May 16, 2011

Another Damaging Power Grab by the Obama Administration

by Hal Gershowitz

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Earlier this year, under the title “Who Needs Congress:  Legislation by Regulatory Fiat,” we expressed concern that the Obama Administration was moving to checkmate the 2010 Republican electoral sweep by getting its acolytes and bureaucrats in the regulatory agencies, which the Administration controls, to do its legislative work for them.  We cited our fears that the agency bureaucrats, most of whom aren’t even confirmed by Congress, would use their almost unlimited power to write regulations and make legal interpretations of, ambiguous at best, legislative language to determine the “will” of Congress in passing legislation it never even read.  The common thread, we feared, was to transfer more and more control over the private sector to the Federal government.

Back in January, the fear was that the very controversial health care legislation would be expanded to incorporate provisions on which even Congress gagged.  And as it came to pass with Medicare issued regulations no one in Congress anticipated, including what Sarah Palin referred to as the “death panels” but with the more sanitized name of “end-of-life counseling”.

We expressed other fears earlier this year, none of which have abated . . . and in some cases have increased. . . an FCC power grab over the largely unregulated . . . and therefore hugely successful internet, in the form of so‑called “net neutrality” rules; and the Federal Energy Regulatory Commission proposal of a proposed rule to take away from the states the right to regulate retail electricity service.

And what we then referred to as the “granddaddy” of them all — the power grab of the EPA which determined that carbon emissions were  a pollutant. EPA has also moved to strip states of authority to issue permits for large power and industrial projects and grab that authority for themselves.

Yet we have underestimated the aggressiveness of the Administration in its encroaching muscularity.   The White House and its regulatory toadies are now making a serious, and we think dangerously transformative, effort to decide where in the country private companies can build manufacturing (and by extension of this incredible grab) any other facilities.

On April 20, the National Labor Relations Board filed a complaint against Boeing alleging that its decision to build a second assembly plant in South Carolina instead of the state of Washington was illegal because it amounted to a retaliatory action against the International Association of Machinists.  The NLRB seeks as a remedy for this phony cause of action a judicial order forcing Boeing to shift production of its long delayed Dreamliner commercial jet from South Carolina back to its main facility in the Seattle area,  Can anyone see presidential politics here in trying to force one of America’s main competitive manufacturing companies from a red state to a blue state or are we just being cynical?  Does this have anything to do with labor’s inability to force its reviled card check law through Congress?  If this action of the NLRB were to stand, card check would be small potatoes.

A little summary digression into labor law history is in order here.  In 1947 Congress passed what is known as the Taft Hartley law, which amended the National Labor Relations Act of 1935 (the “Wagner Act”).  Pre Taft Hartley employers were forbidden from engaging in certain practices, which would interfere with the rights of employees to organize and bargain collectively.  The Wagner Act permitted unions to have closed or union shops.  This shifted economic power in labor relations heavily to labor.  Thus, in 1947 the Wagner Act was amended to add among other features, a list of prohibited labor union practices such as secondary boycotts and sympathy strikes to force an employer, other than one’s own, to recognize a previously unrecognized union.  Closed shops were also outlawed.  Hysterical unions feared workers would be working for slave labor.  Historian R. Alton Lee in his book on Taft‑Hartley stated that . . :

“…urgency for amending Taft‑Hartley waned during the 1950s because it did not become the slave labor law union leaders predicted.  Continued prosperity calmed fears that the law would adversely affect wages, hours, and working conditions, and labor‑management relations steadily improved in most parts of the nation.”

In light of Taft‑Hartley provisions which made certain actions by unions illegal, a several states have enacted “right to work” laws which declare that “denial of right to work [because of] . . . non membership in a labor union [is] against public policy.  South Carolina law (Title 1, Chapter 7 states:

“It is unlawful for an employer to require an employee, as a condition of employment to join a union, or of continuance of employment to:

Be or become or remain a member or affiliate   of a labor organization or agency;

Abstain or refrain from membership in a labor organization; or

Pay any fees, dues, assessments, or other   charges or sums of money to a person or  organization.”

However, in the history of this law or any law governing labor relations never has the union movement sought, nor the NLRB backed, any regulation which would require a company to build any facility in a state demanded by labor unions.

