Editorials of Note

There was a good editorial in the Washington Post this morning entitled Party purges.  It’a about the polarization of American politics.  The editorial also announces that the Post is going to provide a forum over the next few months to discuss the issue in more detail.  I intend to participate.  Here’s an excerpt that explains the Post effort:

Is there a way to push back against the movement toward partisanship and paralysis — to carve out some space for those who strive to work across party lines in the national interest? We can think of no more important question, and in the months before the election we intend to provide a forum, on our letters and op-ed pages, to continue the discussion. Is today’s polarization part of a normal American cycle or is it a new phenomenon arising from new factors such as cable television, the Internet, geographic self-sorting, campaign finance reform or computer-assisted redistricting? Does it open a space for third parties or other forms of “radical centrism”? If so, would that be good or bad? We’d like to hear your views.

My first reaction when I read that Senator Specter was to become a Democrat was shock.  I hadn’t thought he’d take such a radical step.  Make no mistake, in America changing one’s party is a radical action.  I had thought that perhaps he’d become an Independent – a far easier step along the continuum of politics.  No, he had decided to make the full leap.

As I’ve had a day to think about it and to read the numerous stories and commentary in the Washington Post and the New York Times, it’s made more sense to me.  For readers who aren’t regular readers of this blog, I, like Senator Specter, sit in a place on the political spectrum that is hard to categorize–liberal on this issue, conservative on that, and, often, very centrist.  Yet I would have a lot of trouble becoming a Democrat.  I would have trouble for the same reasons I have trouble any longer calling myself a Republican.  Each party has wings and viewpoints with which I am in vehement disagreement.  For me, it is merely trading one set of issues with which I agree/disagree for another.  For Senator Specter, however, it would appear that in his calculation it was what will be necessary for political survival.

While I’d have preferred he become an Independent and run as an Independent in Pennsylvania in 2010, he obviously calculated that such a move would unlike result in his re-election.  Instead of one one party opposing him, he’d have two.  And since it seems our system is such that unless you’re either a Republican or a Democrat you don’t have much chance of being elected in America, one must chose one party or the other if one hopes to be elected to public office.

For the time being I don’t have that dilemma.  I can be an Independent.  Still, I would very much like to create a middle-of-the-spectrum party that would have a chance of seriously playing in the political game with the big two.  It would reform the big two like nothing else I can think of.

In a Washington Post editorial this morning entitled Aisle Crosser, there is a quote of Senator Lieberman, a rare elected Independent.  Here’s what he’s quoted as saying:  “You know, it’s good for the Democratic Party, bad for the Republican Party that Arlen Specter left them and joined the Democratic caucus.  But you know what? Overall, it’s not great for American politics, because both parties should have moderate or centrist wings in them that . . . [create] more opportunity for common ground and less partisanship.” 

I couldn’t agree more.  In an ideal world Arlen Specter could have remained a Republican and still been renominated by his party.  This isn’t an ideal world.  He would have been beaten by a conservative ideologue in the Republican primary.  Personally, I would like to remain a Republican and fight for a more moderate party.  However, I don’t see that happening in the next decade.  So Specter is going to seek his home as a Democrat and I will seek mine as an Independent.

My hope is, as unideal as this situation is, that Senator Specter can and will remain a voice of moderation and principal in his new party.  My hope is that he can try to pull Democrats to the right more successfully than he was able to pull Republicans left.  I actually think he’ll have better luck.  Smart Democrats realize that the secret of winning elections is drawing in the center.  Republicans are, as I indicated above, a decade of losing elections (hopefully) away from learning this lesson.  In the meantime we have to hope the Democrats don’t head full-tilt left and contribute to a Republican win before they’ve learned their lessons.  Then we’re all in real trouble.

In closing let me recommend another two pieces on this topic, this first from the New York Times.  It is by Senator Olympia Snowe and it’s entitled We Didn’t Have to Lose Arlen Specter.  Also well worth reading is this New York Times blog by David Brooks and Gail Collins entitled Specter, At Least for Now.


