Monday, December 14, 2009

Democrats return to job-killing tradition

Paul Moreno on Democratic traditions regarding labor.
The nation's unemployment rate is 10 percent, and the Democratic Party effectively is doing all it can to keep it at that rate or raise it. Its health care and labor relations agenda are almost guaranteed to do this. In this, President Barack Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi are honoring the two-century tradition of the party.


After the Civil War, the Republicans managed the greatest job-creating country in world history. Between the Civil War and World War I, the United States became the strongest economy in the world. America absorbed about 60 million immigrants in these years, and inflation-adjusted wages still rose for everyone. It did this with almost no federal regulation, and no federal income tax. Government at all levels consumed about 5 percent of the national income in 1900, compared with about 40 percent today.

All Democrats, particularly those of a Populist and Progressive orientation, did was complain. What they advocated -- more taxes, more regulation -- sought to punish the job-makers. Federal regulation gradually drove the country's largest employer, the railroads, to ruin. The income tax was the prime example. It shifted the tax burden from consumers (primarily the tariff) onto producers.
I am not convinced of Moreno's premise that labor unions are job killers in an of themselves. I do agree that they certainly increase costs and generate obstacles to growth, but I am not sure they are job killers in the same way that taxes and regulations are. To be sure, unions have done some very good things in America in the past, but I am not sure they are absolutely necessary now. Given that union membership is growing only among government employees, I think unions are driving part of the problem with government expenditures.

I think that more and more private sector unions are starting to understand that they have to work as partners with corporate management instead of being simply an adversary. Working with corporate management means better job protection than contracting for absurd requirements.

Still, I think Moreno is right about the Democratic tradition of job killing policies. I don't see anyway in which the Democrats are going to create jobs with their current policy prescriptions.

No comments: