"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27,2010

Thursday, April 1, 2010

The Protection Committee

Most people are not union members. Most people work in jobs where they can lose their employment for any one of a number of reasons. Sometimes no reason at all. Usually, though, people lose their jobs because of poor performance, either by them or by their employer. This simple fact is a key component of our free enterprise system. The competitive prevail until a better competitor comes along. New and better products and services replace older products and services. Most of us know this. We all benefit from this process even though it can be anxiety producing.

There is one guy who has benefitted from it but he sure doesn’t support it. He thinks it makes sense to pay more for something than someone else is willing and able to provide, at the same level of quality, at a lower price. He thinks you should keep your job even if you are not doing your job. He also thinks you should keep your job even if your employer is not as competitive as another employer. Who could this person be? An attorney? A politician? Both? Where could this form of foolishness survive and thrive? Where do they teach protection over competition? Where do people believe that it is better to pay the highest price? When you go shopping do you always look to make your purchases at the highest possible price? Who has such abundance that this form of waste and corruption can actually be the preferred system? Better than open bidding; better than the selection of highest quality at lowest price? And, if someone wanted to improve the economic growth of a country, encourage job creation and successful, competitive businesses that could beat out foreign exporters and sell more overseas, would that someone encourage protection and higher costs and lower productivity? Well, let’s see.

Two days ago we posted an essay wherein the president set up a committee of bureaucrats to promote doubling US exports in five years. A little over a year ago, just after taking office, Obama issued an executive order. The order was issued on February 6, 2009. It undid a GWBush order that required federal contracts to go to the lowest bidder in open bidding. The new order says federal contracts must go to union shops only. Forget about right to work laws which many states have. If you want to get a federal contract you had better be a union shop and that the highest prevailing wage be paid to all labor involved in the contract. This order is a very costly political payoff that is exactly the opposite of the type of government action that would work toward making America more productive and more competitive on world markets. Why don’t one of those brilliant economists with names like Bernanke and Summers and Orszag and Reich and Krugman prepare one of their prize winning mathematical models that will show how this order will do anything to cause a consumer in foreign country to buy something made in the US of A?

Here is the order. Read it for yourself. We are not making this stuff up!

Revoking GWBush Open Bidding Orders - http://www.whitehouse.gov/the-press-office/executive-order-use-project-labor-agreements-federal-construction-projects  

TheFundamentals has no problem with union shops getting federal contracts or any contracts for that matter. We just happen to know that competition comes from open bidding; where the best provider at the lowest cost prevails. What on earth is the purpose of favoring the union shop? The United States is playing in a large arena with many capable competitors. Union protection decrees and rules and legislation do not make the US more competitive. They make us less competitive. These artificial, anti-market/anti-competition decrees destroy our competitiveness in exports. Will any of Mr. Obama’s bureaucrats on his Export Promotion Committee stand up and state this simple fact? Will anyone ask Mr. Obama about these bad decisions? Please don’t forget this posting come November 2, 2010.

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