There is a wealth of good commentary (commentary that I generally agree with) in the Washington Post this morning.  I’ll write about it in three posts today, divided by subject matter.  The first subject I’ll address is the newly announced plan by the Obama administration to stabilize banks and relieve them of their “toxic” assets. 

Before I begin with the two “good” pieces, lets get the bad out of the way.  Yesterday in the New York Times, Dr. No, otherwise known as Paul Krugman, despaired that the rescue plan to be announced later in the day was disappointing, filling him with a “sense of despair.”   Poor boy.  He was also on the Lehrer Newshour last night as the posterboy for the nay sayers.  I don’t think Krugman is right here.  Let us all hope he isn’t.  His column yesterday is entitled Financial Policy Despair.

Let me make clear that like the Treasury plan.  I do not want to see the country’s biggest banks “liquidated” and thereby nationalized, something that Paul Krugman seems to crave.  If we can avoid it, the country will be healthier for it, assuming we put into place new regulatory mechanisms that protect against future extreme folly.  It is no wonder, therefore, that I liked the Washington Post editorial today (Mr. Geithner’s Plan ) and especially Steven Pearlstein’s Washington Post Business section column (Optimism Over Despair).  In his piece, Pearlstein directly addresses the Krugman critique.     

I’m not an expert here.  I am trusting in our leadership.  But, what they are proposing seems prudent and smart and balanced.  It appears to me that the plan can work in a positive way with its fundamental reliance on the market.  More market and less bureacrats is always a good thing in my book.  As long as you have regulators who can temper market excess and force consideration of externalities as needed, it will remain the best allocator of resources that humankind has discovered.  It simply can’t be replaced by federal bureaucrats.   Mr. Krugman may have more faith in bureaucrats than markets, but I don’t.  This plan is deserving of our support and it has mine.  Let’s hope it works.

This post continues what I began in my posting to this blog yesterday and concerns the public and political overreation to the AIG bonuses and the risk that this overreaction poses to our broader and much more important goal of getting the American economy out of the severe economic crisis that it’s clearly in.  Today, there are a number of editorials and columns that reinforce my view that we need to just calm down a little and not loose sight of our broader and more important goals.  The basic story of what I’m calling an overreaction can be found in these stories:  Congress Moves to Slap Heavy Tax on Bonuses (Washington Post); House Approves 90% Tax on Bonuses After Bailouts: Connecticut Senator Draws Voters’ Ire for Payout Role and A.I.G. and Wall St. Confront Upsurge of Populist Fury (New York Times).  In particular see In New Dilemma, Banks Cite Two Paths to Disaster.

I’m not going to say any more on this.  Today I’m turning the floor over to others, most of whom I’m in total agreement. 

Let’s begin with the Washington Post editorial this morning entitled Washington Gone Wild: Congress’s destructive reaction to the AIG bonuses.  It makes the basic case perfectly.

As for the columnists today, I recommend and agree with Charles Krauthammer’s Bonfire of the Trivialities(Washington Post),  Michael Gerson’s Commanding The Heights of Hypocrisy (Washington Post) Steven Pearlstein’s Let’s Put Down the Pitchforks (Washington Post) and David Brooks’ Perverse Cosmic Myopia.  If you can only read two, read the latter two.  The Post story (In New Dilemma, Banks Cite Two Paths to Disaster), the four columns and the Post editorial should be required reading for every American this morning, and particularly our political leadership.

Offering different perspectives are the columns Off With the Bankers (Simon Johnson and James Kwak in the New York Times) and Does Geithner Get It? (Eugene Robinson in the Washington Post).     

As I’ve thought about what’s going on here I have been tempted to resort to aphorism or adage.  The Merriam-Webster online dictionary defines aphorism as “a terse formulation of a truth or sentiment: adage.  There are a few that seem relevant to the present situation:

Throwing the baby out with the bathwater.

Cutting off your nose to spite your face.

Doing more harm that good.

Making a mountain out of a molehill.

