Boeing was recently issued a complaint by the National Labor Relations Board (“NLRB”) that alleges Boeing unlawfully transferred jobs to a non-union facility.
PERISH THE THOUGHT!!!
The NLRB is a “quasi-judicial” federal agency whose board members are appointed by the President. At present, the four acting board members, and one yet-to-be-confirmed board member have all been appointed by President Obama.
Despite the sputtering economy, Boeing has managed to secure orders from airlines around the world for hundreds of their new 787 Dreamliner aircraft. Great news for Boeing, but they have a problem. Its current 787 plant in Washington can only produce 7 of the 10 planes it needs to deliver every month to fill its outstanding orders on schedule. As a result, Boeing determined it needed to build a new plant (and create thousands of new jobs) to manufacture the 3 additional planes per month needed to fulfill the orders.
When Boeing decided to build that new plant in South Carolina instead of its home state of Washington, the International Association of Machinists and Aerospace Workers union threw a temper tantrum and whined to its friends at the NLRB. South Carolina happens to be a right-to-work state, and apparently unions don’t like the idea of expanding businesses into right-to-work states. That’s right, expanding, not moving. The union employees in Washington will be unaffected – not a single job will be moved from Washington to South Carolina, yet this is still somehow unacceptable to the unaffected union.
Right-to-work means that employees cannot be FORCED to join a union; it doesn’t mean there can’t be a union. Interestingly enough, when employees aren’t forced to join the union, they usually don’t. The wholly-Obama-appointed NLRB knows exactly where their bread is buttered and quickly formalized the union temper tantrum with an official complaint alleging that Boeing’s business decision to set up shop in South Carolina was unlawful and the new plant must be built in Washington. All this, AFTER Boeing built the facility in South Carolina.
It doesn’t take an aeronautical scientist to see why Boeing would choose South Carolina as the site of its new plant. While the weather in South Carolina is infinitely better than Washington and the southern drawls that will be heard throughout the factory will be charming, Boeing ultimately believes it can produce the same quality product more efficiently, and cheaper, than it could in Washington. Basic Business For Dummies tells us that the primary advantage of a South Carolina plant is that its employees cannot be forced to join a union, thereby eliminating the prohibitively expensive and restrictive union employment and benefit contracts, and perhaps more importantly, eliminating the constant threat of crippling union strikes (averaging one every three years in Washington) that would derail the already tight delivery deadlines, and ruin their relationships with the airlines.
Anyone with even the slightest hint of business acumen would advise Boeing to locate the plant in South Carolina, yet a governmental agency is trying to strong arm, or potentially even force, one of America’s largest manufacturers into a sub-optimal business decision to appease a special interest group.
Do we really believe this is something that should be allowed to happen in the United States? Maybe Greece, but the United States?
With all due respect to Matt Taibbi at Rolling Stone, the” great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” could just as easily refer to the union bosses and their politician puppets, not just Goldman Sachs. I’m happy to be challenged on this, but can anyone name a heavily unionized industry that the unions haven’t parasitized into bankruptcy and/or models of inefficiency and ineptitude? Autos, airlines, US Postal Service, Public Education, Healthcare, Utilities, Public Transportation…I could go on and on.
How can we allow four bureaucrats in Washington DC to exert this level of influence over a private company making the most basic of business decisions?
We can’t.
I’m glad Boeing, Congress and Governor Haley of South Carolina are all standing up to the unions, the NLRB and President Obama. Our businesses, not to mention our unemployed, can’t afford to be strong-armed into non-competitive cost structures by unions and their bought-and-paid-for friends in Congress and the White House. Anti-capitalist policies like this are a sure fire way to promote off-shoring of manufacturing facilities by American companies, while at the same time scaring away foreign companies looking to invest in the US.
Way to go NLRB.
Monday, May 16, 2011
Friday, April 15, 2011
To Tax, or Not To Tax, That Is Not The Question
This is for everyone, including President Obama, stomping around like my two-year-old daughter whining about how we need to raise taxes on the “rich.” I can hear her now…”DA-DA! Higher Taxes! DA-DA, DA-DA! Higher Taxes, DA-DAAAAAAAAAAA HIGHER TAXXXXXXESSSSSSS!!!”
It equally applies to those acting like my four-year-old son stomping around and repeating, “Daddy, I don’t want higher taxes! Daddy, I don’t want higher taxes! DADDY…I SAAAAAID… I DON’T WANT HIGHER TAXES!!! I DON’T WANT HIGHERRRRRRRRRRRR TAXESSSSSSSSSSSSSSS!!!”
