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Yesterday’s News

January 28th, 2014 - 1:38 pm

The big news in Australia today was the announcement by Employment Minister Eric Abetz that the government would “intervene” in a case where Toyota auto workers were forbidden by their unions to vote on an agreement involving their company. As it happened, I was in the audience of about 200 people when Abetz made the announcement, having been shanghaied along to the talk by a friend.

Abetz said, “It is deeply troubling that the employees’ right to vote on proposed variations has been frustrated. Once again we have union bosses dictating the terms without hearing from the actual employees. It is clearly in the public interest that the workers be allowed to vote on Toyota’s proposed variations and determine their own destiny.”

Hence the as yet unspecified intervention which is big news down under, though probably no one else will have heard of it.

It immediately brought to my mind the recent dispute at Boeing where the local union voted to accept the company’s terms in order to keep the jobs in Seattle, though I wonder whether any one else at Abetz’s talk thought of it. Union factions subsequently argued that pressure had been brought upon them to agree to Boeing’s terms. Others thought the ballot itself was conducted unfairly because some workers were on vacation.

When union members narrowly voted to approve the contract that freezes Machinists’ pensions but assures the 777X will be built here rather than in a nonunion state, “The International got the result they wanted,” said Redrup.

Many union members — particularly the more experienced, older workers — had added a couple personal days to Boeing’s winter break and were still on vacation Jan. 3.

“If the vote had happened on the 5th or 6th, the outcome would have been totally different,” Redrup said.

The core of active opposition to the contract did come from a cadre of older Machinists. Many younger members are less active in the union, and some expressed more concern about future job prospects than retaining their retirement pensions.

These charges were dismissed as ridiculous by other factions in the union. The Seattle Times described the fault line as between older workers seeking to protect their pensions under the agreement versus the younger set who simply wanted to keep their jobs. That seemed to capture Abetz’s talk in miniature. It began as a survey of what he called the “Thirty Years War” in Australian industrial relations. In it Abetz traced, with personal anecdotes, the path from the old confrontational days to an apparent modus vivendi in the early 1990s between what he called a Labor Party with a modicum of economic literacy and their conservative political counterparts.

But this Golden Age did not last, Abetz said, as he launched upon a detailed description of the concessions and giveaways recent Labor governments had embarked upon. He characterized the late ministers as having transformed themselves into “Santa Claus” and “Santa’s Little Helpers” for the union. And he traced their downward path from there until the electorate returned Abetz’s more conservative party to power.

One member of the audience asked whether a return to the days of compromise were at all possible. To which Abetz replied, ‘why not? If it were possible once, it would be possible again.’ He added however that it would only be possible when companies found the will to stand up for their own legitimate rights and workers realized that they could not finance pay hikes by borrowing on the wages of future generations.

While Abetz’s arguments were forceful and contained much to recommend them, I could not help thinking that the relative balance in industrial relations was less a function of rational political leadership than the consequence of lagged feedback.

Lagged feedback occurs when actions are based on the last period’s inputs. Say you are flying an airplane and you push the yoke forward. At first nothing happens, so you push it forward some more. But then the response catches up and you’ve found that the plane is nosing over faster than you wanted. You have just been a victim of lagged feedback. This idea is captured by the adage that “generals are always fighting the last war”. They are acting on the last period’s information, shooting at where the target was rather than where it is now.

That may partially explain why older Boeing workers, formed in a more favorable business climate, think they can safely push Boeing to the wall, in contrast to younger workers who are mortally afraid that Boeing may go bust or move to another state. They may inhabit the same shop floor but they live in different mindsets. It’s possible today’s union leaders attitudes were formed in the good times while the younger workers live in a world where the bad times have come.

Recent polls taken by the Washington Post show that between 60 and 70 percent of Americans feel the country is on the wrong track. This stands in stark contrast to an opinion piece in the New York Times which declares that things have never been better. The NYT writes, ”President Obama will pronounce on the state of the union for the fifth time on Tuesday, and never during his time in office has the state of the economy been better — yet rarely has he gotten such low marks from the public for his handling of it.”

The Washington Post survey and the NYT articles were written within days of each other yet they might be describing two totally universes. Well the calendar might indicate a single date but to examine mentalities you have engage in some form of time travel.

