Gulf Oil Jobs Crisis – by Decree

 Energy, Government, Labor, Markets, Oil, Transportation
Jun 042010
 

The Last Time, it Was OPEC; Now it's Washington

US Historical Oil & Gas Production Sites

If you’ve been following the oil spill, you know the president has declared a six-month moratorium on offshore oil drilling.  This is in addition to the existing ban on drilling closer to shore, as well as exploration and drilling on most land-based applications.  Jobs will be lost by the thousands, and gasoline prices will soar.  As reported in the Inside Louisiana News.com blog, Governor Jindal of Louisiana wrote an alarmed letter regarding the job losses, here.

Proof that the economic damage has already begun is illustrated by the invoking of force majeur clauses to cancel existing drilling contracts and ceasing activity until the end of the moratorium, as reported here, on Tom Fowler’s Energy blog.  I thought the following comment in the thread that followed was indicative of what we can anticipate:

I have to wonder if President Obama and his advisors have thought thru the ripple effects of halting 33 projects in the Gulf of Mexico and putting a 6-month stop on new drilling. Employees of oil and gas operators; employees of drilling rig contractors; employees of multiple oil and gas service companies; employees of crew boat companies; employees of helicopter service companies; vendors who supply fuel and groceries, etc. to rigs….and I’m sure there are more that just haven’t come to mind, who will lose work in a time when, on another hand, President Obama is promoting increased employment and healing the economy. His decision will wreak havoc on Texas and Louisiana economies with ripple effects beyond that.

Finally, a little food for thought regarding the importance of oil drilling to our livelihoods.  Most of America needs a car to get to work.  They also do not have public transportation as a substitute.  Not everyone has the year-round weather, safe-paths, or age and health related ability to ride a bike to work.  We can’t know how much oil we have domestically until we stop acting as if we can simply will our dependency away.  The poor will suffer the most, and the middle-class our administration claims to love and protect – will become poor.  Some will conclude that this is all for the good of the country, the planet, humanity.  Draw your own conclusions in this short interview with the former President of Shell Oil.    Maybe the thought of $6 to $8 gasoline could be your motivation.

(The video that originally accompanied the article made the interviewers look a bit foolish, so they killed it and substituted another part of the interview in which Hofmeister just talks about his book.  He is just barely allowed to make his points in this tendentious piece on Yahoo Finance’s Tech Ticker.)

The above map at the US Geological Survey is a humongous, size-adjustable pdf map with color-coded explanation if you wish to visit, here.

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The Government-Union Hustle

 Government, Labor
Mar 182010
 

Your tax dollars

I posted on this on February, under “Are Government Unions Necessary?”  That, admittedly, was a bit of a rant – even though mostly correct.  Today, though, we have a piece we are linking to written by Chris Edwards, Director of Tax Policy Studies, Cato Institute.  (It’s a Libertarian think tank, if  that sort of thing bothers you.)  It looks like a nice piece of research that, without the Tables, is two standard pages long.  It also has 17 footnotes so you can pursue the matter further if so inclined.

As for myself, quite aside from the outrageous level of guaranteed benefits and low qualifying thresholds, I hold to the notion there is no philosophical justification for having our fellow citizens – employed by us – joining unions in order to protect themselves (from…what, exactly?) Things really get out of hand when the two parties are negotiating lavish early retirement benefits and are really in bed together.  Also, Americans consider unions to be sacrosanct – bad idea the unions count on.  Workers are all free to join professional associations, instead.    Here’s a short excerpt.  Please go to the Cato Site and read the rest.

Prior to the 1960s, unions represented less than 15 percent of the state and local workforce.  At the time, courts generally held that public-sector workers did not have the same union privileges that private workers had under the 1935 Wagner Act, such as collective bargaining.
That changed during the 1960s and 1970s, as a flood of pro-union laws in dozens of states triggered a dramatic rise in public-sector unionism. Many states passed laws that encouraged or required collective bargaining in the public sector, and states also passed laws to impose compulsory union dues and fees on government workers. Princeton University’s Henry Farber has documented the rise in public-sector unionism since the 1950s. He found that the number of states allowing collective bargaining for public-sector workers jumped from just one in 1955 to 10 by 1965. New York City granted collective bargaining privileges to most city workers in 1958.
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Senate News Flash – Boxer/Webb on Windfall Bonus Tax

 Government, Labor
Mar 032010
 

Early this afternoon, Senator Barbara Boxer (D-Calif.) interrupted her campaign to raise energy prices on all Americans through the Cap and Trade program to step onto the Senate floor with a new proposal unrelated to Science.  (Oops! The other one is unrelated to science, too.)  A Chairman of the Senate Commerce, Science and Transportation Committee, she wears many hats, and today she traded Science for Commerce.  Together with Senator Jim Webb (D-Va.) of the Judiciary Committee, she’s co-sponsored the “Taxpayer ‘Fairness’ Act.”  This is a windfall tax on bonuses received by

anyone who works for a company that received TARP funds and gets a bonus of over $400,000.  Half of anything over that would go to the Treasury to “help reduce the deficit.”

Senators Jim Webb (D-VA) and Barbara Boxer (D-CA) introduced the Taxpayer Fairness Act, legislation that would recoup excessive bonuses paid by Wall Street banks and other firms that benefited from billions of taxpayer dollars in 2009.
TAXPAYER FAIRNESS ACT
In February 2009, Senators Jim Webb (D-VA) and Barbara Boxer (D-CA) introduced the Taxpayer Fairness Act, legislation that would recoup excessive bonuses paid by Wall Street banks and other firms that benefited from billions of taxpayer dollars in 2009. The revenues generated would be used for deficit reduction.