I am certain that there are many more.  It is clear that in this fiasco we are treading very well worn ground.  I would suggest that we would be wise to take the counsel of this common wisdom, accepting it as a gift from the ages.  

I remain hopeful as well that in the United States Senate that saner heads will prevail.  As it was designed to do, let us hope that the United States Senate deals with this issue in a less rash, more prudent, and more deliberative way than did the U.S. House of Representatives yesterday.  It will be for the country’s good.       

A Washington Post Editorial this morning calls upon Illinois Senator Roland Burris to resign from the Senate.  The fact is, he should never have been seated by the Senate in the first place, at least not without a legal fight.  The Senate’s Democratic leadership should have followed their first and correct instincts that this appointment was tainted and could not be allowed to stand.  I know that some questioned the legality of the Senate refusing to seat a Senator otherwise lawfully appointed by a Governor.  My response would have been to let the courts decide as there was clearly an arguable, if not winable, case for refusing to seat Mr. Burris.  What intervened was liberal political correctness.  It didn’t appear right for an institution as white as the U.S. Senate to treat Mr. Burris so badly.  The optics were dismal.  Yet, it appears the instincts of Senate leadership were correct.  No matter how this turns out, the appointment and thus Mr. Burris will always be stained.  It would be best for Mr. Burris to resign and give Illinois a head start on cleaning up its act.       

I’ve worked in the energy policy arena for most of my career and consider myself an expert.  I’ve been able to see what works and what doesn’t.  I am convinced that in dealing with climate change what this country does not need, at least not without much more public scrutiny, is a massive and bloated “cap and trade” mechanism to control greenhouse gas emissions.  I am deeply concerned that the public will never understand it as it’s far too complex and requires far too much bureaucracy in order to work.  It is entirely too “command and control” for my liking.

In a refreshing editorial this morning in the Washington Post, the Post editorial staff calls on Barbara Boxer to make good on her pledge to ‘start afresh’ on climate change legislation by “giving a tax on carbon a fair hearing”.  I could not possibly agree more.  The piece is entitled Climate Change Solutions: Senator Boxer is open to everything — except what might work best.

The great appeal of cap and trade is its ability to set clear limits on greenhouse gas emissions.  A carbon tax will take much more trial and error and extrapolation of data in order to determine how effective its been in achieving carbon emission reduction targets but the tax itself will be relatively clear and transparent.  There would also be a bigger public sales job in convincing people they need to pay a tax on energy.  However, cap and trade, make no mistake, will end up raising energy prices as well and the public will never understand how it works or, I predict, trust it.

At the very least, the carbon tax needs to be publicly debated and cap and trade juggernaut slowed enough to allow this debate and a greater public debate about cap and trade and what the mechanism would require in terms of a managing bureaucracy.  The time to begin that process is now.  Bravo to the Post for making this a priority.  It is about time.  

I’ve been personally troubled for years by what seems to be the completely out-of-line salaries that executive America receives for its services.  My instincts tell me that something needs to be done, but the problem is, what?  This is a very complex issue and the easy solutions are likely to come with undesired consequences.  It is is good time to begin thinking about the issue, however, as it is especially relevant to the issue of Wall Street and banking sector bailouts.  President Obama expressed his outrage this week and suggested a remedy for certain institutions that receive government financial assistance in the future.   

I am not certain that what President Obama is proposing is a good one.  We need to think it out more.  Helping us think this entire issue out are three pieces from the Washington Post and New York Times today.  A good starting place is the editorial entitled Executive Payback that appeared in today’s Post.

As regular readers will know, I believe that a major problem is the U.S. today is that most people develop “opinions” with entirely too little information.  With so few now reading newspapers, it is little wonder.  Without information our opinions will be flawed.  The decisions we make as a consequence of the flawed opinions will be less sound than they might otherwise be with a sounder grounding in reality.