One way to handle control lags is to make only the minimal assumptions about the future; to regard the act of prediction as a risk factor in its own right.  This goes against the bureaucratic grain. Bureaucrats love the idea of the “plan”. Joseph Stalin introduced the idea of the “Five Year Plan”, in the apparent belief that a stable planning horizon would facilitate his actions. They produced the contrary result. These were perfect examples of prediction-induced risk.

The first Five Year Plan (1928-1932) was declared completed a year early and the second Five Year Plan (1933-1937) was launched with equally disastrous results. A third Five Year began in 1938, but was interrupted by World War II in 1941.

While all of these plans were unmitigated disasters, Stalin’s policy forbidding any negative publicity led the full consequences of these upheavals to remain hidden for decades. To many who were not directly impacted, the Five Year Plans appeared to exemplify Stalin’s proactive leadership.

Worse, the mere fact of the Plan’s existence made it necessary to pretend it was succeeding.  And yet we are as enamored of Plans as ever. The more long-term they are the better planners we account ourselves to be.

In that case perhaps Abetz’s memory of a golden age of compromise was right after all. Nothing went “according to plan” for either the conservative or the labor leaders of the early 1990s. They just made the best of things. One of the least appreciated benefits of localized, individualized solutions is that they mitigate the control lag effect. There is less likelihood of one set of people living in the remembered “best of times” while another live in the actual “worst of times”. But I doubt that many pundits will see it that way. For them it will be a case of class warfare as usual. The term itself is redolent of 19th century connotations. But then, while we live in the 21st century, the great majority of our political and intellectual leaders still live in a mental world some hundreds of years old.


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Top Rated Comments   
Assumptions a about the future seem to be part of human nature. My depression era mother was extremely careful with her money because her assumption was that there was always a risk the depression could return. The young adult patients I see assume that they should be able to start at the top because their parents delayed having children until they were already prosperous and thus deprived their kids of seeing a young couple struggle to build a life.

My medical students assume that people will continue to innovate, come up with new medical technology and new medications even when the government imposes huge disincentives on innovation. And their left-leaning professors assume that doctors will continue to work just as hard as ever even in the face of being turned into civil servants under a future single payer system.

And we all would like to assume that the traditions of Constitutional government will endure in the face of the erosions in it taking place in this time.

My mother would also say, "If we could predict the future we would all be thin and famous." Too bad I flunked that course.
38 weeks ago
38 weeks ago Link To Comment
"They will fight to maintain the bubble [which is their national culture and heritage] as we fight to retain what is left of ours."

Their national culture boils down to 2 things:

1. Government guaranteed income stream, up to and including disenfranchisement and persecution of believers in limited government.

2. Government guaranteeing their right to pursue whatever material/physical pleasure they desire even if it corrodes the society and still be considered "good" people, up to and including said government disenfranchising and persecuting of those who dare to point out the corrosion.

Our side want things that require a great deal more thought and effort for our national culture - personal responsibility, cause-and-effect in the realm of economics and behavior, limited government and more effort at being self reliant, freedom of philosophy and religion, an understanding that government enforced equality of outcomes is inherently evil, etc.

To small, immature, illogical, entitled, envy-driven minds, the former is just an easier sell.

And ultimately, they WILL disenfranchise and visit violence upon those who get in the way of their guaranteed money and desires. As I pointed out in a previous thread, any of these leftist pundits who are showing faux outrage at pointing out that the government is moving in that direction - and you can add Paul Krugman to that list as of today - are precisely the people who will stand aside and do or say NOTHING as our side gets carted off to the camps, except perhaps to silently cheer.
38 weeks ago
38 weeks ago Link To Comment
There is another factor that aggravates "control lag". It is the matter of what is the local observational universe that you inhabit, compared to that of another observer. What are the odds that the New York Times editorialist is facing any personal pain in this economy? What are the odds that his immediate circle of friends has? What are the odds that he or any of his circle have suffered any ill effects yet from Obamacare? It is the Pauline Kael effect.

