To Full Retard, and Beyond!
So the ILA strike settled yesterday–almost immediately after I posted about it. (You can thank me later).
Well, sort of settled–more like it was punted past the election (imagine that): the strike is merely suspended until January 15.
Great news! Well, not when you consider how this oh-so-politically convenient outcome was achieved: lawfare rather than the law (specifically the Taft-Hartley law).
The Biden administration threatened USMX, the consortium of carriers, terminal operators, and port authorities that negotiates with the longshoreman with an investigation of “any price gouging activity that benefits foreign ocean carriers, including those on the USMX board.”
There they go with the “price gouging” bullshit again. And using the threat of an investigation of such ill-defined conduct to dragoon the carriers, terminals, and ports to capitulate to union demands.
Presumably the administration’s brushback pitch was intended to signal to the USMX that they could not pass on the inevitably higher costs they incur as a result of any strike to customers through surcharges. Thus, the carriers would be forced to eat demurrage and the like.
It is clear whose side the administration took:
It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback.
It is important to note that the ILA’s demands are not just about wages. The ILA also wants to prohibit automation of ports. This despite the fact that US ports are among the world’s least efficient. Actually, it’s probably because US ports are among the world’s least efficient: they are less efficient because they are far less automated.
The inefficiency of US ports and supercompetitive wages paid to longshoremen are a tax on trade, and a tax that falls broadly across the entire US economy in order to benefit an extremely small (25,000 actual workers on the docks on the East Coast) constituency. This tax is paid in the form of higher prices for imported goods and lower wages for workers: the tax reduces the derived demand for labor services by increasing the cost of complementary inputs (e.g., imported parts).
It is therefore a travesty to claim that supporting the ILA is to support labor generally. In fact, the exact opposite is the case. The ILA membership is feasting, and everybody else is paying the bill.
The potentially extortionate power of transportation union, and the impact of the exercise of this power on the nation in rail strikes in particular, is precisely why the national emergency provisions of Taft-Hartley exist. But Biden (or whoever decides for Biden) chose not to use it. He says “I don’t believe in Taft-Hartley.” Harris apparently agrees. And Trump can only blurt out: “American workers should be able to negotiate for better wages, especially since the shipping companies are mostly foreign flag vessels, including the largest consortium ONE [a Singapore-based consortium of Japanese carriers Nippon Yusen Kaisha, Mitsui O.S.K. Lines, and K Line].” A statement that illustrates yet again Trump’s dim economic understanding.
(I also note that US flag shipping has always been an also-ran. In the 19th and early-20th centuries European–especially British–carriers dominated. In recent decades Europeans (e.g., Maersk, MSC) have continued to play a primary role, and have been joined by Asian ones (Japanese, Chinese, and Taiwanese in particular.). J.P. Morgan tried to play his consolidation game to create a major US liner firm in the early-1900s but that failed miserably. )
In sum, a collection of full retards posing as friends of the working man, who are anything but.
Rent seeking par excellence.
Comment by Andrew Stanton — October 5, 2024 @ 9:07 am
I don’t particularly disagree with any of the points made, but I would like to point out that if it were RICH Americans behaving this way, the American political right would be saying “Well, this is just the free market at work. If it were economically inefficient, then somebody would open their own competing ports. The fact that they don’t do so speaks volumes”. Of course, then somebody might point out the barriers to entry in that market, to which I personally would respond, yes, that is in-fact exactly the point.
Comment by HibernoFrog — October 7, 2024 @ 1:58 am
Hiberno – it seems to me that the only way the rich could “act in this way” (shut down critical infrastructure to extort higher returns from a captive audience) is if some participant or consortium (or hidden cartel) owned enough of the ports to impede shipping on a large scale. In that case, the left (and possibly some of the thinking right) would be aghast that we had allowed monopoly power in an essential activity – and would advocate for a break-up. So it is with ports (although the government or a government agency is the owner): if they are vital services then they should be subject to compulsion to perform those services. If they are not vital enough to justify interference in collective bargaining, why the fuck does the government own them? Sell them to competing interests, outlaw simultaneous labour contract expiry, and watch the owners like a hawk for any attempt to collude. Maybe sell them on 10 or 20 year leases, to ensure turnover in ownership?
Comment by dcardno — October 7, 2024 @ 9:44 pm
@dcardno: The wealthy acting this way is evident all over the US economy, where local, regional or (rarely) national near-monopolies are able to extract higher prices, pay lower wages or force lower quality products than a truly competitive market would allow. Hospitals, air ambulance services, internet (outside of relatively high density urban areas)… are just the ones that pop into my head right now. And there is an ever-increasing value of company mergers every year, many going through without any scrutiny at all – I’m sure some are economically efficient, but unavoidably it concentrates the market and unavoidably that will eventually lead to reduced competition. But suddenly when a union does it, THEN it’s a problem (and indeed it IS a problem, but this one gets all the attention when far more economically damaging targets go unchallenged, because they are more diffuse or have political influence).
But otherwise, I agree with you. Provided that regulation prevents private or foreign interests from acting against the best interest of the US, why not privatise the ports (or as you say, privatise at least their operations, if not the underlying asset). US regulation, though, only seems to have two modes: “Noting” and “Prevent any activity of any sort”… so I would be pessimistic as to the outcome of your sensible proposal.
Comment by HibernoFrog — October 8, 2024 @ 6:12 am