What does a TRUMP presidency look like?

[saskganesh]

Yi makes argument. Too lazy to do research. Throws the question back to cover his socratic ass.

[DGuller]

In my opinion, one factor to keep in mind is that income equality is a goal that is worth something.  If the only way to achieve it is at the cost of some economic inefficiency, it may still be a good trade, depending on the how much inefficiency we're talking about.  Social instability due to unequal distribution of wealth can also be pretty costly.

[Admiral Yi]

Yi makes argument. Too lazy to do research. Throws the question back to cover his socratic ass.

There's no productive line of discussion that can follow from this comment.  So I'll focus on the grown up talk instead.

[DGuller]

Yi makes argument. Too lazy to do research. Throws the question back to cover his socratic ass.

That's uncalled for.

[Habbaku]

In my opinion, one factor to keep in mind is that income equality is a goal that is worth something.  If the only way to achieve it is at the cost of some economic inefficiency, it may still be a good trade, depending on the how much inefficiency we're talking about.  Social instability due to unequal distribution of wealth can also be pretty costly.

The price of guillotines is at an all-time low, I hear.

[crazy canuck]

US unions had plenty of legal protections too in their heyday.  In fact, it's pretty hard to keep unions alive without legal protections.

What protections, beyond not actually being declared illegal are you thinking about?

In Germany Unions are essentially in the Boardroom.

Protecting unions against busting or not forming.  Enforcement of unions contracts.  Union shop rules and ability to collect dues from all covered workers.  There is way more stuff, but I'm not a labor lawyer.

So, you suspect that there is more but you don't know - fair enough.  In relation to what is occurring in the Germany, US unions have a bare minimum of legal protection.  You asked what the structural differences between the two countries might be.  These are fundamental structural differences.  Companies in Germany have faced a legal imperative to adapt to dealing with unions as a stakeholder in the business.  There are likely other factors as well (cultural and ideological views are also important), but the difference in legal rights in the two countries goes a long way to explain the difference in behavior.

[DGuller]

So, you suspect that there is more but you don't know - fair enough.  In relation to what is occurring in the Germany, US unions have a bare minimum of legal protection.  You asked what the structural differences between the two countries might be.  These are fundamental structural differences.  Companies in Germany have faced a legal imperative to adapt to dealing with unions as a stakeholder in the business.  There are likely other factors as well (cultural and ideological views are also important), but the difference in legal rights in the two countries goes a long way to explain the difference in behavior.

To be clear, I was not comparing labor unions now in US against labor unions now in Germany.  I'm comparing US labor unions from their golden age to contemporary German labor unions. 

I asked why contemporary German labor unions don't appear to be too damaging to their industries, whereas US labor unions during the golden age clearly were pretty devastating in the long run.  I don't think legal protections are the answer, because US labor unions back then had significantly greater legal protections than they do now.  I agree that these days they don't have good legal protection.

[Jacob]

To be clear, I was not comparing labor unions now in US against labor unions now in Germany.  I'm comparing US labor unions from their golden age to contemporary German labor unions. 

I asked why contemporary German labor unions don't appear to be too damaging to their industries, whereas US labor unions during the golden age clearly were pretty devastating in the long run.  I don't think legal protections are the answer, because US labor unions back then had significantly greater legal protections than they do now.  I agree that these days they don't have good legal protection.

I think the high level difference is the degree to which the union and businesses see the workers as stakeholders invested in the business' success, vs viewing the management-union relationship as a mutual zero-sum struggle to obtain the most possible benefit at the cost of the other. Basically, it's the degree to which management and unions see each other as partners or antagonists.

I expect the reason there are two such divergent viewpoints is down to multiple factors. I don't have a clear answer, but it's a good question.

[Berkut]

To be clear, I was not comparing labor unions now in US against labor unions now in Germany.  I'm comparing US labor unions from their golden age to contemporary German labor unions. 

I asked why contemporary German labor unions don't appear to be too damaging to their industries, whereas US labor unions during the golden age clearly were pretty devastating in the long run.  I don't think legal protections are the answer, because US labor unions back then had significantly greater legal protections than they do now.  I agree that these days they don't have good legal protection.

