This has been a bad week for business, thanks to the Obama administration — and it’s only Wednesday. When President Obama rolls out his job-creation plan next week, we should evaluate his lofty rhetoric in the context of what his administration has actually accomplished.
The week started off on a bad note when the National Labor Relations Board decided all of a sudden that employers should be forced to advertise for unions. Did Congress secretly pass a law mandating the change? Of course not — it just seemed like a good idea for the administration to please union leaders in the run-up to next November.
Today, the Department of Justice announced that it will attempt to block AT&T’s proposed merger with T-Mobile. Markets, responding to a rash of economic news and DOJ action, fell across the board. Not surprisingly, AT&T was the biggest loser, shedding 4.6 percent and dragging the S&P index down with it. To some, the DOJ’s move will resurrect memories of the Clinton administration’s attack on Microsoft, a company that still hasn’t fully recovered from its generation-long fight with regulators. Google, like AT&T, is also in the crosshairs of bureaucrats. For companies looking to expand and hire, the DOJ has served notice that success can bring ample demands from the government.
No word on how any jobs will be created by the NLRB’s move or the DOJ’s action to block the proposed merger.
In the end, the president loves to tout his “historic” efforts on regulatory reform and job creation. He’ll even call together a joint session of Congress to speak about economic growth. When he’s not speaking, however, he’s busy blocking mergers, pleasing unions, and imposing at least $109 billion in new regulatory burdens (according to his recent letter to Speaker Boehner). The fact is, when given the choice, the president almost always sides against pro-growth policies.
This week’s measures might please ideological purists within the president’s party, but they won’t create jobs and they won’t translate into the broader economic growth he so desperately needs for his reelection bid.
If someone were TRYING to ruin the economy, what would he do differently from Massive Genius?
Reply to this commentLinkReport AbuseWhile one could, I suppose, argue against the DOJ action on economic freedom grounds, I would be fascinated to hear anyone state how consumers will not pay more for service if ATT buys Tmobile. Anyone believe this is anything other than an attempt to gain pricing power? And I'll note that the economic freedom argument is problematic when the entrance to the industry is precluded to any company that does not have spectrum rights, as it is here. We conservatives would do well to remember that the main case for many economic policies from free trade to lower regulation is the benefit to consumers; the benefit to business is not an end to itself. So jeers to the NLRB, but hearty cheers to the DOJ.
Reply to this commentLinkReport AbuseMaybe he called the joint session of Congress to announce he is not running for re-election or is resigning. That would be a huge boost for jobs and the economy. Look on the bright side.
Reply to this commentLinkReport AbuseMike, have you been self-medicating again?
Reply to this commentLinkReport AbuseDouglas:
I am as conservative as the next guy/gal around, but your hyperbole is a little much here. "employers should be forced to advertise for unions" - really, NLRB decision was bad, but was it that bad!
"Markets, responding to a rash of economic news and DOJ action, fell across the board." - Uh, no the markets didn't. All stock market averages were up for the day.
As a free-marketer, I have plenty of problems with ATT buying TMob. It would create a virtual monopoly for them in the mobile space, and I think ATT claim that it would add US jobs is on net a bunch of BS. Basically T-Mobile is a lower cost/lower coverage mobile carrier than ATT, but for the price I like T-Mobile. I think a lot of T-Mobile customers would agree!
Reply to this commentLinkReport AbusePeople H*A*T*E* AT&T. Any company that can generate that much badwill will not get one crocodile tear from me.
Reply to this commentLinkReport AbuseThis T-Mobile customer is ecstatic that the DOJ did this. An AT&T - T-Mobile merger would mean the end of any meaningful competition in wireless services in the US, and preventing monopolies or effective monopolies is most certainly a governmental duty in a free market.
Reply to this commentLinkReport AbuseIf Microsoft hadn't faced anti-trust pressure in the 90s, then over the last decade they would have had a much freer hand to leverage their desktop monopoly to tie Web browsing and search into their own products, suppressing competition from Google and later Apple and Facebook and others.
Of course, we can never know for sure how things would have turned out without anti-trust action, but we now have three or four highly profitable, highly innovative industry giants competing hard, a much better situation than the 90s where it was Microsoft smothering one upstart after another.
Reply to this commentLinkReport AbuseThe small detail that Microsoft was boldly guilty of predatory anticompetitve behavior is too easily brushed aside. Microsoft didn't compete in the free market, they subverted it. If they haven't "fully recovered" from the case, it is because their products are still only good enough and spurred by inertia that they can no longer illegally maintain.
