL comments right now to catch up, since I’ve been otherwise occupied the last couple of days, and I nominate this as Aletheia’s silliest comment of the day (so far):

    Not their land. Just their businesses. And since a tiny fraction of Americans own businesses, yes, a majority will vote for them to go into the Commons.

    The context seems to be that, if enough of us vote that way, we can take businesses away from their owners and turn them over to the great unwashed, to be run in a fully egalitarian way in order to drive full employment.

    Egad!

    Like

    • As silly as the PL House Marxist is, she is a far sight more entertaining than the constant shrieking of fellow traveler Reagan30YearsAndCounting who I had to put on Ignore just to stay sane.

      And while her left-of-Engels economics are amusing they at least have some intellectual rigor in an consistent mindset and are more thought out than the constant parade of Fox-educated trolls.

      Like

  35. She’s well read, but I grow weary of her assertions that all of this can be done through “pure democracy” and doesn’t require coercion, and that socialism has never been tried because Stalin was a “state capitalist”.

    She keeps saying that her assertions are self evident facts in need of no external support.

    Say what you will about Cao, at least he’s honest with his vision of how capitalism will be eliminated – by executing all the capitalists.

    Edit: I should probably cease engaging her on that point as I tend to devolve to tit for tat with her when she asserts the right to make Nazi and fascist analogies with current conservatives, but takes great umbrage when I compare her approach to 20th century totalitarian communist/socialists countries.

    Also Michi, I’m pretty sure on the original debate I had with her, she advocated for talking all the real property as well. It’s the intellectually consistent thing to do if you want to get rid of concentrated wealth and implement egalitarianism.

    Like

    • Say what you will about Cao, at least he’s honest with his vision of how capitalism will be eliminated – by executing all the capitalists.

      He has history on his side as that is the traditional way it’s done. Italy flirted with some very dark pink parties in the 70s but I can’t recall any developed democracy (hedged to exclude Argentina and Chile) voting in communism, the warnings of Sarah Palin to the contrary.

      Like

  36. Also:

    “I nominate this as Aletheia’s silliest comment of the day ”

    Silliest one yesterday was that the healthcare.gov site could have been easily done with WordPress and some plug ins.

    Like

  37. I missed all day yesterday, but that wouldn’t surprise me to be the silliest one.

    the constant shrieking of fellow traveler Reagan30YearsAndCounting

    I had to put him on ignore months ago for the very same reason.

    Like

    • I had to put the whole place on ignore 2 years ago.

      Like

      • Happy yet?

        Three years after the disastrous launch of the Affordable Care Act, most of the website troubles finally have been ironed out. People are now able to log on to the government’s ACA website and to most of the state health-insurance exchanges. The public has grudgingly come to accept higher insurance premiums, new taxes and increases in part-time workers who were formerly full-time. But Americans are irate anyway—because now they’re seeing the health-care law’s destructive effect on the fundamental nature of the way their care is delivered.

        Even before the ACA’s launch in 2013, many physicians—seeing the changes in their profession that lay ahead—had begun talking their children out of going to medical school. After the launch, compensation fell, while nothing in the ACA stopped lawsuits and malpractice premiums from rising. Doctors must now see many more patients each day to meet expenses, all while dealing with the mountains of paperwork mandated by the health-care law.

        The forecast shortage of doctors has become a real problem. It started in 2014 when the ACA cut $716 billion from Medicare to accommodate 30 million newly “insured” people through an expansion of Medicaid. More important, the predicted shortage of 42,000 primary-care physicians and that of specialists (such as heart surgeons) was vastly underestimated. It didn’t take into account the ACA’s effect on doctors retiring early, refusing new patients or going into concierge medicine. These estimates also ignored the millions of immigrants who would be seeking a physician after having been granted legal status.

        It is surprising that the doctor shortage was not better anticipated: After all, when Massachusetts mandated health insurance in 2006, the wait to see a physician in some specialties increased considerably, the shortage of primary-care physicians escalated and more doctors stopped accepting new patients. In 2013, the Massachusetts Medical Society noted waiting times from 50 days to 128 days in some areas for new patients to see an internist, for instance.

