The United Auto Workers is locked in a bitter labor dispute...against its employees?

[Detroitnerd]

Basically, yes. If you weren't in compliance with the CRA you'd get hit with fines by the justice department, or the CEO of the bank would get dragged in front of congress and grilled by Barney Frank and Nancy Pelosi for depriving poor people of their right to mortgages. ACORN used to shake down banks for donations in exchange for not filing complaints about non-compliance with CRA, which would screw with mergers and other regulated activity.

CRA wasn't entirely responsible for the subprime crisis, of course. However, you had the federal government leaning on banks to make subprime loans, Fannie and Freddie implicitly stating they'd back any subprime mortgages issued, and the fed cranking rates down making profitability on regular loans nearly nonexistent.

You are selectively taking a few facts and weaving them into what I presume is a self-serving mythology you would like to promulgate. As to the other people reading this, please watch "Inside Job" -- which explains what happened very clearly ... without this mythological treatment of how Wall Street turned predatory lending into a bonanza and left us holding the tab...

[313WX]

At this point, I think unions should resign themselves to negotiating for safe working conditions, fair employee treatment, protecting against abuse of power. But trying to negotiate about wages or work requirements??

Sure, lets go back to working 20 cents per hour and working 60 hour work weeks.

[corktownyuppie]

And "a banker" is an amorphous term. Are you an investment banker? This industry and its proxies are almost nonexistent in Michigan. Investment banking is very highly concentrated, mostly in NYC and London.

Without giving away my background, I will tell you that I'm on the retail side of investment banking working on the client side. My Friday lunch was with someone on the private equity side doing mergers & acquisition, specifically on the small- to mid-cap investment banking side. There is still plenty of M&A and corporate finance work here in Michigan. No, it's not to the same level of NYC. We're not going to see some Michigan outfit take Facebook public. But the money is certainly here and doing well.

There's still a financial industry in Michigan and after a rough go in the late 2000s, starting to grow again.

[Detroitnerd]

Sure, lets go back to working 20 cents per hour and working 60 hour work weeks.

That's where the folks in charge of global capitalism would like to take us. Only the rich may enter the 21st century; for the rest of us, it's back to the 19th century.

[JBMcB]

You are selectively taking a few facts and weaving them into what I presume is a self-serving mythology you would like to promulgate.

No, I read blogs from various economists and listen to economics podcasts [[Planet Money from NPR is particularly good) I don't get my economic analysis from watching movies.

I'm not saying the banks and mortgage companies were blameless. A lot of those in charge should be out of a job right now. Some should probably be in jail. However, when assigning blame, they were ultimately doing exactly what the government was pressuring them to do.

[Detroitnerd]

No, I read blogs from various economists and listen to economics podcasts [[Planet Money from NPR is particularly good) I don't get my economic analysis from watching movies.

I think there is a slight difference between a movie [[ooh, it's a talkie, too!) and an Academy Award-winning documentary. Adopt a dismissive tone much?

I'm not saying the banks and mortgage companies were blameless. A lot of those in charge should be out of a job right now. Some should probably be in jail. However, when assigning blame, they were ultimately doing exactly what the government was pressuring them to do.

The government they bought? The government peopled with their insiders? I think we're going to have to roll out an industrial-grade ball of salt when you post about banking, JBMcB...

[JBMcB]

I think there is a slight difference between a movie [[ooh, it's a talkie, too!) and an Academy Award-winning documentary. Adopt a dismissive tone much?

If you think all the various economic, regulatory and social factors that went in to the meltdown can be effectively conveyed and analyzed in 90 minutes, more power to you. This is like saying you can watch a few episodes of This Old House and learn enough to build a house.

The government they bought? The government peopled with their insiders? I think we're going to have to roll out an industrial-grade ball of salt when you post about banking, JBMcB...

I never claimed that banks do not have undue influence on governmental affairs. However, I see the influence as a natural outcome of relatively heavy regulation. The government basically determines how much money banks are allowed to make through a variety of regulation and rate-setting. If a third party had a direct say in your salary, you'd have a vested interest in that third party, too.

The problem isn't too little regulation, it's far, far too much. There are a half dozen regulatory regimes each with thousands of rules and regulations, all overseen by a dozen alphabet-soup federal agencies. There are *floors* of federal regulators in the large banks' HQs. Even with all that oversight, there's plenty of fraud, waste, and generally nasty behavior by the banks.