This brings me back to the Washington Post editorial this morning.  One of the reasons I’ve come to appreciate the Washington Post editorial board is that it appears most often to have done its homework.  Additionally, I appreciate that the board isn’t particularly ideological, as is the New York Times editorial board, for example.  At the Times there is also no attempt to be non-partisan.  I could say the same thing about an E. J. Dionne Op-ed piece.  And though I have disagreed with the Post editorial board, it is rare.  When I do it is usually because I feel they missed a key piece of information, usually in pieces regarding energy policy, my field of expertise. 

As concerns the Post editorial on executive pay, I think they have it about right.  I believe the entire issue needs more thought and attention, however.  We don’t want to do more harm than good with a knee jerk response.  Clearly Mr. Obama reflected the majority view that something is wrong but I believe that we’re not ready yet for solutions, even with respect to those receiving government bailouts.  

A helpful contribution this debate was offered today by Reed Hastings, the CEO of Neflix in an Op-ed in the New York Times.  It is entitled Please Raise My Taxes.  In addition to pointing out why President’s Obama’s solution this week wasn’t a good one, it offers a most interesting new idea.  I know that conservative and libertarians will be outraged by his idea, but it is something we need to talk about.  Clearly something needs to be done.

Another interesting piece, one with which I do not agree, is Harold Meyerson’s Capitalist Punishmentin today’s Washington Post.  What I like about the Meyerson piece is the statistics it contains on executive pay over the years. 

I’d welcome a dialog with readers on this topic.  Give the pieces a read and let me know what you think.

The news this morning doesn’t look as good as it did yesterday on the stimulus front:  It’s unclear whether Labor, and thus its supporters in the Senate, will approve of the watered down “Buy America” provision; apologists for the House bill are coming out of the woodwork to defend the original bill, apparently including the President; and the reformist momentum that seemed to be present on Tuesday has apparently stalled.  What does it mean?  It increases the chances that a highly flawed bill could be the one that’s voted upon by the Senate as early as today.  There’s still hope, however.

As concerns the “Buy America” provision you can read of yesterday’s developments in these two stories in the New York Times and Washington Post, respectively:  Senate Agrees to Dilute ‘Buy America’ Provisions and Stimulus Bill Gets Housing Tax Perk.  As I noted yesterday “Buy America” a terrible idea.  While I’d prefer no such provision, the added language, should help.  According to the above-referenced Times story, the words added to the provision are the following:  “applied in a manner consistent with United States obligations under international agreements.”  My concern here is that this will just open the door to questionable domestic interpretation of what is legal under international agreement and in turn to claims by other countries over that interpretation.  This is all to appease Labor.  Distasteful policy making.

As to the backlash against efforts to reform the House bill, there are two pieces worth noting.  The first is the President’s Op-ed in this morning’s Washington Post.  It’s entitled The Action Americans Need.  It’s disappointing.  It doesn’t say much and seems designed to comfort the interest groups on the left who don’t want to reform the House bill.  The President continues to work with Senate moderates, however, to find compromise.  This is good.  Today’s other apologist, who I sometimes suspect has an office in the Democratic National Committee Headquarters so partisan is he, is E. J. Dionne who spouts a lot of nonsense in his column in today’s Washington Post.  The piece is entitled Time to Play Hardball.  No, Mr. Dionne, it’s not.  Hardball won’t get additional Republican votes, which is what this bill needs.  It is also worth reminding ourselves that no compromise bill is going to get overwhelming Republican support.  It won’t because the majority of Republicans are too partisan or too ideologically conservative to be able to move to the center for the greater good.  But they don’t matter.  Those who matter are the relative centrists.  Get few or none of them and the bill has failed, even it it passes.  Get most, if not all, of them and it means the country has probably produced a better bill than the one that passed the House last week.  

