"Unions are Evil"

[tylerdurden]

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The law may have punished them, but the market destroyed them. The law doesn't mandate that their stock drop to 0.30.

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OK. Why exactly did the market react when it did? Because their crimes were being exposed? Or was it just a normal everyday market adjustment thing?

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Because the information was available.

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The market became exposed to the fact that a stock they thought was worth something was in fact worth considerably less. A fact made clear to them by a legal investigation, not because California could suddenly buy cheaper electricity thru a competitor of Enrons'.

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Yes, more information came out. I don't see where you're going with this. You're also confusing the accounting hijinx with the regulatory abuses - abuses that were enabled and encouraged by poorly-planned government regulation.

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Also, you're conflating the concepts of "government" and "law"

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That's because the government creates the law.

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But they are still seperate. There's nothing intrinsic about law that requires a government to create it. The government gives itself a monopoly on it, that's all. The fact that the concept of law prevailed and outed thugs doesn't automatically validate government.

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You can substitute "government" for "market" with no problem.

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When they suppress supply to increase demand, that's manipulating the market. When they bribe politicians to pay higher prices for a commodity readily available for less, that's manipulating government. I'm sure Enron were guilty of both, but they are different.

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Suppressing supply to increase demand is fine with me. If the market is truly free, this move will backfire and those that provide supply to meet demand will be rewarded.

These moves only work in markets that are restricted by government regulation. Such regulation encourages bribers and bribees. You get one and two or three more spring up to do the same thing. Get off the treadmill, remove the *source* of the problem - government intervention.

[superleeds]

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Because the information was available.

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Why was it available?

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Yes, more information came out. I don't see where you're going with this. You're also confusing the accounting hijinx with the regulatory abuses - abuses that were enabled and encouraged by poorly-planned government regulation.

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I think your the one in confusion. They broke the law in numerous ways. They didn't discover ingenious loopholes, they didn't use ethically grey areas to give them an advantage over their competitors and they didn't ignorantly break some obscure laws that had hardly any effect on how thay ran their business. They committed fraud, they co-erced and bullied their workforce and other investors not in the know to keep their value artificially high by giving false information about the state of the company, they manipulated certain energy markets to give an impression that a commodity that was in fact in abundance was scarce and more valuble than it was. They did this not simply by abusing government regulation because it was poorly planned and easy to abuse, they did it for money. They (and by they I mean the executives who didn't accidently but actively - and they did - persued this course of action) stole for greed and they got caught. If the law had not been in place to catch them as I think you would prefer they would all be at other companies in senior positions no doubt thinking how clever they are whilst their victims from Enron pick up the pieces. The market would not have corrected this. It would not have given Enron employees the difference in what they were told Enron shares were worth when they were railroaded into buying them and what they were really worth. The market did not as far as I am aware make any recompense to any customer whose energy supply suffered due to Enron's machinations and most importantly maybe the market certainly did not begin to evolve checks and balances to stop abuses such as this happening again. The law will, the market won't.

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But they are still seperate. There's nothing intrinsic about law that requires a government to create it.

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Yes there is. If the law isn't enforced it isn't law. Whether government is one chief or 10,000 minions in Washington matters not, they have the power to dictate and enforce what is illegal, not you or I.

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The government gives itself a monopoly on it, that's all.

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You say this as if there could be another way. I'd love to hear it. (The only way, I think, it could be otherwise is civil war which history teaches is a rather unstable and ultimately doomed form of society ordering).

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The fact that the concept of law prevailed and outed thugs doesn't automatically validate government.

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Which is not the point I'm making. It validates the law. Laws you seem to wish were not in place because you think the market would compensate. But the point is they were broken, not because they were there, not because of some kind of dare, not because Mr Lay thought it would be a bit of a giggle, but for money. Now can you please tell me why leaving everything up to purely market driven forces somehow makes these crimes less likely.

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Suppressing supply to increase demand is fine with me

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How can I take you seriously?

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If the market is truly free, this move will backfire and those that provide supply to meet demand will be rewarded

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This is just so naive

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These moves only work in markets that are restricted by government regulation. Such regulation encourages bribers and bribees. You get one and two or three more spring up to do the same thing. Get off the treadmill, remove the *source* of the problem - government intervention.