You want to make banks more accountable? Get rid of Fannie, Freddie and the FDIC and peg the prime rate. Once consumers start caring about the investment practices of their banks again, you'll see some sanity restored in the banking system.

[Scottathew]

Don't get rid of FDIC!

It's a great program that really helps out the middle class folks. Many people had their earnings safeguarded by FDIC, and they did a good job of taking over banks. One of the few things that actually went right.

[Thames]

No, I read blogs from various economists and listen to economics podcasts [[Planet Money from NPR is particularly good) I don't get my economic analysis from watching movies.

I'm not saying the banks and mortgage companies were blameless. A lot of those in charge should be out of a job right now. Some should probably be in jail. However, when assigning blame, they were ultimately doing exactly what the government was pressuring them to do.

The government is now pressuring them to modify mortgages [[HAMP), or at least refinance them [[HARP) and they're not caving to that pressure. Funny that.

[Warrenite84]

One thing not mentioned here is how the skilled trades' "no" vote was swept away and the Chrysler Contract deemed passed by the UAW. I've known for a long time that the UAW's self-interest was the underlying factor in all they do but in this case their cards are all on the table.

Ron Gettelfinger negotiated the V.E.B.A.,[[ an employer funded entity that would administer the funds for retiree healthcare and end future company disbursements for retiree healthcare), in the 1997 contract changes. Since the Government-induced bankruptcy in 2009, the VEBA, controled by the UAW, was given part ownership in Chrysler at about 35%?

So now the UAW, sat on both sides of the negotiating table, and hammered out for themselves a sweatheart deal to extract concessions from their employee/constituents, of which the Union will profit from. Many employees gave up several benefits in the 2009 pre-bankruptcy contract: allowing the two-tier wage workers, combining skilled trades classifications, a heavily constricted attendence policy, etc.

This contract was to dial back somewhat on these severe concessions, to return some sanity to work rules that threatened to harm workers. The skilled trades portion of Chrysler voted down what we saw as suicide for the trades. THE UNION'S RESPONSIBILITY was to re-negotiate the skilled trades' portion of the contract, to counter-offer what the company was wiling to give. Our beef was NOT about money. It was to turn back the combining of skilled trades' classifications and the slow and steady march of extracting the skill out of the trades. This would enable the company to reduce the trades' pay and allow outside contractors to take over tasks not deemed critical to production such as building maintainance, machine installation, etc. , all within skilled trades' present responsibilities.

The VEBA, during the bankruptcy procedings of Chrysler, should have been put into a blind trust administered by bank or such without the direct control of the UAW until the ownership stake is sold. Because this did not happen, a conflict of interest arose that harmed the bargaining power of the represented workers.

Do you think the workers have a legal case against the UAW acting as the Agent and Dealer?
I do.

[Melocoton]

First, I am a banker, for what that's worth.

No offense, but I'm not shocked. I'm a union member for what that's worth [[not the UAW though).

The question is this: how will unions respond to an environment where the economic value of their man-hours is decreasing? Will they attempt to buffer the decline, allowing to happen gradually so that its members can have a "soft landing", one that can gradually transition them for another career? Or will they defend against the decline, fighting tooth and nail to resist the coming change?

You already pointed out that the banking industry is responsible for the current economic crisis, yet you ask the UAW and other unions to "buffer the decline," i.e. suffer the consequences, by ceasing to bargain collectively for wages or work rules [[which rules out most anything significant).

Beyond that, unions don't just exist for the easy flush times--they are also necessary for those times, like now, when management cuts corners and "buffers" itself by slashing wages, laying off workers, extending hours, making you do more work for less pay. Remember that the founding of the UAW took place in the depths of the Great Depression, when many people made arguments similar to the ones you are now making.

The questions of whether the UAW is doing a good job by its members is another conversation, but not one I think it's possible to have on DetroitYes, unfortunately.

[corktownyuppie]

No offense, but I'm not shocked. I'm a union member for what that's worth [[not the UAW though).



You already pointed out that the banking industry is responsible for the current economic crisis, yet you ask the UAW and other unions to "buffer the decline," i.e. suffer the consequences, by ceasing to bargain collectively for wages or work rules [[which rules out most anything significant).

Beyond that, unions don't just exist for the easy flush times--they are also necessary for those times, like now, when management cuts corners and "buffers" itself by slashing wages, laying off workers, extending hours, making you do more work for less pay. Remember that the founding of the UAW took place in the depths of the Great Depression, when many people made arguments similar to the ones you are now making.

