Obama’s union error

March 2, 2010

The great Ed Yardeni thinks the POTUS is repeating FDR’s mistakes:

In 2016, I expect that Mr. Geithner will make the following speech: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job … We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … and an enormous debt to boot.”

Those words were actually spoken by FDR’s Treasury Secretary Henry Morgenthau before his fellow Democrats on the House Ways and Means Committee. Revisionist conservative-leaning historians are increasingly blaming FDR’s policies for prolonging and deepening the Great Depression. A recent addition to this perspective is “The Forgotten Man: A New History of the Great Depression” (2007) by Amity Shlaes. She followed it up with an interesting article in the WSJ on Feb. 1 this year, “How to Make a Weak Economy Worse.” She observed that FDR’s anti-business policies were bad for business. She notes, “The 1935 Wagner Act was a tiger that makes today’s union law look like a pussycat. It favored unions over companies in nearly every way, including institutionalizing the closed shop. And after Roosevelt’s landslide victory in 1936, the closed shop and the sit-down strike stole thousands of productive workdays from companies, punishing earnings and limiting ability to hire.”

In yesterday’s WSJ, we learned that the Obama administration is considering union-backed proposals to make it easier for government agencies to bypass low bidders and award contracts to higher bidders that pay more wages and benefits. The AFL-CIO labor federation is pushing for a jobs program called “Jobs Now Make Wall Street Pay.” They want a transaction tax on securities trading to pay for yet another infrastructure spending program.


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kindly note that the unions drove the formation of a prosperous middle class. Yes, they were overpaid and catered to and didn’t adjust with the times. But demonizing them should also be demonizing the owners of the companies who let them through. You don’t get a strong middle class with just the owners of companies making billions.


Posted by Bob | Report as abusive

I work in the securities industry in Canada and I would be delighted, ecstatic even, if Mr. Obama was foolish enough to tax securities trades to pay for infrastructure work. All the business that would flow north to Canadian banks and dealers looking for a friendlier business climate is too great to imagine. Sure, Wall Street would become a ghost town but hey! all those greedy traders would be on the dole. All of us Canadians working on Bay Street would be more than happy to take up the slack. Don’t forget, our Prime minister, Mr. Harper, has already nixed the idea of a transaction tax in Canada so the way is clear for all the US banks and brokers to move to Olympic country!

P.S. Screw the unions

Posted by gotthardbahn | Report as abusive

When you say “Revisionist conservative-leaning historians are increasingly blaming FDR’s policies…” I’m not sure if you mean the conservative-leaning economists are incorrectly re-writing accepted truth or correctly debunking popular misunderstanding. It is the latter. WW II ended the Great Depression. Unless you want to describe WW II as an “FDR Policy” …. well, you know.
[For a light hearted take our present peril]

Posted by LibertyAtStake | Report as abusive

Revisionist economic historians are anti-labor, just as Holocaust revisionists are anti-you-know-what. Cite them with caution.

Oh, and if you don’t like labor guilds, unions and what they stand for, Jim, namely equal rights, safe workplace environments and decent conditions for working people, which is the antithesis of what we have now, don’t beat about the Bush – just come right out and say so.

Posted by The Bell | Report as abusive