Finally, as concerns the reformist efforts getting stalled, I note a fine editorial in the Washington Post this morning.  The Post editorial staff gets it.  The piece is entitled The Senate Balks: Why President Obama should heed calls for a more focused stimulus package.  Because I agree with it in toto, here’s the editorial in its entirety:    

Today in The Post, President Obama challenges critics of the $900 billion stimulus plan that was taking shape on Capitol Hill yesterday, accusing them of peddling “the same failed theories that helped lead us into this crisis” and warning that, without immediate action, “Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.” A thinly veiled reference to Senate Republicans, this is a departure from his previous emphasis on bipartisanship. Still, as a matter of policy, Mr. Obama is justified in signaling that the plan should not be tilted in favor of tax cuts — and that the GOP should not waste valuable time trying to achieve this.

However, ideology is not the only reason that senators — from both parties — are balking at the president’s plan. As it emerged from the House, it suffered from a confusion of objectives. Mr. Obama praised the package yesterday as “not merely a prescription for short-term spending” but a “strategy for long-term economic growth in areas like renewable energy and health care and education.” This is precisely the problem. As credible experts, including some Democrats, have pointed out, much of this “long-term” spending either won’t stimulate the economy now, is of questionable merit, or both. Even potentially meritorious items, such as $2.1 billion for Head Start, or billions more to computerize medical records, do not belong in legislation whose reason for being is to give U.S. economic growth a “jolt,” as Mr. Obama himself has put it. All other policy priorities should pass through the normal budget process, which involves hearings, debate and — crucially — competition with other programs.

Sen. Susan Collins of Maine is one of the moderate Republicans whose support the president must win if he is to garner the 60 Senate votes needed to pass a stimulus package. She and Democrat Ben Nelson of Nebraska are working on a plan that would carry a lower nominal price tag than the current bill — perhaps $200 billion lower — but which would focus on aid to states, “shovel-ready” infrastructure projects, food stamp increases and other items calculated to boost business and consumer spending quickly. On the revenue side, she would keep Mr. Obama’s priorities, including a $500-per-worker tax rebate.

To his credit, Mr. Obama continues to seek bipartisan input, and he met individually with Ms. Collins for a half hour yesterday afternoon. We hope he gives her ideas serious consideration.

Let’s hope the efforts of the Senate moderates continue today and a number of the bill’s unstimulative excesses are cut from it.  Then let’s hope it passes the Senate with a healthy majority.  This would be good news for the country.

Something interesting happened today.  I almost agreed with a New York Times editorial.  In it’s lead editorial this morning entitled The Travails of Tom Daschle, the New York Times called for Daschle to withdraw his nomination.  I’m a little conflicted on this myself.  On one hand, I deplore the big money Daschle pulled in after leaving the Senate and the fact that President Obama nominated him to his cabinet after spendingmonths on the campaign trail excorciating “lobbyists” and their ilk (Washington insiders) and promising  a new day in Washington.  On the other hand, there’s probably no one better suited to getting a health care plan through Congress than Daschle.  It’s the hypocrisy I can’t stand. 

And here comes is my strongest critique of President Obama to date:  It is appearing that he knowingly lied to the American people in the campaign.  Sure, he would say, everyone does it–it’s just politics.  But you Mr. Obama promised to be different and it turns out you’re not.  You said what you needed to say to get elected and then you turned around and did something else.  You can’t have it both ways.  Either you realize that lobbyists play a role in the Washington policy making or you deplore that role and keep them out of your administration (as you promised to do).  Yet with both Daschle and William Lynn at the Department of Defense, you broke your promise to the American people.  So, either it was just campaign talk (you lied to us) or you broke a sincere promise when you realized it was unreasonable that you were going to get anything done as President without any insiders. 

This brings us to the reality at hand.  Should Lynn and Daschle be confirmed to the posts for which they’ve been nominated?  As I don’t know enough of the particulars, although it looks very bad, I won’t pass judgement on Lynn.  As for Daschle I deplore the system he bought into the day he left the Senate.  Here’s an excerpt from the New York Times editorial:

Mr. Daschle’s financial ties to major players in the health care industry may prove to be even more troublesome as health reform efforts proceed. Like many former power players in Washington, Mr. Daschle cashed in on his political savvy and influence to earn $5 million in recent years, including more than $2 million from Alston & Bird, a law and lobbying firm; more than $2 million from the private equity firm, InterMedia Advisors, which provided the car and driver; and hundreds of thousands of dollars for speeches to interest groups, including those representing health insurance plans, medical equipment distributors and pharmacy boards.