The older union members have been sheltered from layoffs and unemployment for so long, and since one tends to move in a circle of contemporaries, that they cannot conceive that such could occur. It is outside their observational reality. Especially, both for the NYT writer and the senior Boeing workers, that given the informational inputs that they are likely to receive in their respective regions; any discussion of a bad economy is likely to be interpreted as evil, right wing opposition to "Teh Won"'s march to the glorious future and immediately dismissed.

Two countries, different cultures, ideologies, languages, and perceptions of reality. Trapped within the same borders which they both claim. Although I will grant that the Leftist TWANLOC are dubious about the existence of borders and will welcome the inevitable Permanent Open Borders and Amnesty .... right up to the moment that they lose their jobs and privileged position to one of these "desirable" new "immigrants".

At that point, to a certain extent their observational bubble will pop. Until they rationalize that somehow it is all an evil, right-wing plot. They will fight to maintain the bubble [which is their national culture and heritage] as we fight to retain what is left of ours.

Subotai Bahadur
38 weeks ago
38 weeks ago Link To Comment
All Comments   (12)
All Comments   (12)
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We moved to Sr. Paul, MN a decade ago. The Ford plant had been there since the 1940s. Home of the little Ford Ranger, it was down to assembling parts all made in other countries.

I would meet people in town in their 50s who had retired from there as apprentices-in their 50s. No person under 40 had had a job there in decades, and no one ever moves up anymore either.

And when I would ask why they didn't look for work elsewhere, the answer was always: plant will never close. Ford threatens but always folds. They just bluff. They have been blurring for 30 or 40 years and will bluff forever.

They just had grown to believe that since no one could remember the bad times, they wouldn't ever have any anymore.

The site has been gone a while now. Just a site for stealing metal from the dismantling job now. But at least no young person supporting a family lost their job. They hadn't had one there in decades anyway.
38 weeks ago
38 weeks ago Link To Comment
In case you have not heard, Twinkies are coming back, just like the striking union workers predicted.

They said they were tired of negotiating and they just wanted it to all be over. They would get a better deal from whoever took over the Hostess plants.

But the company taking over the few Hostess plants that are being reactivated is not hiring any union workers.

I guess they got what they wanted, huh? They’ll never get tired of negotiating again.
38 weeks ago
38 weeks ago Link To Comment
Kinda like the PATCO strike in 1981.
38 weeks ago
38 weeks ago Link To Comment
One of the interesting twists to the Boeing election was the charge of hypocrisy.

State officials were vocally arguing for the Boeing union members to accept the contract. It would curtail defined benefit pensions for union members.

It was pointed out that the same government people urging ratification themselves had defined benefit pensions.

The union rightly noted the discrepancy. The resolution is to recalibrate government pensions so much better than can be afforded in private industry.
38 weeks ago
38 weeks ago Link To Comment
The Workers Party depends entirely on a government designed to feed it.

The information "lag" is exacerbated by the filters and governors placed on the information stream that intentionally distorts the feedback necessary to fly the plane. You can't rely on the feedback because it is rigged to give you false readings.

Therefore, the "lag" between perceptions of pitch and yaw is not the only issue. You are being fed false pictures of the landscape. Which ups the probabilities of finding an iron cloud in your future.
38 weeks ago
38 weeks ago Link To Comment
THE STATE OF OUR UNION

Speaking of unions, President Obama addresses the assembled members of Congress tonight and tells them he will rule by diktat, issuing Executive Orders to do the things he wants done, regardless of Congress’s views on the matter.

I stand before you here tonight
Unwanted and confused
Confessing that our country’s plight
Has left you unamused
But I am here to set it straight
Not if nor even when
But now, alone, I shall not wait
And with my mighty pen
I’ll do what I think needs be done
I‘ll do it without you
Cash money grants for number one
No red states, only blue
I’ll send you packing, send you home
I’ll rule, that is my style
I’ll empty out this ancient dome
Right after you say Heil

38 weeks ago
38 weeks ago Link To Comment
Assumptions a about the future seem to be part of human nature. My depression era mother was extremely careful with her money because her assumption was that there was always a risk the depression could return. The young adult patients I see assume that they should be able to start at the top because their parents delayed having children until they were already prosperous and thus deprived their kids of seeing a young couple struggle to build a life.

