What Happened Today: December 14, 2022
DHS did nothing; Power grid under attack; Jordan Peterson loves the Jews
The Big Story
Detailed warnings from a Department of Homeland Security (DHS) analyst who discovered plans prior to Jan. 6, 2021, by individuals discussing the “violent overthrow of the government of the United States'' were largely ignored by the DHS, according to a government report originally released in March but only made public this week. The report by the Office of the Inspector General at the DHS and a separate letter written by the DHS analyst were reported on Tuesday by Yahoo news. They outline the attempt by the analyst, who is not named, to alert DHS administrators of the message boards and websites that included “maps of the Capitol access tunnels,” strategies for smuggling weapons, and “500 pages worth of potential threats to national security.” According to the Inspector General report, DHS officials failed to pass on the “information about potential threats'' to “the Capitol Police, the FBI, the ATF, the Secret Service, and all local D.C. agencies” ahead of the Jan. 6 storming of the Capitol.
The DHS was created to deter a future terrorist attack after 9/11, but it’s been plagued by bureaucratic bloat. In April this year the agency announced the creation of a new “Disinformation Governance Board” that was quickly shutdown after attracting a torrent of criticism, much of it comparing the new office to the Ministry of Truth from George Orwell’s dystopian novel, 1984.
The poor handling of the intelligence appears to reflect a muddled process for elevating threats detected by open-source collectors who are tasked with evaluating the merits of potential intelligence before it’s turned into reports distributed to other federal offices. “Internal communications seemed to show confusion and hesitancy from staffers to produce the reports requested because of a lack of training, ever-shifting guidelines, or too high or unclear a reporting threshold—even as those who worked there became increasingly convinced an attack would take place,” Yahoo said. “I found a map of all the exits and entrances to the capitol building,” one open-source collector wrote in a group chat on Jan. 1, 2021. “I feel like people are actually going to try and hurt politicians. Jan 6 is gonna be crazy.”
In the Back Pages: Labor’s Lost
The Rest
→ A second protestor arrested for involvement in the demonstrations against Iran’s theocratic rulers was executed in front of a crowd gathered in Mashhad, where he was hung from a rope tied to a construction crane. Images of the hanging of Majidreza Rahnavard were quickly circulated by the state news agency, Mizan. Rahnavard was apprehended for stabbing to death two members of the state security force during a protest. The speed of the sentencing—just one month from arrest to execution—speaks to Iran’s efforts to use violence to deter the demonstrations that have persisted since September. Like the trials of more than dozen other protestors who’ve received death sentences, Rahnavard’s trial took place behind closed doors. The defendant was not allowed to see the evidence presented by prosecutors to the tribunal, nor was he allowed to select his own attorney. Human rights groups estimate that Iran has detained more than 18,000 protestors since the outbreak of mass protests.
→ About 400 rooms in the Cecil Hotel remain vacant after it was repurposed in December of 2021 with a mix of private and public funding and administrative support from the city of Los Angeles to provide housing for some of the city’s 40,000 homeless. “They literally have homeless encampments in the shadows of these vacant buildings,” a housing activist named Susie Shannon told The Los Angeles Times. Despite the dense homeless population living in the adjacent Skid Row area that abuts the hotel, two-thirds of the hotel’s rooms remain unoccupied. The struggle to attract tenants is a product of a “system beset with a slow-moving bureaucracy and multiple failure points,” the Times says, pointing to a network of NGOs and city agencies that slow down the approval process required before residents can move in.
Read More: https://www.latimes.com/business/story/2022-12-13/cecil-hotel-homeless-housing-struggles
→ Following recent attacks with firearms on power substations in North Carolina, new public records obtained by Oregon Public Broadcasting show that six substations across the Pacific Northwest have recently suffered similar attacks that occurred over the past six weeks, including two that involved assailants using guns. Residents across Oregon and Washington State had some brief loss of electrical power while utility companies repaired the damage, with one utility company telling The Guardian that it was cooperating with the FBI on an investigation. With more than 55,000 substations and 6,400 power plants plugged into a system that relies on 450,000 miles’ worth of transmission lines, the U.S. electrical grid is a sprawling network with myriad points of vulnerability that analysts say remains largely unprotected against acts of terrorism. A US Department of Homeland Security (DHS) report released in January warned that domestic extremists have been developing “credible, specific plans” to attack electricity infrastructure since at least 2020.