I think the high level difference is the degree to which the union and businesses see the workers as stakeholders invested in the business' success, vs viewing the management-union relationship as a mutual zero-sum struggle to obtain the most possible benefit at the cost of the other. Basically, it's the degree to which management and unions see each other as partners or antagonists.

I expect the reason there are two such divergent viewpoints is down to multiple factors. I don't have a clear answer, but it's a good question.

Hello? Is this thing on?

[crazy canuck]

So, you suspect that there is more but you don't know - fair enough.  In relation to what is occurring in the Germany, US unions have a bare minimum of legal protection.  You asked what the structural differences between the two countries might be.  These are fundamental structural differences.  Companies in Germany have faced a legal imperative to adapt to dealing with unions as a stakeholder in the business.  There are likely other factors as well (cultural and ideological views are also important), but the difference in legal rights in the two countries goes a long way to explain the difference in behavior.

To be clear, I was not comparing labor unions now in US against labor unions now in Germany.  I'm comparing US labor unions from their golden age to contemporary German labor unions. 

I asked why contemporary German labor unions don't appear to be too damaging to their industries, whereas US labor unions during the golden age clearly were pretty devastating in the long run.  I don't think legal protections are the answer, because US labor unions back then had significantly greater legal protections than they do now.  I agree that these days they don't have good legal protection.

Good clarification.  I too would be interested in the answer to why Germany ended up with a collaborate system while the US continued to be extremely antagonistic.  Paging Zanza 

I suspect it has a lot to do with what Berkut said a few posts ago about the general world view in the US.

[Razgovory]

I think we can all take a stand against police unions.

[The Minsky Moment]

Contributing to the stagflation of the 70s then the shrinking and/or death of several industries later as foreign competition came on line.

Maybe.  The causes of 70s era stagflation is still debated.  In attributing causal force to the unions you would be implicitly adopting a cost-push theory that is associated with a Keynsian framework.  As opposed to the monetarists who pointed to monetary laxness under Arthur Burns.  Not sure where you align yourself there.

As for the decline of industry, it's not clear how much difference the unions made - i.e. whether the ultimate outcome would really be much different in their absence.

I'd note that the unions were stronger in the US in the 50s when neither stagflation nor rusting out was a severe problem.

[Admiral Yi]

Maybe.  The causes of 70s era stagflation is still debated.  In attributing causal force to the unions you would be implicitly adopting a cost-push theory that is associated with a Keynsian framework.  As opposed to the monetarists who pointed to monetary laxness under Arthur Burns.  Not sure where you align yourself there.

As for the decline of industry, it's not clear how much difference the unions made - i.e. whether the ultimate outcome would really be much different in their absence.

I'd note that the unions were stronger in the US in the 50s when neither stagflation nor rusting out was a severe problem.

I'm not saying the unions caused inflation singlehandedly.  "Inflation is, and always will be, an issue of money supply." I'm saying they responded to inflation by ratchetting up wage demands, which prevented the labor market from clearing, and which then led the Fed to increase money supply in an effort to sustain full employment. Rinse and repeat.  Nor am I saying unions were the only ones responding to inflation in this way.  But they did possess more power than non-unionized labor to impose their wishes.

As for your last comment: of course.  Pent-up demand, booming economy, no foreign competition.

[The Minsky Moment]

Practically in the US, employee compensation as a share of GDP has decline pretty steadily from around 50% in 1950-1975 to 43% now.  And the distribution of that compensation has increasingly skewed in favor of the higher (managerial) tiers.

If we aren't going to have strong labor unions, then there needs to be some other powerful counter to this trend, or the problems with political polarization and populism or going to get worse.

[Admiral Yi]

Practically in the US, employee compensation as a share of GDP has decline pretty steadily from around 50% in 1950-1975 to 43% now.  And the distribution of that compensation has increasingly skewed in favor of the higher (managerial) tiers.

If we aren't going to have strong labor unions, then there needs to be some other powerful counter to this trend, or the problems with political polarization and populism or going to get worse.

Any idea what has happened to the share of unearned income?  I'm guessing the stock of capital owned by US residents has grown, probably significantly faster than the labor force during that time.