Nancy Pelosi should have read Bastiat

Speaker Pelosi has determined that the House should violate Fast Track authority legislation and prevent the Colombian Free Trade Agreement from being considered by the Congress. Under existing Fast Track standards trade agreements are submitted to the Congress after being negotiated by the administration and are then required to be voted up of down in 60 days or less. (45 days plus 15) One of the gifts of the new congress in 2007 was it allowing this important authority to lapse last July. But since the Colombia agreement (along with a couple of others) was negotiated before last July, it should get considered under the old rules. For my money the Speaker sounds a lot like the Queen in Alice in Wonderland - defining reality in any way she wants.

The AFL doesn't want the Colombian Free Trade agreement voted on, indeed its leaders would love to have NAFTA and all the other liberalizations of trade to be abrogated. It seems they believe that the "deindustrialization" of the US has happened as a result of all this free trade. Presumably, the slide experienced by the AFL in promoting membership over the last couple of decades has been brought about because of all this free trade and by eliminating trade with anyone but us. That is, of course, nonsense. Again as one labor leader told me at one point John Sweeney is no Lane Kirkland.

The oddity of the AFL position comes from the realization of what the FTA would actually do. Colombian imports come into the US tariff free under another trade pact. But key US exports face a fairly heavy tariff when entering Colombia. Thus, Pelosi by stopping the FTA is actually hurting the prospects for American workers who rely on exporting their goods. (Computers in California, consumer durables in Ohio and Michigan for example)

Part of this comes from myths in labor. A year ago or so some union types argued that 60 million workers would join a union "if they could." While the percentage of workers in the private sector continues to decline (despite the idiocy of the argument above - workers are choosing not to join unions) the percentage of public sector employees with union contracts is almost 40%. The linkage between public policy and public sector unionism is not a coincidence.

Last week a group of labor leaders from Colombia came to D.C. to plead their case. One Gustavo Palacio, who leads the miners union, said he supports the FTA. Señor Palacio also supports the creation of a union that would be "independent, democratic and pluralistic." The schlerotic leaders of the American labor movement see the world in yesterday's terms. They don't give a hoot about being independent or democratic (at least in the non-party sense) or pluralistic. Witness their attempts to force new kinds of voting procedures for union elections which they cannot seem to win, when workers are given minimal procedural safeguards.

Ultimately the problems with American industrial unions are related to what they offer their members. Instead of spending time on improving conditions of their workers they pursue a massive agenda that mostly means more government. When given the opportunity most non-governmental workers choose not to join. The unions may be partially victims of their own success in the legislative process. A good example is the eight hour rule. At the end of the Wilson administration in California our industrial welfare commission adopted a change in the way overtime pay is assessed. Previously a worker would be eligible for overtime when working more than eight hours in a day. Under the Wilson rules, a worker could collect only for more than forty hours in a week. The Wilson commission thought that many workers wanted to be able to have more flexibility in their scheduling. So for example, a worker could choose to work four ten hour days and have a permanent three day weekend. There was no evidence that under the new rules that employees were being tied to their workplaces. But the unions would have none of it. They rushed through a very restrictive set of rules which mandate an eight hour rule for overtime with only very limited exceptions.

But as one astute labor leader told me at the time, that was a dumb quest. Bastiat, the French Nineteenth Century economist argued that there was the "seen" and the "unseen" in policies. In this case, labor scored a big "victory" (seen) with the move back to the old rules (and even a bit farther). But they undoubtedly reduced their opportunity to negotiate specific rules in places they were seeking to organize which would attract more potential members. (the unseen) Labor membership in California continues to decline except among governmental workers.