Unintended and Unforseen Consequences

[makattak]

When I have taught Introduction to Economics or any similar intro level econ course, I have emphasized the problem of unintended consequences and unseen effects, much like the Broken Window Fallacy.

Government cannot know the full effect of whatever they do. Generally the unintended and unseen consequences are bad. Liberals, particularly seem unable to grasp this concept.

Yesterday and today we are seeing unintended and unforseen consequences. The liberals in congress thought they could push though an unpopular healthcare law and MAYBE it would cost them the House, but they'd finally have achieved their dream.

Instead, they may have brought down the public sector unions. Because of the overwhelming tide that threw out Democrats in state legislatures, three states are moving to revoke government employees collective bargaining rights. (And one of them is formerly progressive Wisconsin!) I doubt ANY Democrat was willing to make that trade, but due to their inability to think beyond immediate effects, they may have at least weakened, if not seriously injured one of their largest constituencies.

Bravo, Ms. Pelosi, bravo.

[T.O.M.]

Yet the liberals and Dems will blame the GOP for bringing up the idea without acknowledging any responsibility for putting into action the very laws that led to these consequences.  Here in Ohio, now former governor Ted Strickland joined the crowds at the Statehouse, and was quoted calling this all a "Republican-led attack on the middle class."

[Hamilton Felix]

Interesting that Wisconsin left out Police and Fire (who make more and have better benefits than most civil servants).  Seems those groups supported the Republicans in the election.  One really doubts their sincerity. 

Frankly, as both a Libertarian AND a union member of long standing, employed by a large municipal utility whose management is almost 100% scum who just live to f*** with employees, I have benefitted from union membership (I'm one of the frequent targets, due to my inability to kiss up, and my tendency to speak unpleasant truths). 

However, I have been VERY unhappy with many of the union's actions.  And I'm usually INCREDIBLY unhappy with the anti-freedom candidates they support. 

Never mind arguing "closed shop" until the cows come home.  The simple right to collective bargaining is pretty straightforward, and pretty hard to deny.  The other side, of course, is that management says "you're all fired" and locks the doors until they can hire replacements.  But it's hard to say "YOU civil servants (but not those other civil servants) will have no right to collective bargaining, while everyone who is not a civil servant has such a right."  Just doesn't seem consistent.

I'd love to live in L. Neil Smith's North American Confederacy, but I think it depends on mostly good people for its existence.  In my real world, I've been protected from a goodly number of very evil people by my FAR from perfect union.   

[TechMan]

Yet the liberals and Dems will blame the GOP for bringing up the idea without acknowledging any responsibility for putting into action the very laws that led to these consequences.  Here in Ohio, now former governor Ted Strickland joined the crowds at the Statehouse, and was quoted calling this all a "Republican-led attack on the middle class."

Chris, I think Ted is already starting his campaign for re-election. 

[Monkeyleg]

I'm sure that Governor Walker considered the prospects of cops and firefighters being in the crowds of protestors, and realized that would sink his effo

[tokugawa]

If unions were established with the consent of the Government to protect workers from the greedy capitalist employer, then why do the workers need them to protect against the benevolent Government?   And if the Government is BAD , how come the rest of us do not have union protection? 

[Scout26]

Ask that of Liberals and watch their heads asplode !!

Stolen and Facebooked as well.   

[De Selby]

If unions were established with the consent of the Government to protect workers from the greedy capitalist employer, then why do the workers need them to protect against the benevolent Government?   And if the Government is BAD , how come the rest of us do not have union protection? 

Unions are a market concept, that's why - you can ask for more if you have greater bargaining power.  It's harder for any employer to say "take it or leave it, if you don't the next guy will" to a thousand people than to one. 

That's why union workers enjoy better conditions, pound for pound, than non-union workers.  And a testament to how unrealistic "rational self interest" is as a market force is the fact that such a high number of people who would definitely benefit from unions have been convinced to oppose them.

[brimic]

Frankly, as both a Libertarian AND a union member of long standing, employed by a large municipal utility whose management is almost 100% scum who just live to f*** with employees, I have benefitted from union membership (I'm one of the frequent targets, due to my inability to kiss up, and my tendency to speak unpleasant truths). 