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These moves happen in markets where money is involved. It's as pure and simple as that.

[tylerdurden]

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They broke the law in numerous ways. They didn't discover ingenious loopholes, they didn't use ethically grey areas to give them an advantage over their competitors and they didn't ignorantly break some obscure laws that had hardly any effect on how thay ran their business. They committed fraud, they co-erced and bullied their workforce and other investors not in the know to keep their value artificially high by giving false information about the state of the company, they manipulated certain energy markets to give an impression that a commodity that was in fact in abundance was scarce and more valuble than it was.

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I'm still not sure what your point is. I'm not attempting to deny or excuse fraud.

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They did this not simply by abusing government regulation because it was poorly planned and easy to abuse, they did it for money. They (and by they I mean the executives who didn't accidently but actively - and they did - persued this course of action) stole for greed and they got caught. If the law had not been in place to catch them as I think you would prefer they would all be at other companies in senior positions no doubt thinking how clever they are whilst their victims from Enron pick up the pieces.

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Still not disputing anything.

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The market would not have corrected this.

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Why not? Investors don't care about frauds? Please. The market put Enron out of business.

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It would not have given Enron employees the difference in what they were told Enron shares were worth when they were railroaded into buying them and what they were really worth.

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Markets don't award damages. Arbitration does.

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The market did not as far as I am aware make any recompense to any customer whose energy supply suffered due to Enron's machinations and most importantly maybe the market certainly did not begin to evolve checks and balances to stop abuses such as this happening again. The law will, the market won't.

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Will? When? With what money? Again, you're conflating law and government. I do not advocate a system where thugs can escape responsibility for fraud. Those that are damaged by fraud should pursue damages and be compensated. Not by "the market" in general, but specifically by a free market in arbitration.

"The Market" in the general sense destroys companies that do not deliver. Arbitration decides damages. Don't fault one for not doing the job of the other.

Government, which you seem to think will "fix" this problem, firstly failed to prevent it, and secondly has not delivered any substantial compensation to those damaged. The system you are championing to "recompense" has not done so. The system which you say does not check and balance and stop abuse did exactly that. Enron is no longer pillaging, not because government stopped them, but because they went bankrupt.

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But they are still seperate. There's nothing intrinsic about law that requires a government to create it.

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Yes there is. If the law isn't enforced it isn't law.

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Agreed. Maintaining law and order requires effort.

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Whether government is one chief or 10,000 minions in Washington matters not, they have the power to dictate and enforce what is illegal, not you or I.

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That's where you're wrong.

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The government gives itself a monopoly on it, that's all.

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You say this as if there could be another way. I'd love to hear it. (The only way, I think, it could be otherwise is civil war which history teaches is a rather unstable and ultimately doomed form of society ordering).

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Civil war? You're going in the wrong direction. I want less violence, not more.

Law, just like any other service which people have a desire for can be provided by the market. Food, clothing, and shelter all all of utmost importance, but reasonable people know that these things can be provided without government interference. Why is the law any different?

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The fact that the concept of law prevailed and outed thugs doesn't automatically validate government.

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Which is not the point I'm making. It validates the law. Laws you seem to wish were not in place because you think the market would compensate. But the point is they were broken, not because they were there, not because of some kind of dare, not because Mr Lay thought it would be a bit of a giggle, but for money. Now can you please tell me why leaving everything up to purely market driven forces somehow makes these crimes less likely.

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When did I say I don't want laws in place? Fraud is a crime. When have I said otherwise? Justice, like all other services, can be efficiently provided without government interference.

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Suppressing supply to increase demand is fine with me

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How can I take you seriously?

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So if I have a bunch of firewood, and the current market price is less than I'd like to sell the wood for, I should be compelled to sell anyway? I can't voluntarily withdraw my supply? If that's the case, then I don't really own the wood.

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If the market is truly free, this move will backfire and those that provide supply to meet demand will be rewarded

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This is just so naive

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Why?

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These moves only work in markets that are restricted by government regulation. Such regulation encourages bribers and bribees. You get one and two or three more spring up to do the same thing. Get off the treadmill, remove the *source* of the problem - government intervention.

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These moves happen in markets where money is involved. It's as pure and simple as that.