Can actual "millionaires and billionaires" like Jamie Dimon and Warren Buffet afford to pay higher taxes? Sure. Will these tax increases help reduce the deficit? Yes, but in the same way that chugging eleven Bud Light’s will make you less drunk than polishing off the entire twelve-pack.
The 2010 deficit (i.e. the amount by which spending was greater than revenue) was $1.3 trillion dollars in cash terms. Said another way, in the time it took you to read that last sentence, the government spent $349,000, but only earned, from all sources, $211,000. The total income tax revenue (not including social security and Medicaid payroll taxes) was $902 billion. Therefore, even if we doubled everyone’s income taxes, we’d still be left with a $400 billion annual deficit.
In 2008 (the last year from which I could find this information, and a year in which the US Government took in $130 billion more in income taxes than in 2010) the top 5% of taxpayers paid $605 billion in taxes (59% of all tax revenues). The top 5% represented everyone with adjusted gross income of at least $159,619, and their effective tax rate was 21%. So even if President Obama were to lower his definition of “rich” to those making at least $159,000 (a huge U-turn that would be a major problem in 2012), he’d need to more than triple all of their taxes, to an effective rate of 67%, in order to balance the budget.
This analysis assumes constant income levels at the higher tax rates, which, of course, would never happen. Incomes would plunge if rates increased significantly, making the problem much, much worse. Even a plan as dramatic as a five percentage point increase in the effective tax rate for the top 5% (i.e. from 21% to 26%) would only generate $146 billion in additional revenue, which is enough to run the government for all of 14 days.
This proves just how much populist rhetoric was in play during the President’s recent budget speech in which he repeatedly mentioned “millionaires and billionaires.” To paraphrase the President speech – “we’ve got a major budget problem, but 98% of you don’t need to worry about it because we’ll just hit up the richest 2% for more revenue. Oh, and by the way, we’ll have our policy wonks look into our suffocating entitlements and defense budget to see if we can magically save money without any substantive reforms.”
Yet another example of our politicians prioritizing re-election and saying what the people want to hear at the expense of serious leadership. The government has a spending problem, not a revenue problem. Any budget proposal that does not aggressively address the costs of Medicare, Medicaid, Social Security and Defense (together 63% of the budget, and growing fast) is not serious.
We need courageous politicians to action serious and realistic budgets aimed at getting the deficit under control. However, we also need voters to accept the uncomfortable consequences of a serious budget, knowing that if we continue to kick the can down the road, we face a certain and spectacular collapse.
Paul Ryan and the Republicans showed a modest amount of courage in their proposal - the President kicked the can…again.
It equally applies to those acting like my four-year-old son stomping around and repeating, “Daddy, I don’t want higher taxes! Daddy, I don’t want higher taxes! DADDY…I SAAAAAID… I DON’T WANT HIGHER TAXES!!! I DON’T WANT HIGHERRRRRRRRRRRR TAXESSSSSSSSSSSSSSS!!!”
Can actual "millionaires and billionaires" like Jamie Dimon and Warren Buffet afford to pay higher taxes? Sure. Will these tax increases help reduce the deficit? Yes, but in the same way that chugging eleven Bud Light’s will make you less drunk than polishing off the entire twelve-pack.
The 2010 deficit (i.e. the amount by which spending was greater than revenue) was $1.3 trillion dollars in cash terms. Said another way, in the time it took you to read that last sentence, the government spent $349,000, but only earned, from all sources, $211,000. The total income tax revenue (not including social security and Medicaid payroll taxes) was $902 billion. Therefore, even if we doubled everyone’s income taxes, we’d still be left with a $400 billion annual deficit.
In 2008 (the last year from which I could find this information, and a year in which the US Government took in $130 billion more in income taxes than in 2010) the top 5% of taxpayers paid $605 billion in taxes (59% of all tax revenues). The top 5% represented everyone with adjusted gross income of at least $159,619, and their effective tax rate was 21%. So even if President Obama were to lower his definition of “rich” to those making at least $159,000 (a huge U-turn that would be a major problem in 2012), he’d need to more than triple all of their taxes, to an effective rate of 67%, in order to balance the budget.
This analysis assumes constant income levels at the higher tax rates, which, of course, would never happen. Incomes would plunge if rates increased significantly, making the problem much, much worse. Even a plan as dramatic as a five percentage point increase in the effective tax rate for the top 5% (i.e. from 21% to 26%) would only generate $146 billion in additional revenue, which is enough to run the government for all of 14 days.
This proves just how much populist rhetoric was in play during the President’s recent budget speech in which he repeatedly mentioned “millionaires and billionaires.” To paraphrase the President speech – “we’ve got a major budget problem, but 98% of you don’t need to worry about it because we’ll just hit up the richest 2% for more revenue. Oh, and by the way, we’ll have our policy wonks look into our suffocating entitlements and defense budget to see if we can magically save money without any substantive reforms.”
