Still more thoughts about - A New Day

Today, we turn to the opinions of Professor Richard A. Epstein of the New York University Law School, entitled:  Deregulate Labor Markets Now.

"Wide-ranging de-regulation of labor markets would produce an immediate economic jolt without costing taxpayers a dime.  Labor markets are hobbled every day by ever-more intrusive regulations and taxes, with two costly consequences.  First, they reduce the opportunities for gains from trade between employers and employees.  Quite simply, if the cost of regulatory or tax compliance exceed the joint gains from the transaction, the deal is off.  Second, these regulations add huge administrative expenses, both in the direct costs of government enforcement and in private compliance costs.  We should never spend tax dollars to reduce productive activity.

So we have to bid farewell to the egalitarian mantra that we can lift the nation up out of its doldrums by raising minimum wages to living wages, by tightening overtime regulation, by strengthening public and private unions, by extending family-leave protection, by continuing with aggressive enforcement of the anti-discrimination laws based on race, sex and age, by imposing health-care mandate on employers, and by extending un-employment benefits.  The tragic truth is that these feel good measures his hardest at the bottom end of the labor markets, especially minority teenagers desperate to gain work experience.  Employers won't hire if they think that reforms are short-term gimmicks.  Protectionist policies never work.  But long-term stable reform could and should reverse those dismal un-employment and labor-participation figures."

Oh how I wish that I had been Professor Epstein' class monitor for this examination.  Avoiding just a few of the pertinent facts was almost a crime in my day and age and it's difficult for me to imagine anyone who knows anything about the pertinent problems regarding employment to allow a passing grade for this "essay".  Yes, I know it was merely an addenda to a politically inspired effort to convince folks that whatever is not working in our society is the fault of the other party. 

First off, there will be no "wide-ranging" deregulation of our labor markets without the expressed consent of our Congress.  There may actually be a politically inspired effort to do so, but as long as our government is regulated by the efforts of the Congress and the approval of our President, we should not be intimidated by thoughts as expressed by Professor Epstein.  Don't let anyone scare you into believing otherwise.

And there will be no economic jolts in the labor marketplace as there are few - in any, organizations capable of energizing such an event, the threats of certain legislators notwithstanding.

Nor are there any egalitarian mantras" other than the wishful thinking of those who have been to the "market" and failed in the process.  We get confused by the size of many of out corporations and are tempted to believe that their policies and practices are at the root of many of our problems regarding employment, but the heart and soul of the labor force still carries the proverbial "lunch bucket" to and from their places of employment.  Alas, they do not have any real power.  Proof of this is found in the recent efforts to raise the minimum wage by picketing McDonalds and their closest competitors.

If we want to address the "problems" cited by the good Professor, all we really need to do is have the leaders of the major employers in our nation, to invite the leaders of 100 or more various groups claiming to represent the working class, to a "retreat" lasting a week or more in some exotic place, far removed from the "media" and earnestly address the issues they have agreed upon to discuss.  Then, turn the findings over to the public-at-large for their approval.

Anything less would be an insult to all who earnestly seek resolution to the real problems we are experiencing.  It might be entitled - Democracy in Action.  Who knows, there might even be some who would report having "seen" smiles on the faces of our founding fathers.

More thoughts about - A New Day

I trust you recognize the name of George Gilder, author of the book "Knowledge and Power: The Information Theory of Capitalism"  (Regenery, 2013)  I will admit, I have not read this book, but when I hear of George Gilder, I stop and listen and have never regretted the time spent, reviewing his thoughts.  I trust you will feel the same after reading the following:

"In 1966, the eminent management sage, Peter Drucker wrote about government regulation in his book, "The Effective Executive" that "at a guess, at least half the bureaus and agencies in government regulate what NO LONGER NEEDS TO BE REGULATED."   (My emphasis - SM).  He added, "There is a serious need for a new principle of effective administration under which every act. every agency, and every program of government is conceived as temporary and as expiring automatically after a fixed number of years - maybe ten, unless specifically prolonged by new legislation following careful outside study.

When Drucker wrote, the U.S. was by far the leading force in world capitalism, and most regulatory bodies were relatively new.  Today, the U.S. is falling behind Asian leaders in capitalistic vitality.  Not only is the U.S. less free than Hong Kong, it is less capitalistic by many measures than China, allegedly a Communist country, China now boasts of government revenues of just 17% of GDP, compared to U.S. revenues of 26% of GDP.

The key problem is the same one that Drucker identified in 1966 - a glut of regulations and programs that that no longer serve their purposes, but which constitute a nearly insuperable barrier to creative new enterprise.  Twenty years ago, initial public offerings in crucial technology domains exceeded mergers and acquisitions by a factor of 20.  Today, there are eight mergers and acquisitions for every IPO.  Large companies that can deal with the mazes of government rules increase their dominance by purchasing potential rivals.

Most efforts focus on making regulations more efficient.  But efficient performance of futile or obstructive functions make the problems worse.  What we need is what Peter Drucker recommended, expiration dates for regulations."

I have to ask, do you - as a voter, as one who serves to elect the people who will - hopefully, go to Washington to heed Drucker's counsel, do you think it will ever happen?  Personally, I doubt it as I have spent far too much of my time attempting to counsel potential voters.  To most, a job is merely a paycheck and the success of their employer hardly ever enters their mind.  When they go to vote, it is far more easier to vote for the Party that seemed to impress the "father/mother" figures at home and they have no concept of the expanding economies that provide the revenues on which our economy is based.

Case in point, many, many years ago, I heard that the government was considering replacing many of the people in their "Department of Employment" offices. as they were known in those years.  The problem as I saw it was the fact that the local employment offices were staffed with people who knew where all of the jobs existed in their area.  They did not need to know the names of the people seeking a job, all they needed to know was their skill and they could identify that by referring to their copy of the D.O.T, a Dictionary of Occupational Terms.   By comparing the individual's code to the codes that were part of every employer's 941 report that was sent to Washington, every fiscal quarter, they could tell whether the job prospects were good or perhaps, not so good.  All they to do was call the employer and inquire about the possibilities.   I went to Washington armed with the suggestion that the applicant could do that and reduce the cost of having employees carry that burden.

What I did not realize was the fact that the people in Washington wanted to do was increase their stature (their incomes) by having "high tech" equipment available in all of their offices - that told them what the applicant's name was, but paid no attention to the D.O.T. knowledge that I understood could be used to facilitate an applicant's job search.  I cannot speak for other areas, but I can assure you that no one in the local Human Resources offices have a clue as to what I am referring to and if they did, nothing could be done until it was forwarded on to Washington and probably be lost in the maze of computer information that has little or nothing to facilitate putting people to work.

For decades I have searched for just one candidate for Federal office who would take the time to sit and listen, with no results.  And I happen to believe, my example is merely one of the thousands that float around only because we prefer to have politicians to represent us rather than skilled technicians.