Sunday, December 2, 2012

Bipolar Views Continue at Business Insider

Business Insider Deputy Editor Joe Weisenthal is all over the place with his views on gold.

Now, Business Insider founder Henry Blodget joins him in a bipolar writing. First, Blodget is aggressively anti-union in his view:
I've always hated the idea of labor unions.

Why? 
Several reasons. 
They create an "us versus them" culture within companies, instead of putting everyone on the same team. 
They create a culture of entitlement 
They restrict flexibility and hurt competitiveness
They drive companies to move jobs out of the country, to places where there are no unions
They often become career employment for their leaders, who pay themselves well (much better than the workers they're representing)
They maintain ludicrous compensation and benefit levels for jobs based purely on seniority (some bartenders in one of the New York hotel unions, for example, apparently make ~$200,000 a year)
They force companies to treat all union employees equally, regardless of the relative skill and value of particular employees--thus reducing incentives for people to do a great job 
Etc. 
And all those are indeed negatives.
Then he totally flips and writes:

But we've now developed a bigger problem in this country. 
Namely, we've developed inequality so extreme that it is worse than any time since the late 1920s.
Contributing to this inequality is a new religion of shareholder value that has come to be defined only by "today's stock price" and not by many other less-visible attributes that build long-term economic value.
First, there is no equality in this world. Just ask the bug I just crushed. If Blodget is really for equality and since we are both in the same business, I think I will call him up in the morning and tell him where to send the check for half the millions in venture capital he has raised, so that we will both be "equal."

Second, the inequality that he references is caused by government regulations which make competition from upstarts in most industries difficult if not impossible. The crony capitalists, using government power, have built a boat around their businesses. Thus, the easy solution is to eliminate the suffocating regulations, not create more regulation that favors unions, which will result in nothing but bottlenecks in the labor sector to go along with crony capitalist bottlenecks because, um, let me think, oh yeah, unions:

create an "us versus them" culture within companies, instead of putting everyone on the same team.

They create a culture of entitlement

They restrict flexibility and hurt competitiveness

They drive companies to move jobs out of the country, to places where there are no unions

They often become career employment for their leaders, who pay themselves well (much better than the workers they're representing)

They maintain ludicrous compensation and benefit levels for jobs based purely on seniority (some bartenders in one of the New York hotel unions, for example, apparently make ~$200,000 a year)

They force companies to treat all union employees equally, regardless of the relative skill and value of particular employees--thus reducing incentives for people to do a great job.

(ht Markie Oles)

2 comments:

  1. Yes, Unions cause all of the problems you've cited.

    I'm not sure if 5 new fast food chains suddenly appeared, fairly quickly, if the average wage in that sector would go up.

    With the economy falling back into recession, pressure on wages is downward.
    With the Fed printing madly, pressure on prices is upward.

    The people working at the bottom, probably will end up unionizing, as they are caught in a vise.

    The solutions you mention regarding regulations, will not happen, as per the crony capitalists you also mention,
    and there is no regulatory lessening that will give these workers higher income anyway, in this economic environment, which they desperately need.

    It is possible through Unionizing, which will increase the cost of business, the fast food workers may cause their industry to decline.

    That's actually a good thing, but the workers are in a terrible situation.

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  2. Either way you cut it the problem has gone on for too long to fix it with there being massive disruptions in the marketplace. People are going to start getting pissed this coming year, and likely start rioting and whatnot.

    Nothing that is done to fix the situation will stop this from happening.

    Once it happens it will be easier to take the reins of informing the people on the correct mode of thought that is closer to being in line with reality.

    ReplyDelete