Yet another example of our politicians prioritizing re-election and saying what the people want to hear at the expense of serious leadership. The government has a spending problem, not a revenue problem. Any budget proposal that does not aggressively address the costs of Medicare, Medicaid, Social Security and Defense (together 63% of the budget, and growing fast) is not serious.
We need courageous politicians to action serious and realistic budgets aimed at getting the deficit under control. However, we also need voters to accept the uncomfortable consequences of a serious budget, knowing that if we continue to kick the can down the road, we face a certain and spectacular collapse.
Paul Ryan and the Republicans showed a modest amount of courage in their proposal - the President kicked the can…again.
Friday, April 8, 2011
Nothing Short of Pure Evil Genius
Wow. The Democrats political posturing during the last 12 hours of the budget/government shutdown debate is nothing short of pure evil genius.
After dragging their feet for over a year, most of that time with the votes required to pass whatever budget they wanted, the Democrats are all of a sudden extremely worried about passing the 2011 budget – and by 2011, I mean the 5 months that remain in governments fiscal 2011. It reminds me of when I dilly-dally in the mornings with three or four smashes of the snooze button, or perhaps a little too much Wow Wow Wubbzy with the kids, and end up arriving at the train station just in time to watch my train steam off into the distance without me. I always end up blaming that pesky school bus for actually stopping to pick up the children or that one light that I just missed because the elderly driver ahead of me has the gall to drive her 1982 Cadillac the speed limit and actually come to a complete stop at stop signs. The bus and the elderly driver are annoying, but they are not the primary reasons I missed my train – I should have left the house 5 minutes earlier…
The Republicans and their proposed budget cuts are the Democrats’ school bus and elderly driver – a convenient excuse to mask their procrastination and ineptitude.
The evil genius comes from injecting the “women’s health” issues (i.e. abortion) into the budget/spending debate. If a government shutdown occurs and the Democrats can convincingly claim that the Republicans put 800,000 government workers and their families out of work because they want to cut funding for “women’s health” (whether true or not), the Democrats will come out of this shutdown smelling of roses and in a great position leading into the 2012 elections. Genius – pure, evil genius.
As for the Republicans, we have no idea how accurate Senate Majority Leader Reid’s statements are regarding the “women’s health” issues, but if they are even marginally true, and do in fact cause a government shutdown, the Republicans will have squandered a huge opportunity to kick start the spending cuts and will all but stop the positive momentum generated by their surprisingly well received 2012 budget proposal.
I think the Democrats have successfully called the Republicans bluff, and if the Republicans are smart, they will fold the current hand, take their profits so far ($40B in spending cuts that have been agreed), and save their chips for the next big hand (the 2012 budget).
After dragging their feet for over a year, most of that time with the votes required to pass whatever budget they wanted, the Democrats are all of a sudden extremely worried about passing the 2011 budget – and by 2011, I mean the 5 months that remain in governments fiscal 2011. It reminds me of when I dilly-dally in the mornings with three or four smashes of the snooze button, or perhaps a little too much Wow Wow Wubbzy with the kids, and end up arriving at the train station just in time to watch my train steam off into the distance without me. I always end up blaming that pesky school bus for actually stopping to pick up the children or that one light that I just missed because the elderly driver ahead of me has the gall to drive her 1982 Cadillac the speed limit and actually come to a complete stop at stop signs. The bus and the elderly driver are annoying, but they are not the primary reasons I missed my train – I should have left the house 5 minutes earlier…
The Republicans and their proposed budget cuts are the Democrats’ school bus and elderly driver – a convenient excuse to mask their procrastination and ineptitude.
The evil genius comes from injecting the “women’s health” issues (i.e. abortion) into the budget/spending debate. If a government shutdown occurs and the Democrats can convincingly claim that the Republicans put 800,000 government workers and their families out of work because they want to cut funding for “women’s health” (whether true or not), the Democrats will come out of this shutdown smelling of roses and in a great position leading into the 2012 elections. Genius – pure, evil genius.
As for the Republicans, we have no idea how accurate Senate Majority Leader Reid’s statements are regarding the “women’s health” issues, but if they are even marginally true, and do in fact cause a government shutdown, the Republicans will have squandered a huge opportunity to kick start the spending cuts and will all but stop the positive momentum generated by their surprisingly well received 2012 budget proposal.
I think the Democrats have successfully called the Republicans bluff, and if the Republicans are smart, they will fold the current hand, take their profits so far ($40B in spending cuts that have been agreed), and save their chips for the next big hand (the 2012 budget).
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