→ It’s feast or not quite famine for the investment bankers at Goldman Sachs as top brass David Solomon attempts to rein in costs with a 40% cut of the annual bonuses earned by its some 3,000 bankers. The slashing of the bonuses, as reported by Semafor and the Financial Times, is the biggest reduction since the market crash during the 2008 Great Recession, with cuts potentially even bigger for the firm’s 400 partners. The light money purses could spark a minor exodus as bankers look to private equity and other possibly more remunerative opportunities, though it wasn’t as if the bank didn’t see this coming. Last year, like many banks that made windfalls during the COVID-19 pandemic, Goldman saw its massive profits trickle down to staff in the form of historic bonuses—with nearly half a billion dollars’ worth of special stock split up among the 400 partners. But employees were warned this was likely a one-time event, with the bank’s CFO telling analysts that “to the extent the environment in 2022 shifts, that compensation model is highly variable.”
→ Quote of the Day:
Modern Orthodoxy is in a state of crisis. It is in a state of crisis because its leadership class has, in large measure, abandoned its central principles in favor of political expedience, surrendering long-term interests for short-term tactical maneuvering.
That’s Ben Shapiro in a lengthy examination for The Jewish Press on how Modern Orthodox institutions have strayed too far from the notion that secular society can “enrich a Torah worldview and lifestyle” and “moved toward the corruption of Jewish values by infusing the worldview of secularism.” Looking at a secular modernity whose foundation is the idea that one’s “subjective sense of self must be celebrated,” Shapiro argues “authentic Judaism cannot abide this worldview.”
Read More: https://www.jewishpress.com/indepth/opinions/modern-orthodoxys-moral-failure/2022/12/12/
→ The crypto crackdown continues apace with a new class-action lawsuit against Justin Bieber, Gwyneth Paltrow, Jimmy Fallon, Snoop Dog, Madonna, and a bevy of other celebrities for their role in promoting Bored Ape Yacht Club NFTs and other digital securities without mentioning their financial ties to the crypto companies that produced and distributed them. The “entire business model relies on using insidious marketing and promotional activities from A-list celebrities that are highly compensated (without disclosing such),” reads the suit filed in California federal court, pointing out promotional efforts like Tonight Show host Jimmy Fallon touting the Bored Ape NFT he purchased through the digital asset trading service MoonPay without any mention of his financial investment in the company. The end result, the suit says, led a flood of buyers to pick up the assets at pumped-up values before they turned into “losing investments at drastically inflated prices.”
→ Hollywood’s crypto winter is edging north to Canada, where digital trading platforms will now have to adhere to tighter trading rules, including an all-out ban on leverage trading. The new regulations announced this week by the Canadian Securities Administrators come after “recent events in the crypto market” and include requirements for platforms to keep the assets of their Canadian clients in custodial accounts segregated from the platform’s own holdings. Skepticism toward crypto currency has been an ongoing preoccupation for Justin Trudeau’s administration since the Freedom Convoy protests saw truck drivers trying to use crypto exchanges to support their demonstrations at the beginning of this year. Trudeau has since openly attacked political opponents with ties to the crypto space.
→ Video of the Day:
Speaking of the Great White North, Canada’s most emotive life coach, Jordan Peterson, can hardly contain himself here as he recounts with world-historic earnestness an encounter he had with two Jewish fans of his on the street. Peterson might have more fans yet who see him as a quasi-religious figure in their life, as he’s recently announced a new online lecture series on the Book of Exodus. Co-branded with the series is a spiritual coaching app that Peterson bills as “a 90-day spiritual exercise for men based on three pillars: prayer, asceticism, and fraternity.”
→ Map of the Day:
Winter is upon us—which means Ready Spready Go, Carrie Bradthaw, Buzz Ice Clear, and the Sled Zeppelin are out in full force as part of the fleet of Scotland’s curiously named ice trucks that tend to the curvy hills and backroads of the Scottish countryside. With some parts of the Scottish Highland seeing as much as 100 days of snow a year, there’s comfort to be found in knowing the team running Hansel and Grit-All is out clearing the way to the local grocery store.
TODAY IN TABLET:
The Rower by David Samuels
A story about karma
Nedarim 50 on Take One
In today’s Talmud page, must scholars always be poor?
SCROLL TIP LINE: Have a lead on a story or something going on in your workplace, school, congregation, or social scene that you want to tell us about? Send your tips, comments, questions, and suggestions to scroll@tabletmag.com.
Labor's Lost
In America today, we have informal labor cartels for the college-educated elite, while private sector unions for the working class are all but annihilated
By Michael Lind
What was called “the Labor Question” a century ago has returned to the forefront of public debate, thanks to highly-publicized attempts to unionize companies as varied as Amazon and The New York Times, and in spite of the efforts of the flacks of the neoliberal left and libertarian right (and the billionaires and corporations who fund them) to keep public attention focused on the culture war instead of the class war.