Although Mr. Daschle was not a registered lobbyist, he offered policy advice to the UnitedHealth Group, a huge insurance conglomerate. He was also a trustee of the Mayo Clinic in Minnesota, on whose behalf he voiced opposition to a federal loan for a freight rail line near the clinic’s headquarters in Rochester, Minn. The loan was subsequently denied by the Federal Railroad Administration.

I don’t care about Daschle’s not knowing that a car and driver were taxable income.  (I frankly care more for what accepting a car and driver says about the character of the simple boy from South Dakota.)  But I do care that we know that Tom Daschle will be more than happy to cash in again, when he leaves the post to which he’s been nominated, and will profit off of the decisions he makes while secretary of health and human services.  Knowing what he knows and who’s he’s represented in the past, I can’t imagine that it won’t influence his choices as secretary. 

I have a friend who could have become a lobbyist by virtue of his Hill experience and made really big bucks.  He deplored the idea and instead has worked since for either government or non-profits, earning, I believe, a very healthy salary.  But make no mistake, it was millions of dollars less than he could be making–millions!  I respect that deeply.  Daschle had no such qualms.  It is what most ex-members of Congress do and every current member of Congress knows it.  Consequently they afford special attention and consideration to the views of their now private sector friends knowing that that will be them some day and for the system to work they must “contribute” while still a member.  While most members of Congress would deny it, it has to make a difference.  I also want to be clear that some members, like the friend I noted above, eschew such a post-Congress career.  Most don’t, however, and they go on to earn the really big bucks as lobbyists or better yet, like Daschle, they “lobby” without lobbying.  It’s disgusting.  Confirming Daschle would condone the practice. 

Yet, there’s probably no one Obama could nominate who would be more capable of pulling off the very tough task of negotiating a new health care regime in America.  That’s my quandary.  I think I would probably vote “No” on confirming Mr. Daschle, but I’m not sure.  As I’m willing to forgive President Obama for backing away on a campaign pledge (because Obama is clearly spectacularly gifted and we, the country, need desperately for him to succeed as president), I might likewise be willing to vote to confirm Mr. Daschle for similar reasons.  The country needs to solve its health care mess and Daschle may be the person uniquely qualified to do it.

We need to clean up the system, however.  For another perspective on the Daschle the story and what it tells us about the sorry state of “the system”, see the column entitled Taxes? Too Busy, Busy, Busy by Emily Toffe in today’s Washington Post.  It’s excellent.  As well, see the New York Times story entitled Obama’s Promise Of Ethics Reform Faces Early Test.

The ethical reforms that President Obama has announced with respect to those entering his administration are impressive.  I encourage Congress, as well, to toughen their standards.  I’d like to see no more Daschles leaving the Senate to earn $5 million per year trading off of their Senate connections.  It’s time to close that door and it’s what should be.         

The U.S. is a better place this weekend than it was last with Rod Blagojevich no longer the Governor of Illinois.  Illinois has long had a deserved reputation for dirty politics and this is an opportunity for the state to clean things up once and for all.  A friend once worked for the state and the stories he’d tell of how jobs in state government were filled was truly frightening.  Competence or qualifications for a job were secondary to political party and how much you’d raised, even as a state employee, for the winning candidate.  It’s no one wonder almost every Governor of Illinois ends up in prison.

Further, the former Governor’s missteps in trying to “sell” Barack Obama’s Senate seat were but the most flagrant of his myriad of transgressions.   It has raised the issue, however, of how the U.S. goes about replacing Senators when they die or resign to do other things.  None of the experiences this year with Governors replacing Senators have been tidy, although none sink to the sordid depths of Illinois.  This week Senator Russell Feingold along with Senators John McCain and Mark Begich introduced a constitutional amendment that would require special elections for Senate vacancies.  (Information courtesy of CongressDaily 11:30 EXTRA yesterday).  It’s a great idea although it will be a tough row to hoe in getting the majorities required in both Houses, not to mention the requisite assent of states.  It needs to be pursued, however.  I’ll leave it to this Washington Post Editorial, entitled How Not to Pick a Senator which appeared on January 24, to make the case for special elections to fill Senate vacancies.  I agree with it completely.

