Taft-Hartley; Wall Street

Very light blogging today due to a busy schedule...

This last week I created a new game to pass time while crossing the Bay Bridge (connecting Oakland to SF) -- count the number of container ships moored idly offshore. It was starting to look like a parking lot out there (this morning I counted 20 of the behemoths). The reason, as most people know, was the West Coast labor dispute between the port operators and the longshoremen's union. Unlike popular perception, the union wasn't striking -- it had been locked out by management after the two sides failed to reach a new labor agreement.

Now Bush has invoked Taft-Hartley to force the workers back to work, even though it was management that had locked the gates. Labor lawyer Nathan Newman has all the gritty details here and here.

Bush's own mediator had negotiated a 30-day extension of the union contract, which the ILWU had agreed to. Management had not, so Bush rewarded them with a Taft-Hartley injunction. On CNN, AFL-CIO's Rich Trumka declared that this was the first time in American history that a Taft-Hartley injunction had been issued during a lockout. He condemned the Bush administration's collusion with management.

I'm not a labor lawyer, so keep checking Newman's blog for info on the legal machinations of the case. Politically, however, the lockout was a no-win for Bush. The port shutdown was wreaking havoc on domestic retailers and farmers -- worsening the weak economy, while invoking Taft-Hartley would invoke the wrath of the unions. Pissing off the unions was probably Bush's safest bet -- heck, it's the first thing he's done for the economy in the past year! However, Bush has motivated unions nationwide to put their best efforts into ousting Republicans in the coming elections.

And as far as the economy is concerned, the markets are still getting pummeled (the Dow is at 7,289 as I write this). At the going rate, the Dow will be below 7,000 on election day. How could it go up? All economic indicators are down, and corporate malfeasance issues that led to many of the losses are not being fixed. Molly Ivins writes:

They've already called off the reform effort; it's over. Corporate muscle showed up and shut it down. Forget expensing options, independent directors, going after offshore shams, derivatives regulation. For that matter, forget even basic reforms like separating the auditing and consulting functions of accounting firms and rotating accounting firms every few years. Bottom line: It's all going to happen again. We learned zip from the entire financial collapse. Our political system is too bought-off to respond intelligently.

On the jobs front a quick glance at the Google News business section gives us:

Corning to lay off additional employees in the heels of 4,400 pink slips in July
• Abbott to cut 2,000 jobs

• ATT Cable to cut 1,700 jobs

• US Airways to cut an undisclosed number of jobs

• Wall Street is bracing for more job cuts. The financial sector has already lost 32,000+ jobs since year-end 2000.

• CSFB will cut 1,750 jobs.

And all that is just today. As more companies announce earnings, expect to see the cuts continue to add up. Throw in decimated 401(k)s, dwindling unemployment benefits, meager job prospects, and war, and you mean to tell me that voters won't punish the GOP for the mess they have wrought?

The pundits are still arguing that the electorate hasn't blamed Republicans for the economy, and it is true that Democrats have had a hard time talking about the economy amidst the current Iraq hysteria. But to think that economy won't be a major factor in the elections would contradict a century of American electoral patterns. Anything is possible, but it's improbable the GOP will have much to celebrate election night.

Posted October 09, 2002 01:12 PM | Comments (3)