Wednesday, June 21, 2006

Which Party is Better for Labor?

Although I am a card-carrying union member, I am not much of a unionist. Unions are essentially socialist organizations, and I am too much of a believer in capitalism and the free-market to be a die-hard union guy. Unions have their purpose, yet they often abuse that purpose.

So anyway, I was watching TV the other night and happened to flip through Jim Cramer's Mad Money show, and he finally was able to recommend an airline...Continental. Cramer's schtic is a bit hard to take, and I don't know enough about the markets and investing to know whether I agree with him or not, but Cramer does put on an "energetic" show. I've been unable to find a direct video link to this episode, but below is a similar episode (date unknown) where Cramer extols Walmart.

Here is a link to an article on Cramer's MM episode on Continental. The money (no pun intended) quote is...
...In addition, airlines have cut unions. Cramer believes unions are beneficial and those who are pro-workers might not like the fact that the company doesn't have employee benefits, but he said the stock is not a long-term play. Hold it only until the Open Skies initiative goes through and then sell, he advised viewers. You'll be able to get out with big money, he said....
So Cramer recommends investment in Walmart because they're doggedly fighting off any requirement (moral or otherwise) to provide employee healthcare plans, and he also recommends Continental because, in part, they've succeeded in pounding down their unions.

Cramer is a Democrat.

On the other hand, Ben Stein observed way back in 2002 that one way to "ruin American Enterprise" would be to...
Hold the managers of corporations to extremely lax standards of conduct and allow them to get off with a slap on the wrist when they betray the trust of shareholders.
[In fairness, he added that another element of our road to ruin would be to "Hold the management of labor unions to no ethical standards."] Ben more recently castigated the ethical lapses of corporate managements here. He's also on record regarding the airline pensions which are now rapidly becoming the burden of the PBGC (itself perhaps on the road to failure).
...About three years ago, UAL was "forced" to enter bankruptcy to stay alive.

This step meant that UAL could drastically cut workers' pay — and it did. Pensions were simply jettisoned and made the burden of the federal government's Pension Benefit Guaranty Corporation, which meant cuts of close to two-thirds in some pilots' pension payments. And, of course, the bankruptcy simply eliminated all of that equity in UAL that the employees had bought with their hard-earned savings.

Thus, in a series of evil events, management of UAL basically ruined the lives of the employee-owners, if that is not putting too fine a point on it, by taking away their savings, incomes and pensions....

Stein, of course, is a Republican.

Now I have been very much a "small 'l'" libertarian since the Libertarian Party went nuts after 9/11, and the practical part of me understands that both major parties are much more alike than their rhetoric might suggest, but I can't help but wonder: Why does the myth persist that the working man benefits by electing a Democrat and that the rich are typically Republicans?

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