As concerns the U.S. economy, the news continues to get worse.  We’ve driven off a cliff and it’s appearing that it will be a mighty challenge to get back to anything approaching normal soon.  It could be the rest of my working life, now unfortunately itself prolonged as a result of the depreciation in my life savings.  Having said that, there was blurb in yesterday’s New York Times business section entitled “A History Lesson” (which can be found in a larger story entitled Bank of America Needs a Nudge) that offered a little hopeful news to balance the doom and gloom.  I recommend giving it a read.  It points out that this isn’t likely to be the Great Depression.  I know I felt a little better after reading it.

Finally this week, I’d like to briefly address an issue that has the potential to get very heated in the months ahead.  It is the issue of labor unions and their role in our economy.  Our new administration will be much more friendly to labor as the Democratic Party owes labor a large political debt.  Paying off that debt may be very costly to the country and the economy.  Let’s begin with the news that unions at a number of petroleum refineries around the country are threatening to strike.  This news could mean shortages, at least regionally, of petroleum products like gasoline.  The issues include safety and wages.  While I understand safety, I cannot see the entire country being held hostage over the wages of employees of refineries.  If they don’t like their wages, I suggest they build their skill set and seek better paying jobs.  Right now there are surely many that could and would take their place for the salaries they currently receive.  That is the essence of the market.  Jobs that are in economic demand in relation to the supply of workers able to do those jobs get higher wages than those jobs where workers are a dime a dozen.  This apparently includes corporate CEOs who operate in a rarefied, and in my opinion perverse, market that I neither understand nor condone.  Unions, however, are able to interfere with that market by threatening significant economic loss (through a strike action) to the employer and potentially to the entire economy (in the case of petroleum refinery workers) if their demands for higher wages are not met, notwithstanding the fact that there are others who’d only be too willing to work for those same wages.  The market therefore gets skewed.  Wages end up being higher than the market tells us they should be and that impact ripples through the economy.  Eventually, things get so out of line that market prevails, as it has in the case of Detroit of late.  The wages and benefits extracted by labor over years of collective bargaining break the bank and it all comes tumbling down. 

So, immediately, with this potential of an economy-jolting refinery strike, the administration may be presented with a dilemma that is not unlike the one that hit President Reagan in his early days in the White House with air traffic controllers.  Then, Reagan told the air traffic controller’s union to take a hike.  This President will be unlikely to tell the refiners’ union to do the same and he will likely fail an important leadership test.  We’ll have to see.

Another leadership test will be in how the President handles union demands for enactment of the Employee Free Choice Act.  He’d like to put this bill off for as long as possible into his administration although Vice President Biden this week suggested that it would still be brought up for Congressional action within the year.  Expect a knock-down drag-out fight of huge proportions on this one.  Especially in a major recession, this is one I don’t see labor winning and if they do, it will be at great political loss for Democrats, as this will not sell well in most of America.  Already corporate America is circling the wagons and it will get nasty.  A good story explaining this looming battle can be found in a January 9 New York Times piece entitled Bill Easing Unionizing is Under Heavy Attack.  You can guess that I will be no fan of this legislation and will side strongly with corporate America.  This bill must be defeated, especially now. 

And that’s it for this week.  For the record, I’m not sure that the Weekly Roundup is a sustainable feature of this weblog.  Writing a column every day of the week takes an inordinate amount of time and energy and by the weekend I need a mental break, if nothing else.  I always say to myself that I’m going to do a short one that won’t take more than an hour and then I conclude the piece at least two hours later.  We’ll have to see, but his could be the last.  All the best. 

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