Inequality And Education

We need to change the way we pay for public education. There is a direct relationship between education and inequality. In the past education was less of a necessity. Here in the Midwest you could work in an auto plant without graduating from high school and earn a solid middle class living with health insurance and a pension. Things have changed.

Today you not only need a high school diploma but some additional technical training to qualify for that same line job. Further, we are all competing in a global economy and as a result the domestic auto industry can no longer go along with raising the wages of union members and pass that increased cost onto the consumer. The consumer will go elsewhere. Continue reading

Think Long-Term

David Brooks of the New York Times advocated that Democrats implement what Obama ran on during the 2008 campaign – change and thinking long term.

America is concerned that we are in decline. It is less that we are in decline and more that the rest of thee world has caught up. At the end of World War II, we were the last country standing. As everyone else was cleaning up the ruble, we were moving ahead. If we are to compete in this new world, we must think long-term; both as a nation and as individuals.

Government can assist in this planning and implantation process and government must do everything it can to unleash American ingenuity. We must free our free markets. Virtually everyone who claims to be conservative says he is pro-capitalism and for free markets. Most state free markets are stifled because of over regulation. I agree, we should prudently curtail over regulation that causes inefficiencies. However, government regulation needs to better protect are basic freedom; including our right to access free markets.

Free markets are destroyed by not only government, but also by bad players in the market who create either monopolies or oligopolies. These entities destroy capitalism. Adam Smith defined capitalism as a situation where there are many producers, corporations, who are pursuing their rational self-interest while many consumers, citizens, are simultaneously pursuing their rational self-interest. In this manner, it is in the self-interest of the producers to provide the goods and services demanded by the consumers at the best price and quality possible. If they do not, the consumer will go elsewhere and the producer will lose profits and potentially go out of business.

Milton Friedman, the conservative economist, says in his book Free To Choose that governments role in a free market system is to be the umpire and rule enforcer in order to assure that economic markets are indeed free. No one in their right mind would envision playing a NFL football game without rules and umpires. Yet, in some of our industries this is exactly what has happened. Entities have formed oligopolies and the rational self-interest of the oligopoly is to keep it alive and make it even stronger. When this happens, goods and services are not produced to meet the demands of the consumer at the lowest price and highest quality possible. Instead, shareholders and senior management are rewarded for forming the oligopoly. The reward comes from higher share prices and excessive costs, including egregious salaries paid to senior executives, passed on to the consumer.

The oligopolies accomplish their selfish objectives by bribing the umpires, our representatives, with campaign contributions. It is a mystery why unions and corporations can buy votes with campaign contributions; even though they cannot actually vote. This must change and a good start is to visit the following web site.

The government has failed to protect our basic right of freedom; access to free markets. Until we correct this, we will not get back to our potential. This should be part of the long-term plan.

Help us to be FREE TO CHOOSE!

The U.A.W. Can Help!

This is a response to a recent opinion posted in the New York Times about the U.A.W.

If the U.A.W. truly wants to help the middle class of this country they will join, perhaps even lead, in the battle to free our economic markets from the oligopolies that have been created and taken control of so many of our industries including auto, airlines, healthcare, financial services and others.

There is truth in your comments; however, the middle class was affected by other developments as well. First, A significant reason for the growth in the middle class beginning in the ‘50’s of the last century was the fact that this country was the last one standing after World War 11. The rest of the world was destroyed. There was no global competition and as a result this country grew and prospered.

Second, the U.A.W. played a major role in the creation of the first oligopoly after the war. This led to the destruction of many of our free markets, which is the engine of our economic growth, including prosperity for the middle class. In the 1950’s Ford, Chrysler, General Motors and the U.A.W. sowed the seeds to transform the auto industry from a free market industry to one controlled by these entities, rather than the free market. Yes, the U.A.W. was part of this newly formed oligopoly.

This oligopoly freely raised the wages paid to the U.A.W. members because the auto companies had little concern about the increase in the cost of building a car. They knew that the other members of this oligopoly would raise the price of the cars they built and thus everyone in the oligopoly would be able to pass on the added cost of labor to the consumer.

The U.A.W. protected its members from these rising prices; however, the remainder of the consumers bore the brunt of higher labor cost of building a car by paying a higher price for their automobile.

The corporations and the union that formed this oligopoly eventually got lazy and ignored the competition from outside this country that was growing. These foreign countries were able to produce an automobile cheaper and eventually even better than the lazy domestic auto companies were. The rest is history. Our American auto industry was destroyed and needed government intervention to survive.

In today’s world, the Board Members of these oligopolistic companies have little incentive to hold down the egregious salaries paid senior management because they know these extra costs can be passed on to the consuming public.

I applaud Bob King for saying “…… our own membership and forgot that the only way, ultimately, that we protect our members and workers in general is by fighting for justice for everybody.” My Dad was a U.A.W. member for over 35-years and his membership provided the ability for me to get a good start on life. However, I hope Mr. King’s focus is to encourage free markets in our major industries. Free markets, with much competition, create an environment where the companies in each industry focus on providing the best products at the lowest prices possible to the consumer. It is in their self-interest to do this because if they do not, they will no longer exist.

The U.A.W. needs to join the fight for free markets. Many people, especially republicans, believe that a free market is created when government does not get involved. In fact, free markets need government to keep markets free. A free market is destroyed when one entity, or a small group of large entities, are able to force their will on the market. It is a major role of government to be the rule maker and referee to assure that our markets indeed are free. The government must be the umpire to make sure everyone is playing by the rules of the free market. The government must be ready to enforce anti-trust laws when a company is not playing by the rules of the free market.

Let’s have the U.A.W. be a leader in restoring free markets. Let’s have the U.A.W. lead in reforming our campaign laws and prevent corporations, and unions, from buying votes of “our representatives. Mr. King, do you have the gonads to do this? This needs to be change so that our representatives stop representing these oligopolies.