Reply to this commentLinkReport AbuseNeither of you know what you are talking about. The only "smothering" that Microsoft did was to charge below market price for their software in order to get market share. Every single remedy introduced by the courts has forced prices up.
Another thing that Microsoft software did was lower the bar for enterpreneurs to start software companies. Every single remedy has raised the bar, making the software industry more hostile to small businesses and more conducive to large companies such as Adobe and Computer Associates.
The Justice Department attack on Microsoft was anti-intellectual, anti-consumer, and anti-small business. Microsoft shareholders lost billions of dollars in value and large companies such as Adobe made fortunes that they did not earn.
The fact that the government of my own country perpetrated this injustice makes me sick to my stomach.
Reply to this commentLinkReport AbuseAT&T didn't come up with the vigorish needed to get a deal through this Administration. Let's face it, they just offered to bring a call center back to the states with thousands of jobs "created". But a job is money you have to work for. What were they giving the poor and downtrodden that "the man" has been keeping down? Now, if they had been smart they would have kept the call centers overseas and offered to give free cell phones to poor folks in Chicago, Detroiit, Philly (oh wait, there is already a plan for Philly), Washington DC, etc. Pick the "urban" areas and they would have gotten their deal. That's what it took for the cable/internet provider a couple of months ago (I believe it was Comcast but not sure).
Reply to this commentLinkReport AbuseThe Microsoft attack was a travesty of justice. I remain shocked that Bill Gates remained sane, I barely did.
Reply to this commentLinkReport Abuse"the Department of Justice announced that it will attempt to block AT&T’s proposed merger with T-Mobile."
Whoa, whoa, whoa! I think the Gibson Guitar raid was way worse than the attempted prevention of the creation of the ATTVERIZON cell duopoly.
Reply to this commentLinkReport AbusePerhaps Mr. Eakin can explain why less competition that would result from the ATT-T-Mobile merger is beneficial to the economy and the "free" market. But no, all we hear is the partisan drumbeat that anything this administration does is specifically intended to destroy the economy.
Reply to this commentLinkReport Abuse"Bad for a big business" might not be the same thing as bad for business.
There's nothing conservative about companies getting so bloated that they're too big to fail, too big to be accountable to the market and too reliant on lining pressure groups' pockets. It was hilarious to see AT&T's ad campaign of promises and castles in the air as it tried to astroturf popular support for this takeover. Improving service quality is the kind of hard work a smart business does -before- it needs customers' support.
I also find it hard to believe that creating worker awareness of their union rights is going to cause business any headaches. Why wouldn't American workers, who are among the best-educated, hardest-working and most compliant in the world, not be able to process that information in a mature fashion?
If you don't want the bureaucrats to blunder in, the savvy way to go is to train rogue managers before they cause bad publicity. Stop falsely telling workers that "only hourly, blue-collar employees" have the right to bargain as a group. Stop requiring workers to sign unenforceable contracts that claim their salary information is secret. Stop interfering with others' freedom of contract by bullying suppliers into not hiring your employees (whom you classified as "at-will," remember?).
While FDR-era unions are hopelessly corrupt and outdated, professional workers of today have a chance to reinvent the idea of bargaining as a group. There has never been a better time - due to the recession, the percentage of low-status workers who have the training, intelligence and qualifications to scrutinize management is at its highest level in decades.
Reply to this commentLinkReport AbuseYour advice is superb. Workers with valuable skills will never unionize because they can negotiate better deals on their own. So you should help your workers become valuable--then, in order to keep them, you have to pay them what they are worth. Companies that are managed this way can ignore collective barganing issues.
Reply to this commentLinkReport Abuse1. The NLRB rule you mention (actually issued last Thursday) is as benign as it gets. Employers are now required to post a piece of paper on the wall advising employees of their unionization rights under the 1935 NLRA. If someone HAS a right but doesn't KNOW they have it, they might as well not have it at all. That's what this rule is designed to avoid.
Though DHE attempts to paint this rule as precipitous and related to the election, the NLRB has been contemplating this rule since December of last year and took over 7000 comments on it.
External Link
2. DHE takes it as a given that the merger between AT&T and T-Mobile will result in MORE jobs, but this is not at all clear. In fact, there are reports the T-Mobile has been preparing to lay off 20K people after the merger. This just makes sense, as why would a single company need two sets of HR, finance, etc? AT&T claims it's going to be spending lots of money on upgrading infrastructure, which is fine, but would that money be spent even if the merger wasn't happening? And money spent on cell towers doesn't guarantee that as many employees will be needed.
I'm not sure what the answer to this is, but it deserves a much more in-depth treatment than "What's good for GM is good for America."
More info on the merger and what it might mean for jobs and the economy here:
External Link
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