Sounds like you are more a part of the problem than the solution.

[Monkeyleg]

And a testament to how unrealistic "rational self interest" is as a market force is the fact that such a high number of people who would definitely benefit from unions have been convinced to oppose them.

Or, perhaps its a testament to the overreaching of unions that employers moved to right to work states, where people are eager to take the jobs, even if the jobs don't pay $72K a year for working on an assembly line.

[De Selby]

Or, perhaps its a testament to the overreaching of unions that employers moved to right to work states, where people are eager to take the jobs, even if the jobs don't pay $72K a year for working on an assembly line.

Part of the reason why that works for companies is that there are such a high number of people who are convinced unionism is bad, even though it's in their personal interests. 

[Monkeyleg]

Part of the reason why that works for companies is that there are such a high number of people who are convinced unionism is bad, even though it's in their personal interests.

In their personal interests, as in driving the cost of labor up so high that the company can't compete, and must move out of state, get government subsidies, or go bankrupt?

People naturally do what's in their best interests. If unions were good for their interests, union membership wouldn't be at record lows.

[cassandra and sara's daddy]

Part of the reason why that works for companies is that there are such a high number of people who are convinced unionism is bad, even though it's in their personal interests. 

perhaps you could share with us your own experience, however great or small that might be, with unions? i've been in 3 a shop steward in one and before and after worked in management.  after i got out my specialty was keeping unions out or getting them out if they were there.  my experience was unions created mediocrity for all.  that may be acceptable for you/some  i chaffed at it

[Perd Hapley]

Part of the reason why that works for companies is that there are such a high number of people who are convinced unionism is bad, even though it's in their personal interests. 

Enlightened self-interest is called "enlightened" for a reason. Also, I'd like to see your data on who thinks that "unionism is bad." I've rarely encountered anyone who opposed unions, per se.

[tokugawa]

 So if unions are a "market force", how  they can have an  monopoly status.  Should not the public sector unions be broken up under anti trust provisions? Can we compete with them ?

  Interestingly,  even FDR , that bastion of liberal thinking, esteemed icon of the left, most magnificent and grand of Presidents, helper of the poor and downtrodden, was ADAMANTLY opposed to public sector unions.
 
 On another issue- here is something to think about -  No Public sector worker, union or not, teacher, fireman, soldier, government contractor ,etc- no one who gets all their income from Government EVER pays one dime of tax.  We are encouraged to believe they do, because they fill out a form, and have money withheld or "owed", but the fallacy of this can be explained very simply.  If I pay  Joe $10, and require Joe to return $1 to me in tax, how much have I  paid Joe? answer- $9.  How much "tax" did Joe pay? answer-$0.  But it would create tremendous anger if people saw Joe paying no "tax", so the charade must go on.
 
 Most states do away with this in  small ways, for example few state owned vehicles pay bridge  tolls to the state, same principal, the money comes from the State, and returns to the State-it is a useless waste of time to collect a "toll". 
 

[AJ Dual]

Yep. One of the common screeds from the teachers is "WE PAY TAXES TOO!"

They may PAY taxes, but they don't actually PRODUCE any.

Big difference.

[dogmush]

On another issue- here is something to think about -  No Public sector worker, union or not, teacher, fireman, soldier, government contractor ,etc- no one who gets all their income from Government EVER pays one dime of tax.  We are encouraged to believe they do, because they fill out a form, and have money withheld or "owed", but the fallacy of this can be explained very simply.  If I pay  Joe $10, and require Joe to return $1 to me in tax, how much have I  paid Joe? answer- $9.  How much "tax" did Joe pay? answer-$0.  But it would create tremendous anger if people saw Joe paying no "tax", so the charade must go on.

They may PAY taxes, but they don't actually PRODUCE any.

Nitpick:

Really?

I don't pay property tax on my house? My gasoline and food is cheaper then yours?

One could argue (sorta, weakly) that I don't pay federal income tax because my income comes from the fed.gov in the first place, but I certainly do pay taxes.

What about defense contractors?  How much of the taxes Raytheon pays get to be real taxes?  