The bill would impose a 50 percent excise tax on the bonuses of employees at these firms that exceeded $400,000 in 2009. Any employee who received a bonus larger than $400,000 – the salary of the President of the United States – would have to pay a 50 percent tax on the portion of the bonus over $400,000. The legislation would apply only to Wall Street institutions that received more than $5 billion from the Troubled Asset Relief Program (TARP).

“We believe this is a fair and reasonable approach. It offers equity and a level of fairness to the American taxpayers who bailed these companies out,” said Senator Webb. “This is not class warfare. This is not something that’s going to run the gamut of all executive compensation and bonuses. This is a one shot deal. This is a tax on excessive bonuses of TARP recipients that received more than 5 billion dollars from the American taxpayer in 2009.”

“In September 2008, Secretary Paulson and Chairman Bernanke told the Congress that, without a $700 billion investment into the TARP program to assist our major financial institutions, our world was going to go into cataclysmic economic freefall, Webb continued. “Many of us supported that program with the understanding that, if the American taxpayers were putting $700 billion into the system in order to rescue these financial institutions, the American taxpayers would be able to get a return on their investment as well.”

In 2008 and 2009, the financial sector received unprecedented aid from taxpayers. In addition to the $700 billion TARP, there were 50 separate Federal programs offering $23 trillion in loans, grants, or asset guarantees to the financial sector, according to the nonpartisan Special Inspector General for the TARP (SIGTARP.)

MATERIALS & RESOURCES:

Just a couple of points:  The government doesn’t set compensation for the private sector.  A lot of the companies took TARP money at the insistence of the government.  In the financial sector, “bonus” is not used in the conventional meaning of the word; that is, it is not awarded for doing something out of the ordinary for which you should be rewarded.  Bonuses, in most cases, are an unspecified, but normal part of the compensation package whose amount varies according to the earnings of the firm or the unit involved.  It’s a custom left over from the days when most wall street firms were partnerships.

To confiscate these earnings, by government fiat, is to take that employees expected compensation.  Boxer and Webb are pitching this as only fair to the taxpayer who bailed firms that “wouldn’t now exist without taxpayer money.  More importantly, the money lent by the taxpayers was lent to the firms, not the employees. The employees, although benefiting by continued employment are, nevertheless,  not liable for their employer’s debts. (Many of the TARP debts have already been repaid, with interest - by the firms, not the employees.)  Funny that both Boxer and Webb should emphasize – without being asked – that this isn’t “class warfare.” You decide.

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Are Government Unions Necessary?

 Government, Labor
Feb 142010
 

Collective Bargaining with Themselves!

Here’s an idea:  Let’s unionize all the lawyers; in fact, there no longer seems to be any reason why we shouldn’t make union membership mandatory and automatic for any American who wishes to work.  We already have a physicians’ union and teachers’ unions.  Nearly everyone employed by the cruel and oppressive American taxpayer has defensively joined a union.  As a retiree, I don’t belong to a union, but I’m thinking of starting one so that I can guarantee my social Security and Medicare benefits against the possibility of some arbitrary change…like insolvency.

And, let’s face it; that’s what unionism has come to.  Not wages and hours, break schedules and holidays – nope, it’s about guaranteed income for life.  We’ve slowly moved from the employment fairness paradigm to the employee extortion paradigm.  Which may be a little overstated, since in most cases, the employees are exploited worse by the unions than they ever could have been by the employers.

How did this happen?  Where was the tipping point?  States, counties and municipalities are going broke while still increasing employment, raising compensation and lavishing benefits for which there is no realistic funding.  The result is an undeclared war on the taxpayer (the only source of funds).

Work for their Retirement

What’s worse, there no longer seems to be a distinguishable difference between the unions and the Democratic Party.  Easy government classification of someone’s job as belonging to an existing union contract means any new elections are avoided and thousands of workers suddenly have a new payroll deduction and work rules.  Mega-dollars find their way to the unions who, in their gratitude, pass some along to the politicians who were astute enough to have arranged the classification in the first place.  This process helps to ensure incumbency for both the politicians and the union officials.

And that’s without card check, which would remove the pesky requirement for a secret ballot and guarantee arbitration when a contract is not approved.  If passed by Congress, experts acknowledge it would be the Democrats’ payoff for the successful 2008 election.  And for the future work in getting out the Democratic vote, keeping dissenters from disturbing Democrats meetings, and disrupting gatherings, such as the Tea Parties, to discourage the spread of any coherent opposition to Democrat Party rule.

So, whether it’s taxes to the government, or dues to the unions, we are seeing a decoupling of duty from collections.  At some point, both seem to have realized that they could get paid for working for the general good while making certain to only work for whatever keeps them in the collections business.

Which brings us to:

FREQUENTLY UNASKED QUESTIONS

  • Why should highly-trained white collar professionals belong to unions?
  • Government employees work for those officials who are electorally answerable to us, the taxpayers.  Why should they be allowed union membership?
  • Why is it legal for you to be drafted into union membership without either your knowledge or consent, and dues deducted from your paycheck?
  • Why should it be legal for a union to give your money to a political party you do not support?
  • If it is illegal for a government employee to engage in political activity (such as canvassing a neighborhood for votes) as a condition of employment, why should that same person be allowed the same activity as a union member?

We look forward to your thoughtful comments.

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