        Like

        • The non-ideological Obama administration will be briefing members of congress today on the Obamacare rollout. Or I should say Democratic members of congress.

          A true uniter and representative of all the people, that Obama.

          Like

  38. jnc:

    Maybe immigration reform is just resting.

    That reminds me of Brian’s and my joke when we would see a deer (or whatever) lying by the side of the road: “He’s just sleeping.”

    Like

  39. It is surprising that the doctor shortage was not better anticipated:

    This is extraordinarily old news to any of us who have been involved in educating physicians/future physicians in the last 15 years. Blame the AMA and state legislatures, not the ACA. The UU has been seeking to increase their class size since at least 1996.

    Like

    • Mich:

      Blame the AMA and state legislatures, not the ACA.

      The existence of a pre-ACA doctor shortage caused by non-ACA factors in no way at all suggests that ACA itself won’t also cause further and exacerbated doctor shortages. And it is highly likely that it will.

      Anecdotally, I know doctors who are, because of ACA, already making precisely the decisions predicted in the article.

      Like

  40. I thought a labor protection entity like the AMA was a good thing? It’s the only way we know of in this Conservative world to help increase wages. Why aren’t we celebrating the organization rather than demonizing it?

    Rawls weeps.

    Like

  41. ACA itself won’t also cause further and exacerbated doctor shortages.

    I probably worded that poorly. This is not a surprise to anyone inside the educational community. Again, the ACA in-and-of itself is not to blame for this.

    I thought a labor protection entity like the AMA was a good thing?

    There can be too much of a good thing.

    Like

    • Mich:

      Again, the ACA in-and-of itself is not to blame for this.

      BTW, the existence of known shortage pre-ACA makes support and passage of ACA all the more indefensible.

      Like

  42. ACA was a missed opportunity to address provider shortages.

    But that means a fight over scope of practice. And that means billable hours.

    Like

  43. It also means further Federal usurpation of State regulatory power.

    That’s always a good thing, no? It’s imperative forD.C. To determine what Casper, WY needs.

    Like

  44. the existence of known shortage pre-ACA makes support and passage of ACA all the more indefensible.

    Uh, no. I don’t think I’ve ever seen you make such a leap of logic before.

    Like

    • Mich:

      Uh, no. I don’t think I’ve ever seen you make such a leap of logic before.

      If one is faced with a shortage of people performing a certain task, it seems to me the last thing one would want to do is pass a law that makes performing that task even less attractive than it was before. Call me crazy, I guess.

      Like

  45. “t also means further Federal usurpation of State regulatory power”

    oh, this is going to happen at the state level.

    Like

  46. My money’s on the wage protection organization called the AMA. When it and the State decide it’s fair percentage, they’ll allow an expansion.

    Like

  47. Is the talking point now “oh, of course premiums were going to go up. Because it cost more to cover more people”

    b/c I recall being laughed out of the room for such hearsay heresy before.

    Like

    • nova:

      b/c I recall being laughed out of the room for such heresy before.

      The things people will believe when they really want to it quite staggering. Science-denying religious fundamentalists have nothing on those who believed the manifestly absurd things Obama promised would come with ACA.

      Like

  48. hearsay or heresy?

    Like

  49. do’h. fixed.

    Like

  50. true, Scott. t’s one thing to believe them. It’s quite another to pretend those promises never happened.

    Like

  51. Still a worthwhile stroll down memory lane regarding efforts by the Federal government to “fix” the healthcare system.

    Like

  52. “Thus was Medicaid born, with little appreciation of the imminent aging of America(accelerated by the health care provided by Medicare and Medicaid) or the separation of family generations that a mobile society would encourage.”

    This is an interesting point and really gets to the crux of the issue. What may have been unintended has been embraced. I think there’s a push to simple cut family ties. Don’t stay near home and care for family, find yourself and move away. the state will look after mom.

    Like

    • nova:

      This is an interesting point and really gets to the crux of the issue.

      I very much agree with you on this. In fact I think it is a wider problem with progressive policy in general. Although progressive rhetoric is so often full happy-talk about “community”, progressive policies actually often act to the detriment of a sense of real community and communal obligations. “The state should fix this problem…that’s why I pay taxes!”

      Like

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