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Money is involvled in all markets. If there's no government regulation, then there's no regulator to bribe, regardless of how much money is at stake.

[Hamish McBagpipe]

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Any union that represents skilled labor (like a teacher's union) is a detrimental influence that hurts the workers

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It is plain to most people that the prevalence of teaching unions has, of course, drastically increased the level of compensation and power for teachers. To a point where even I have difficulty justifying the types of contracts that teachers are getting.

Teaching unions operate in the public service, though, which is a completely different world. But, even in the private sector highly-skilled workers DO benefit greatly from being in unions. They may not be able to obtain the increases that we have seen teachers and other public service skilled and semi/non-skilled workers get but the private sector works much differently.

When bargaining with private sector employers, especially owner operated ones, I have had employers pound the table, threaten to close, and even threaten to burn the place to the ground rather than give the bargaining unit another penny. But, hell, I like these guys. At least I know where they are coming from. When I bargain with public service employers I like to call it the "ethereal" approach to industrial relations. No one really knows where the
money is coming from and there is no one to really say yes or no to anything. So, a big union like the teachers can easily exploit this kind of situation.

[Hamish McBagpipe]

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Sure, Unions support their own interests and do things like take the members dues and spend it on political contributions for things the members don't support

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This is one of the reasons that major unions have recently defected from the AFL-CIO. Dues forwarded to this umbrella organization were too often spent on causes not supported by the average dues paying union member. After all, millions of union members voted for and supported Republican positions in the last election. They are not interested in their dues being spent on bizarre left-wing causes funded by the AFL-CIO.

However, differentiate between this kind of political spending and the lobbying that many unions do which directly affects their membership. It would be hard to fault a carpenters union, for instance, for spending dues toward trying to protect and increase safety standards, education levels, etc. As you say, it is their own interest to do so to the point, if successful, that they become quite exclusionary. This is the beef that many people have with unions.

[quote Any union that represents skilled labor (like a teacher's union) is a detrimental influence that hurts the workers, and the consumers alike.

natedogg

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The real problem with teachers unions is that they work for and negotiate with a public monopoly, that is, K-12 education. A monopoly by definition is inefficient and ineffective because it has the consumer right where it wants it. Its only a question of how to divy up the profits (workers vs owners). However this is a public service so there aren't any profits, the workers are the teachers, and the owners are the school board (for which the teachers unions prop up thugs to control it), and given the entitlement syndrome of public workers, teachers feel that the confiscated school tax revenue inherently belongs to them. The teachers unions rape this system by continuously forcing higher and higher property taxes to "improve education", usually under the guise of reaching for smaller classrooms (which they dont take advantage of b/c they dont need to), and ultimately disgustingly lucrative contracts which in many cases put their capped out salaries (attained within 8 years) anywhere from 20 to 40K over the average salary of the school district itself.

Its even more sickening when they go on strike for 20 days demanding more money, at the kids' expense.

[ACPlayer]

Ah, you made my point.

A post outlining sob story of a union member is ended with how corrupt unions are.

When the story is about a corporate sob story, we get talking points.

[ACPlayer]

All prices are negotiated. The buyer simply does not have to pay the price. If a union worker at mcCormick is asking for $200 to pound in a nail -- when then you dont have to do the trade show at McCormick and the one's that do find the value in the money.

[ACPlayer]

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The point is that they would be better off without the union. Why? Because they are skilled, non-lazy workers.


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So, what is the problem with my facile argument. If they are skilled then they should quit.

[tylerdurden]

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All prices are negotiated. The buyer simply does not have to pay the price. If a union worker at mcCormick is asking for $200 to pound in a nail -- when then you dont have to do the trade show at McCormick and the one's that do find the value in the money.

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It's also entirely possible for a group to set their extortion prices higher than they would with free competition, but low enough to still make it worthwile to do business with them (when costs associated with going elsewhere are factored in). That doesn't excuse the theft.

Note this is different than charging $200 to drive a nail in a free market just because you're the only game in town. In that case, if non-union workers are allowed to move in, but simply haven't, there's no problem.

What are the chances that a group of nail-drivers that get together and fix their price at $200 will actually manage to get any business in a free market? Eventually someone will enter the market at $190 - possibly even someone inside the cartel.