The questions of whether the UAW is doing a good job by its members is another conversation, but not one I think it's possible to have on DetroitYes, unfortunately.

You make good points. I would just like to add that while I think bankers are responsible for the severity of the most recent decline, I want to distinguish that from the long-term [[10, 20, 30 yr) reduction in unskilled wages. Or, for that matter, the long-term explosion in health care costs. Those aren't the fault of greedy Wall Street. Those things are happening for the same reasons that newspapers are going out business...demographic changes, technology, etc.

- Workers get replaced by robots
- Newspapers get replaced by the internet
- People live longer and, therefore, health care costs more
- Pensions were originally calculated for people to live 10 yrs into retirement. Now they live 30.


I'm not anti-union at all. I just wish that they would use their resources to prepare their membership for these changes instead of fighting them. If I'm a union representing 50,000 employees, and I know that half of you will be replaced by robots in the next 10 years...I'd want to use that time to prepare half of you for your next career.

I don't see that going on in the union leadership. But, perhaps I'm ignorant. I'm certainly open minded and willing to hear the others side of it.

[Detroitnerd]

The problem isn't too little regulation, it's far, far too much.

OK, dude. Now I know just how much credence to give your remarks...

[Detroitnerd]

I think increased productivity means the gains should be shared by everybody. Instead, since the 1970s, we've seen those gains go to the people at the top.

It's not just a matter of more people, living longer, fewer hours needed to work per person all driving workers down as a matter of course. These gains should be for all of us, not just for the moneyed elite.

At the end of the day, it's a democracy. The people have the power, not the rich. Besides, the real wealth of a nation is its people, not its plutes. Reinvest.

[JBMcB]

OK, dude. Now I know just how much credence to

Here's, among other things, an interview with commodities and derivatives regulators, saying the regulatory framework is so complex they need input from the industry to help create the regulations. Also interesting audio of the FDIC regulators trying to figure out what the last financial regulation bill congress passed is supposed to mean.

http://www.npr.org/blogs/money/2011/...ting-the-rules

But sure, if you think slathering on band-aid after band-aid is going to fix the insanely complicated financial system, more power to you. You can go to Washington, sit in on one of these public regulatory hearings, and offer your input on data retention policy for derivative swaps, or minimum capitalization requirements for savings institutes with inadequate underwriting policy.

http://en.wikipedia.org/wiki/Regulatory_capture

[Detroitnerd]

Bla, bla, bla. You don't even know what I'd propose to solve this problem, so how do you know what I'm thinking? ESP?

Like the majority of Americans, I want to see some prosecutions, lots of corrupt bankers sent to jail, exorbitant fines and stricter regulations.

And seriously, do yourself a favor. See the award-winning documentary. It's not so hard to understand what happened. Regular citizens are frequently presented with evidence that experts feel is difficult to understand.

That happens in a courtroom. That's where a lot of this should have ended up in the first place.

[JBMcB]

Bla, bla, bla. You don't even know what I'd propose to solve this problem, so how do you know what I'm thinking? ESP?

Well, you scoff at the idea that the regulatory system is too complex, with too many rules and regulations. You apparently base this opinion on nothing substantive. I think it is too complex. I'm far from the only one that does.

http://www.huffingtonpost.com/robert...b_1014606.html

Like the majority of Americans, I want to see some prosecutions, lots of corrupt bankers sent to jail, exorbitant fines and stricter regulations.

That's fine and dandy, but prosecutions don't fix anything. They are satisfying and might scare some people for a while, but the underlying problem is still there. "stricter regulations" is just silly and useless. They weren't strict enough before? Do they need to be 25% stricter? If that doesn't work do we make them 50% stricter? Which of the tens of thousands of regulations needs to be stricter?

[/QUOTE]And seriously, do yourself a favor. See the award-winning documentary.[/QUOTE]

Well crap, if a bunch of actors and directors thought it was an accurate and thorough depiction of the financial crisis, then it must be good! I'll watch it, but I imagine it's going to be like watching the 90-minute Rankin-Bass Lord Of The Rings after having read the books.

[/QUOTE]It's not so hard to understand what happened. Regular citizens are
frequently presented with evidence that experts feel is difficult to understand.[/QUOTE]

What happened can be explained in a magazine article. WHY it happened could fill an encyclopedia, but it's essential to understand if you want to fix the underlying factors and prevent it from happening again.

[Lowell]

The VEBA, during the bankruptcy procedings of Chrysler, should have been put into a blind trust administered by bank or such without the direct control of the UAW until the ownership stake is sold. Because this did not happen, a conflict of interest arose that harmed the bargaining power of the represented workers.