My medical students assume that people will continue to innovate, come up with new medical technology and new medications even when the government imposes huge disincentives on innovation. And their left-leaning professors assume that doctors will continue to work just as hard as ever even in the face of being turned into civil servants under a future single payer system.

And we all would like to assume that the traditions of Constitutional government will endure in the face of the erosions in it taking place in this time.

My mother would also say, "If we could predict the future we would all be thin and famous." Too bad I flunked that course.
38 weeks ago
38 weeks ago Link To Comment
Saw Dr. Ben Carson on TV the other day. He had been over to Europe.

He said the doctors there were saying that we were going to move to a health care system like theirs.

But they also said they were not gloating. "We are sorry to see that occur. The innovation comes from you Americans and we won't see that any more."
38 weeks ago
38 weeks ago Link To Comment
The Union mindset runs deep and strong even outside the union members. Just look at the vitriol spewed whenever someone even touches the sacred cow of Social Security...

A contract made by your father should not be binding upon his children and anyone who forges such a pact is foolish to the extreme.

There will come a reckoning and it will not be tidy and clean.
38 weeks ago
38 weeks ago Link To Comment
There is another factor that aggravates "control lag". It is the matter of what is the local observational universe that you inhabit, compared to that of another observer. What are the odds that the New York Times editorialist is facing any personal pain in this economy? What are the odds that his immediate circle of friends has? What are the odds that he or any of his circle have suffered any ill effects yet from Obamacare? It is the Pauline Kael effect.

The older union members have been sheltered from layoffs and unemployment for so long, and since one tends to move in a circle of contemporaries, that they cannot conceive that such could occur. It is outside their observational reality. Especially, both for the NYT writer and the senior Boeing workers, that given the informational inputs that they are likely to receive in their respective regions; any discussion of a bad economy is likely to be interpreted as evil, right wing opposition to "Teh Won"'s march to the glorious future and immediately dismissed.

Two countries, different cultures, ideologies, languages, and perceptions of reality. Trapped within the same borders which they both claim. Although I will grant that the Leftist TWANLOC are dubious about the existence of borders and will welcome the inevitable Permanent Open Borders and Amnesty .... right up to the moment that they lose their jobs and privileged position to one of these "desirable" new "immigrants".

At that point, to a certain extent their observational bubble will pop. Until they rationalize that somehow it is all an evil, right-wing plot. They will fight to maintain the bubble [which is their national culture and heritage] as we fight to retain what is left of ours.

Subotai Bahadur
38 weeks ago
38 weeks ago Link To Comment
"They will fight to maintain the bubble [which is their national culture and heritage] as we fight to retain what is left of ours."

Their national culture boils down to 2 things:

1. Government guaranteed income stream, up to and including disenfranchisement and persecution of believers in limited government.

2. Government guaranteeing their right to pursue whatever material/physical pleasure they desire even if it corrodes the society and still be considered "good" people, up to and including said government disenfranchising and persecuting of those who dare to point out the corrosion.

Our side want things that require a great deal more thought and effort for our national culture - personal responsibility, cause-and-effect in the realm of economics and behavior, limited government and more effort at being self reliant, freedom of philosophy and religion, an understanding that government enforced equality of outcomes is inherently evil, etc.

To small, immature, illogical, entitled, envy-driven minds, the former is just an easier sell.

And ultimately, they WILL disenfranchise and visit violence upon those who get in the way of their guaranteed money and desires. As I pointed out in a previous thread, any of these leftist pundits who are showing faux outrage at pointing out that the government is moving in that direction - and you can add Paul Krugman to that list as of today - are precisely the people who will stand aside and do or say NOTHING as our side gets carted off to the camps, except perhaps to silently cheer.
38 weeks ago
38 weeks ago Link To Comment
When will the Great and the Good get it? The unplowed streets on the Upper East Side may have been a clue to some. That used to happen only in the outer boroughs, or the Sticks. When there are weed filled lots around shuttered houses in the Hamptons they may learn. You cannot kill the chicken to scare the monkey and still get eggs.

Believe it or not I used to be a union Shop Steward. Bad management creates bad workers. The rot is deep at all levels.
38 weeks ago
38 weeks ago Link To Comment
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