But unions want to force union membership on workers who demonstrably do not want to belong, pay dues to overpaid union bosses or make political contributions to candidates they have not freely chosen.  Private sector union membership has fallen in recent years from 36 percent of the work force to 12%.  According to the Washington Examiner’s April 22 edition:

“Americans are leaving states with heavy union influence and choosing to live in ‘right-to-work’ states with higher job growth where they cannot be forced to join a union as a condition of employment. With the 2010 census, nine congressional seats will move to right‑to‑work states from forced unionization states. And Americans elected a substantial majority of Republicans to the House of Representatives in the 112th Congress.  People will be safe in 2011‑12 from the Employee Free Choice Act, a union‑supported bill that would take away workers’ rights to a secret ballot in union elections and impose mandatory contracts between newly unionized firms and workers.  But the Obama‑controlled National Labor Relations Board isn’t listening. It wants to do everything in its power to tilt the playing field toward unionization, even if it means lost jobs … Despite a national unemployment rate [in excess of 9 percent] and Americans’ unequivocal preferences for jobs, the board is taking matters into its own hands to expand union power.”

So what was the NLRB’s rationale for this unprecedented power grab?  The general counsel of the Board claimed that a Boeing executive, by citing the numerous strikes against Boeing at its Puget Sound facility, had shown anti‑union animus, thereby violating federal law.  Never mind that numerous companies have, over the last 50 years, moved their facilities or built new ones in right to work states.  Job growth in the last 25 years in right to work states has increased while decreasing in non‑right to work states.

Of course, we all know that President Obama is focused on jobs, jobs, jobs.  Unemployment rose again last month to 9 percent, which is higher than when the president took office in 2009.  His anti‑business labor policy sounds more like the marines who after being forced through a punitive workout are required to shout, “May I have another sir?”

In short there are countless precedents of businesses relocating to right to work states.  No doubt, in this global economy that has kept millions of jobs in America, notwithstanding our non‑competitive corporate tax rates.  To tell Boeing, perhaps the world’s leading aircraft manufacturer and one of the dwindling number of major American manufacturers who have not yet outsourced most manufacturing to less expensive locales, where it can and cannot build its production facilities, is not only an illegal and unprecedented expansion of regulatory authority, but it is both a stupid and venal decision.  Boeing has, even with the planned Dreamliner shift to South Carolina, actually significantly increased the number of its employees in the state of Washington.

One would expect forced labor location decisions in Russia, or China during the Cultural Revolution.  This latest Obama administration outrage eclipses almost all of this president’s and his administration’s other power grabs.  Hopefully the courts will slap him down and the electorate will remember in 2012 this attempt by the Administration as a serious attempt to override the clear cut law of the land.  If not, don’t expect too much investment by business in America when they clearly have other choices.  If this power grab stands, our downward economic trajectory will continue and steepen for years to come.


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4 responses to “Another Damaging Power Grab by the Obama Administration”

  1. […] post: Another Damaging Power Grab by the Obama … – Of Thee I Sing 1776 More imaginecreativeprojectsgroup: Part I. The Source… performed on stage in musicals such as […]

  2. Mark J Levick says:

    Unfortunately for Boeing military hardware represents a significant percentage of its business and it cannot aggressively respond by shipping the business off shore. Curiously the mainstream print media which is currently engaged in a struggle for it’s economic life with its unions has not focused on this story of union political clout trumping competitive necessity. For this Admistration job creation means union jobs. Historically the inefficiencies and attendant cost increases associated with union labor has been an anathema to
    Economic growth. If the Republicans can field a viable candidate and adequatel fund an effective campaign our fearless leader will learn the meaning of “it’s the economy, stupid” and a new administration can enroll its bureaucracts in Economics 101, a course which probably will not appear on Obama’s collegiate transcript if it ever sees the light of day.

  3. Jerry Rotblatt says:

    Was aware of this mat’l, but comforting to know I haven’t
    been dozing….. Keep ’em coming, good material from smart

  4. Philip Hixon says:

    Perfectly written, clear and irrefutable. If the courts let this stand, every business with a union will have to negotiate with its union before moving or even expanding. Free enterprise will be severely damaged and our nation will suffer greater unemployment as companies outsource overseas. We must make a change of administration in 2012.

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