Do you think the workers have a legal case against the UAW acting as the Agent and Dealer?
I do.

Your post was excellent and insightful. My take is that placing VEBA in blind trust would simply have been too complex of an arrangement to pull off in the time before the contract expired. Few 'blind' trusts are truly blind and to do so would have created still more controversy amid all the other chaos of bankruptcy.

Since the membership approved the contract, I doubt that there is a legal case about the UAW straddling the fence [but hey anybody can sue anybody for anything anytime if they want to gamble the money]. The UAW's position in dealing with both bankrupt companies was focused on the survival of those companies and the jobs they provide as well as obtaining commitments for hiring. This was done with some givebacks and the membership agreed.

The union-company relationship is evolving toward a partnership somewhat along a German model. I would like to see that model extended to give labor a seat on the companies' board of directors with eyes directly on the books. In this age of internationally mobile capital the two sides should have more in common than in difference.

[Wesley Mouch]

That's where the folks in charge of global capitalism would like to take us. Only the rich may enter the 21st century; for the rest of us, it's back to the 19th century.

And so does it appear that the UAW wants to take its workers -- at least those they have to pay.

[Wesley Mouch]

Your post was excellent and insightful. ...
The union-company relationship is evolving toward a partnership somewhat along a German model. I would like to see that model extended to give labor a seat on the companies' board of directors with eyes directly on the books. In this age of internationally mobile capital the two sides should have more in common than in difference.

Yes. The more that labor has 'skin in the game', the more they'll do what's best for the company [[that means workers and employer working together as a team).

[Detroitnerd]

Well, you scoff at the idea that the regulatory system is too complex, with too many rules and regulations. You apparently base this opinion on nothing substantive. I think it is too complex. I'm far from the only one that does.

That's not what I took away from what you wrote. If you think it's ineffective, though, then we're in agreement. Investment banking should return to what it was in the 1960s, low capitalization with small groups of investors investing their own money, not others'.

That's fine and dandy, but prosecutions don't fix anything. They are satisfying and might scare some people for a while, but the underlying problem is still there. "stricter regulations" is just silly and useless. They weren't strict enough before? Do they need to be 25% stricter? If that doesn't work do we make them 50% stricter? Which of the tens of thousands of regulations needs to be stricter?

Do you agree that we've gone through a period of rampant deregulation of the finance sector since the 1970s? And at great cost to the economy and taxpayer? If you disagree with this, I don't know where we can begin to have a conversation about "strictness."

Well crap, if a bunch of actors and directors thought it was an accurate and thorough depiction of the financial crisis, then it must be good! I'll watch it, but I imagine it's going to be like watching the 90-minute Rankin-Bass Lord Of The Rings after having read the books.

Nah, it's good. Approach it with an open mind. It contains exhaustive interviews with a lot of the heavy players, and the interviews are pretty darn hard-hitting.

What happened can be explained in a magazine article. WHY it happened could fill an encyclopedia, but it's essential to understand if you want to fix the underlying factors and prevent it from happening again.

The only problem, as I see it, is that the solutions are politically impossible when the government is in a thrall to the very financial industries they are supposed to be regulating for the common welfare.

Note, too, that now that the robo-signing settlement, if approved, could absolve the bankers from their criminal liability. I wish I could commit a crime and then have Congress approve something that absolved me of any criminal liability for the very crime I committed.

I think you'll find that the widespread sentiment against banks today doesn't have to do with any revolutionary anti-capitalist sentiment. It's just that they committed crimes and are evading prosecution ... as well as setting themselves up for the next crash, when they go to Congress again and ask for more "help" from the taxpayers ...

Anyway, enough ranting. Check out the documentary. It's a good one.

[Warrenite84]

Lowell, I see your argument but the truth of the matter concerning the contract ratification is that both the skilled and non-skilled laborers both have to ratify the contract, not "at large". Presently, a petition is being passed around the plant that is requiring the Union to provide details of the deliberation meeting including the transcripts and list of those in attendence when the split-vote occured. This information cannot be withheld from those being representated as stated in the union bylaws. We are looking to see how the Union was able to ignore the bylaws and render the skilled trades vote null and void. We expect to discover evidence of collusion with the company against the workers. This IMHO will show that the skilled trades at Chrysler have a case.

[Jimaz]

...Check out the documentary. It's a good one.

Here's the final 20 minutes of it:

Inside Job 2011 Best Part