Unions die. america runs out of fuel. – fabius maximus website electricity in india travel


Summary: Generations of unceasing work – carefully planned, lavishly funded – by the 1% to roll back the New Deal have succeeded on an epic scale. Their greatest success has been crushing labor unions, which were one of the strongest forces building a large middle class in America. But greed is a dangerous master. Now comes the results. It is not pretty. The story of America’s decline, in pictures

“Forty years ago, about quarter of American workers belonged to unions, and those unions were a major economic and political force. Now union membership is down to 11.2% of the U.S. workforce, and it’s increasingly concentrated in the public sector – only 6.7% of private-sector workers were union members in 2013. …

Businesses have gained more power over workers by many means. Increased concentration in many industries. Pushing wages down via massive immigration and H-1B visas. Illegal wage fixing, such as that among the big Silicon Valley corporations. They shifted their workers into part-time and contract arrangements (temp agencies, independent contractors, and overseas outsourcers). They used their rising political power to remove the protections unions gained during the New Deal.

Now comes the next phase, the pursuit of a broken foe. On Friday, Trump weakened the role of unions for Federal workers and weakened their civil service protections ( details). Soon the Supreme Court will rule against mandatory fees to unions for non-members covered by collective bargaining agreements ( details).

The result: high corporate profits and income inequality back to pre-New Deal levels. It is happening across the developed world. See this Credit Suisse graph of union membership vs. income share of the bottom 90% of workers in the OECD. Union member falls – and 90% of workers’ income share follows.

We have a consumer-driven economy. Channeling more of America’s income to corporate profits (channeled into stock buy-backs) and incomes of the 1% boosts savings – explaining our low interest rates (the Fed is not doing it). The economy cannot grow much faster than the growth of workers’ wages.

So where is the money going? Into buying things. Stocks are at near-record valuations. Home prices are soaring in hot areas. And art! An untitled 1982 painting by Jean-Michel Basquia sold for $110.5 million in May 2017. Leonardo da Vinci’s “Salvator Mundi” sold for $450 million in November 2017.

Meanwhile, since 1982 the American middle class has used debt to maintain its lifestyle, with consumer debt rising faster than Gross Domestic Income (many things went wrong beginning in the Reagan years). But that is only a short-term solution.

• Elon Musk has perfected State Capitalism, perhaps the next phase of corporate profits. Local governments shower his companies with benefits. Government regulations transfer tax credits to his company. He provides cars for the rich and services to the government (that the government once provided).

This is America today. On the Right we have those who use the government to exploit us, to whom we are marks to be exploited. On the Left we have those who use the government to restructure our society, treating us as lab rats. This is our lot in life in a world where the meek inherit nothing.

“While many of your individual points make good advice, they seem like they would be a holding action. So everyone institutes whatever scheme of personal economy you like through some great awakening of will and morality – does this make the trends stop? What happens in ten years? What if mass adoption of these efficiencies causes other problems?”

Are you worried that mass adoption of better spending habits (frugality) and morality will lead to other problems? I guess this is where worldviews part ways. Being an Old Side Protestant, I can’t see how that would happen. “Righteousness exalts a nation.” As Calvin said, bad governments are a punishment on wicked people. (ICR 4.20.25, Battles’ translation) This is generally true. We are here to “reignite the spirit of a nation grown cold” are we not?

I can think of other ways of getting to work besides owning a car. Look at how illegal immigrants carpool! I remember my dad doing this early in his career so he could save money. You can also save a couple of paychecks and buy a used one. Or save one paycheck and buy a really used one. You can also live close to work and walk.

Having thought about this, I think the issue is causation. There is no doubt of the phenomenon of private sector union decline, as shown in the chart. There is also no doubt about the correlation between that and the share of income decline as shown in the other chart.

The question is whether both of these things have a common cause, or whether the decline in private sector unions is the main cause. The same question arises about the Galbraith explanation: were static working class incomes the cause of the crash, or were they and the bubble both the result of an underlying causal mechanism?

Fischer suggests that deficits are associated with lower interest rates because they occur in periods of recession. Recession lowers tax receipts, thus leading to deficits. The recession also leads to lack of investment which in turn, with other features of the recession, lowers debt issuance, and demand having fallen, interest rates fall to clear.

Generations of unceasing work – carefully planned, lavishly funded – by the 1% to roll back the New Deal have succeeded on an epic scale. Their greatest success has been crushing labor unions, which were one of the strongest forces building a large middle class in America

It has an uncomfortably conspiratorial sound. But the question you have to answer, even if you accept there is a conscious conspiracy on the part of some to undo the New Deal, is why it has succeeded. Why have the turkeys voted for Christmas?