The Class Struggle According to Donald Trump

the fact that a worker’s wealth and well-being is much more dependent upon her employer than the employer is on a given worker tilts things in the employer’s favor.

.. Two trends demonstrate the decline of labor and the ascent of business. Since 1979, after-tax corporate profits as a share of gross domestic product have grown by 22.8 percent, while the share of nonfarm business sector income going to labor has dropped by 10.3 percent.

The decline in worker bargaining power in the United States is the cumulative effect of numerous small and large changes over recent decades reaching into almost every area of law and policy. This combines with a decline in the enforcement of existing laws that could protect workers’ bargaining power — laws protecting unions, laws against wage theft, nondiscrimination laws, and more.

.. Among these changes is the requirement that employees sign what are known as “noncompete” and “no-raid” agreements, both of which restrict workers’ ability to extract pay hikes by threatening to take similar jobs at competing companies.

.. “less than half of workers who have non-competes also report possessing trade secrets.”

When entry-level workers at fast food restaurants are asked to sign two-year non-competes, it becomes less plausible that trade secrets are always the primary motivation for such agreements.

.. The treasury report estimated that 30 million American workers have signed noncompete agreements.

.. 94 percent of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.

The growing emphasis on “shareholder value” has provided additional justification for all of these anti-worker developments.

.. “the shareholder value movement starting in the late 1980s and now institutionalized through industry analysts” was crucially important in the devaluation of employees:

.. Accounting in business is mainly about costs. Finance people hate fixed costs because of the challenges they raise to share price valuation when there is uncertainty, and the biggest fixed costs are labor. Simply moving the same labor costs from employees to outside staffing companies moves it from one part of the accounting ledger to another and makes analysts happier.

This mentality, in turn, encourages “the use of temps and contractors” to fill high-wage jobs because “that way the employer doesn’t have to raise wages for all their employees.”

.. Companies could outsource work to areas with cheaper labor and less of a union presence. This both weakened the union and ramped up competitive pressure on the companies that were unionized. The result was fewer unions.

.. In 2017, 6.5 percent of the private sector work force was unionized, down from 35 percent in 1955.

.. The contemporary weakness of organized labor and the threatened status of employees has roots in the breakdown in the 1970s of the postwar capital-labor accord — what A.H. Raskin, the legendary labor reporter for The Times, called a “live-and-let-live relationship” that held sway for 30 years.

.. First, they would alter antitrust enforcement to require consideration of the likely effect of mergers on concentration in the labor market, in order to prevent “too high a risk of wage suppression.”

.. Second, Krueger and Posner would support legislation making noncompete agreements “uniformly unenforceable and banned if they govern a worker who earns less than the median wage in her state.”

.. ban no-poaching arrangements altogether:

We propose a per se rule against no-poaching agreements regardless of whether they are used outside or within franchises. In other words, no-poaching agreements would be considered illegal regardless of the circumstances of their use.

.. In the 2016 election, Trump profited from the conviction of rural and working-class voters that they were on a downward trajectory. If anything, Trump appears to be gambling that letting those voters’ lives continue to languish will work to his advantage in 2020.

.. His administration has turned the executive branch, the federal courts and the regulatory agencies into the sworn enemy of workers, organized and unorganized. Trump is indisputably indifferent to the plight of anyone in the bottom half of the income distribution:

  • look at his appointments,
  • look at his record in office,
  • look back at his business career and
  • look at the man himself.

The best way to tell if someone is a conservative

Taft, whom Rosen calls “the only president to approach the office in constitutional terms above all.”

Wilson was the first president to criticize the American founding, particularly for the separation of powers that crimps presidential supremacy. Roosevelt believed that presidents are free to do whatever the Constitution does not forbid. Taft’s constitutional modesty held that presidents should exercise only powers explicitly granted by the document.

.. Romanticizers of Roosevelt ignore his belief that no moral equivalent of war could be as invigorating as the real thing

.. Taft“extended federal environmental protection to more land than Roosevelt” — and he created 10 national parks — “and brought more antitrust suits in one term than Roosevelt brought in nearly two.”

.. Roosevelt thought that, in industry, big was beautiful (because efficiently Darwinian) if big government supervised it.

.. Taft unsuccessfully resisted President William McKinley’s entreaties that he become governor of the Philippines (“I have never approved of keeping the Philippines”).
.. In 1912, Roosevelt’s “New Nationalism” promised populism rampant and a plebiscitary presidency untethered from constitutional inhibitions: “I don’t think that any harm comes from the concentration of powers in one man’s hands.”
.. And “I believe in pure democracy,” the purity being unmediated, unfiltered public opinion empowered even to overturn state court decisions by referendums.
.. The 1912 strife between conservative and progressive-populist Republicans simmered until Ronald Reagan’s election in 1980 sealed conservatism’s ascendancy in the party.

Amazon enters correction as Trump said to eye tax change

The president has a long history of railing against the way the e-commerce behemoth is taxed. Trump has accused Bezos of using The Washington Post as a tax shelter for Amazon. He has said that if the tech company ever had to pay fair taxes, “its stock would crash.” And he has alleged that Amazon is doing damage to the tax-paying public. He has also claimed that Bezos uses The Post to curry political favor with politicians so he can continue to avoid paying taxes.

During an interview with Fox News last May, Trump suggested Amazon had “a huge antitrust problem.”

.. U.S. Commerce Secretary Wilbur Ross said during an interview with FOX Business last August that Amazon had violated no antitrust laws.

Tim Harford: The case for ending Amazon’s dominance

Two economists, Germán Gutiérrez and Thomas Philippon, have argued that corporate America is underinvesting. One reason is that companies are impatiently funnelling cash to investors and executives rather than take a long-term view.

If that is a worrisome state of affairs — and it should be — then Amazon is the shining counterexample. The online retailer’s strategy is driven not by short-term profit but by investment, innovation and growth. If only there were a few more companies like Amazon, capitalism would be in a happier spot.

.. Marc Levinson’s history of container shipping, The Box (UK) (US), describes Malcom McLean — the entrepreneur behind containerisation, a risk-taking visionary reminiscent of Amazon’s founder Jeff Bezos. When McLean tried to expand his operations, one of his largest obstacles was the Interstate Commerce Commission in the US, which regulated US railways from 1887 and interstate trucking from 1935.

The ICC, writes Mr Levinson, had to approve each new route, every new commodity and any new price schedule. When McLean wanted to start a trucking route at a low price, he had to hire lawyers and argue his case at the ICC, while his competitors protested bitterly — “unfair and destructive”, said the railways. He did not always get his way.

..

There are two schools of thought. One is to focus on consumers’ interest in quality, variety and price. This has been the standard approach in US antitrust policy for several decades. Since Amazon makes slim profits and charges low prices, it raises few antitrust questions.

The alternative view — which harks back to an earlier era of antitrust during which Standard Oil and later AT&T were broken up — argues that competition is inherently good even if it is hard to quantify a benefit to consumers and that society should be wary of large or dominant companies even if their behaviour seems benign

..  Donald Trump’s history of publicly attacking Mr Bezos is worth pondering too: do we really want the US government to have more discretion as to who is targeted, and why? We should not wish to return to a world in which a plucky new competitor must beg regulators — over the objections of incumbents — for permission to cut prices.