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June 6, 2013


My followers may recall that I am an associate member of the United Steelworkers Union (though I spent most of my working life as a lawyer). One of the perks we associate (and I presume active) members get is a quarterly newsmagazine (USW@Work) which is full of factual tidbits, commentaries on the wins and losses the union has had with employers and the like. I have pulled out a few from the spring 2013 edition for further commentary, as follows:

Our magazine at page 26 reads: “California created jobs for thousands of families in spending more than $7 billion to build the new San Francisco – Oakland Bay Bridge, an architectural marvel. Unfortunately, those jobs were in China.”

I have blogged on this atrocity several months ago. Here we are, as with Wal-Mart, led to believe that the Chinese steel used in rebuilding the bridge was cheaper than that available from American steelmakers. That is propaganda and false. As with Wal-Mart, the sticker price was just the down payment. Once ALL the costs are factored in to the buy-sell equation, the Chinese steel is demonstrably more expensive. Let’s say that the American low price bid was $7.3 billion, partly because of union rather than slave wages paid in its manufacture and delivery on site. As a result of losing such a bid on steel used in this massive project, we lost $7 billion dollars worth of economic activity. We lost wages. We lost profits. We lost an upsurge in demand in the areas where American steel is manufactured. We lost what we had to pay in unemployment compensation, food stamps, bankruptcies (which adversely affect third parties as well). Merchants and shopkeepers at the situs of manufacture lost millions in depressed demand as the money that would have gone to local labor (and the companies that hire them) went to China – an export of capital that could otherwise have been employed in helping to remove our economy from the doldrums. We chose to export capital and import unemployment and recession, a strange policy choice, and one that enriched the few but is a disaster for the rest of us.

The cost per se in isolated context might have been cheaper to the bridge authority or whoever it was that was in charge of negotiations for the purchase and delivery of steel from China for the Bay Bridge project, but America comes out the big loser, and to the extent that we did not use American steel with all the consequent losses on other such public projects as a further result,  only some of which are referenced above, we are indirectly but certainly providing welfare for this taxpayer-funded project (and others as well), and to a local political authority. Thus it can be seen that all welfare is not individual or corporate in design; some (ultimately) goes to local political authority, but welfare is welfare, however you want to cut and package it, and you and I (aka America) are the victims.

There is one more morsel to report in this connection that is bad, and one that is good. The bad report is that the new eastern span of the Bay Bridge is scheduled to open to traffic later this year, but at an additional cost (so far) of some $300 million. Let’s hear it for more outsourcing to slave labor states!

The good report is that both our unions and our domestic American steel manufacturers have been energized by this appalling  use of taxpayer money to fund public projects with foreign (read slave-made) labor and are pushing a Buy America bill which would, among other things, slow or stop sending taxpayer dollars overseas and instead set out a requirement that all investments in highway, bridge, public transit, rail and aviation infrastructure and equipment to ensure that all of the steel, iron and manufactured goods used in these projects are produced in the United States. I whole-heartedly favor this legislation in the making; it will be good for America.

To the hue and cry from Wall Street and its minions that we are shutting down competition and giving labor a costly monopoly which will result in higher prices, I offer this: there is plenty of competition within the American business sector. Expect competitive and non-collusive bidding. As for monopoly, someone tell me the last time Chinese bridge-builders offered to have American steelmakers bid on steel and other materials for their bridges and other such public  improvements. Viewed from this angle, it is Wall Street and its multinationals who wish to continue (by low-labor design) Chinese monopoly and anti-free trade practices, free trade practices they say they worship. They don’t. Wall Street favors whatever practices that impress quarterly analysts and elevate Dow averages – the best interests of both China and America are no part of its all-consuming philosophy of greed.

I will get to the overpaid executive problems, ALEC and other such items of interest noted in our union magazine in Part II of this essay. Stay tuned.  GERALD  E


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