AJ, is your contention that no .gov worker, at any level, adds value to society, or produces something of value?  Cause that seems to be what you're saying.  

It's getting really fashionable around here to broad brush "government workers"
/nitpick

FTR, I think public sector unions are a horrible idea despite myself working under the  benefits (cough, bullshit, cough) of one

[AJ Dual]

You're reading a lot into what I said.

Unless you work for a branch of the fed.gov that actually runs a profit somehow, then no, you do not PRODUCE any taxes. That's not in any way, shape, or form the same as saying the work you do isn't needed or valuable.

And unless you have alternate private-sector income streams, every tax you pay, property, sales, gas.. is just the .gov "paying you less" in a complicated way.
The money that's taken from you though is just the .gov eating it's own tail. For a variety of reasons, mainly public relations (goober saying "HEYS DEY DON PAY NO TAXES!"), and that having the .gov do zero-sum tax calculations in your payroll up front is probably less efficient than "taxing" you like everyone else.

If you took the most saintly MOH winner, who then became a NASA astronaut and was the first human to set foot on Mars, and then went on to become POTUS who ushered in Pax Americana, world peace, and worldwide representational secular democracy... he still did not PRODUCE a dime of tax revenue, only consumed it.

In this imaginary scenario, was it a good deal though?

Sure. 

[dogmush]

I disagree twice.

First, the gov pays people for labor. Then takes some money back. Assuming fair pay for the labor, something was produced and then taxed. The tax was produced in that if the worker hadn't worked to produce something (.gov had bought it overseas for example) that tax revinue isn't there.

Secondly, the state of Florida doesn't "pay me less" in any fasion at all. They don't pay me at all. I pay them property tax and they take it.

I'll expand more when I'm not on my phone.

[tokugawa]

 the question is -#1-  where did the paycheck  originate
                        #2- to whom was the tax paid.
 
                  If the answer is "the Government" , for both questions,, no tax was paid. Money just shifted from one hand to the other.

[De Selby]

In their personal interests, as in driving the cost of labor up so high that the company can't compete, and must move out of state, get government subsidies, or go bankrupt?

People naturally do what's in their best interests. If unions were good for their interests, union membership wouldn't be at record lows.

No, people do not always naturally do what's in their best interests - witness the number of investors wiped out in the financial crisis.

There is a lot of space between "can't compete" and "minimum wage", which all profit-seeking entities would pay if they could get acceptable quality out of it.  That's the way markets work - you bargain for the best deal in terms of your own bottom line. 

You can do that through a union much more effectively than as an individual when you're trying to sell your labor. 

CS&D, again, international examples can serve well - I live in a place that is heavily unionised.  It's a hassle for business owners, but they still manage to make money, and manual laborers here can, on average, actually make enough money to buy a decent house for their families and still save for a really good retirement.

[Perd Hapley]

No, people do not always naturally do what's in their best interests - witness the number of investors wiped out in the financial crisis.

I think you may be confused. A free-market/rational self-interest view of economics doesn't posit that people are omniscient, but only that they usually do what seems best to them. Nor does it (usually) claim that people always act out of mere economic self-interest. Usually, some allowance is made for less tangible concerns. At least, that was always my understanding.


My earlier question remains.

[Balog]

Tokugawa: you are factually incorrect. When the fed.gov spends money (whether that be to buy materials, finished products, or labor) that money is no longer the fed.gov's. If I am a weapons company and I sell solely to fed.gov, do I then not pay taxes? Saying that it's fed.gov's money the entire time is not accurate.

[Matthew Carberry]

The WI Governor didn't excuse the police and fire "because they contributed to his campaign".  The large statewide police and fire unions opposed him and contributed to his opponent, only a couple local Milwaukee public safety unions contributed to him.

On the order of tens if not hundreds of thousands "against" versus a couple thou "for" in total.

[tokugawa]

Balog,      All the money the Government contractor  makes comes from the Gov.-  Returning a portion of it as a "tax", is no different than it being withheld to start with, in the form of a lower price for the product.     As far as the "tax" not belonging to the Feds, I can assure you they believe it does.