According to Gallup, 71% of the public approves of labor unions—the highest percentage since 1965—with 90% support among Democrats, 66% among independents, and 47% among Republicans. But because of partisanship and class interests, these views are not translated by the Democratic and Republican parties into support for organized labor. This is largely a result of the increasingly elitist nature of American politics. Both parties have super-rich donors who are more or less libertarian—socially liberal and economically libertarian. The Silicon Valley and Hollywood elites who fund the Democrats are as hostile to organized labor as Republican-leaning agribusiness and logistics industries.
The social base of the Democrats now consists of upscale, mostly-white, college-educated voters for whom abortion, subsidized solar and wind power, and the imposition of race and gender quotas in all areas of American society are more urgent priorities than organizing warehouse workers or raising the minimum wage, even if cultural progressives pay lip service to organized labor. Meanwhile, even though most Republican voters of all races are working class, the most influential group within the GOP is the mostly-affluent minority of the population—fewer than ten percent of Americans—who are self-employed owners of small businesses that hire workers. Portraying themselves as victims squeezed between big business above and the working class below, most small business owners are and always have been ferociously hostile to any reform that increases the ability of their employees to bargain for higher wages, benefits, or better working conditions.
Thanks to the indifference of Democrats and the hostility of Republicans, union membership among private sector workers in the U.S. has collapsed from around a third of the population in the 1950s to around 6% today—lower than it was during the presidency of Herbert Hoover, before Franklin Roosevelt’s pro-labor New Deal.
For more than half a century, American employers have used a variety of methods to annihilate organized labor in the American private sector. One method has been geographic labor arbitrage—transferring production from unionized sites in pro-labor states to non-union workforces in anti-labor right-to-work states in the American South or West, or to countries with poor and repressed workers like Mexico and China. The flip side of geographic labor arbitrage is immigration arbitrage, replacing unionized workers with immigrants who are not unionized and, in the case of illegal immigrants and guest workers, are easily bullied and exploited by employers. The outsourcing of jobs formerly done in the firm by unionized workers to non-union contractors is another tool used by corporate America to crush private sector worker power in the U.S.
Not content with annihilating collective bargaining, lobbyists for American employers and their political allies have weakened the power of individual, non-unionized workers using legal devices like non-compete contracts, by which workers sign away their right to work for rivals of their employer if they quit, no-poaching/no-hiring agreements among firms in the same industry, and other unethical but sometimes legal anti-worker schemes.
Libertarian ideologues believe that all of this is to the good. Unions are labor cartels and all cartels are bad because they might raise consumer prices above their supposed free market rate. The marginal revenue product (MRP) theory of compensation holds that in a free market, workers will be paid on the basis of their exact contribution to the profitable enterprise (which—surprise!—just happens to be what any particular employer prefers to pay). According to this extreme theory, any government interventions in the U.S. labor market, including minimum wages and limits on immigration of workers from other countries, in addition to pro-union laws, can only backfire to the detriment of consumers—the one group that matters.
Most of the champions of the free market who make these arguments in public derive their income not from selling goods or services in the marketplace but from the gifts of donors as professors, think tank fellows, or journalists at money-losing publications subsidized by rich libertarians.
Often they equate their radical libertarianism with “classical liberalism.” But the actual classical liberals of the eighteenth and nineteenth centuries had far more nuanced views about labor. Adam Smith noted that in bargaining for wages, employers had a good deal more power than employees. Two of the leading classical liberal economists of nineteenth-century Britain, J.S. Mill and Alfred Marshall, believed that trade unions were necessary to balance the excessive power of employers in wage negotiations.
Once we recognize that wages are not set automatically by a mystical market equilibrium, but result from the relative bargaining power of the two sides in wage negotiations, the libertarian theory of the labor market collapses. To be sure, there are limits on what firms—and government agencies and nonprofit organizations—can pay their workers, from the janitor to the CEO. But most profitable firms have some discretion in how they divide their profits among shareholders, managers, and workers, after other costs have been paid. Excessive pay for workers can ruin a profitable firm, but so can excessive pay to managers or excessive pay-outs to shareholders.
A majority of Americans in the private sector work for firms with more than 500 employees, notwithstanding nonsense about small business being the backbone of America. The inconsistent ideologues of the free-market right tell us that it is perfectly acceptable for the numerous managers and shareholders running these large companies to combine and act as a single unit in negotiating wages with employees, and yet somehow it is unacceptable for workers to team up and bargain as a unit on the other side of the table. The idea that a janitor can somehow bargain with the pooled, collective force of the managers and owners of a large corporation is so absurd that only libertarians or academic economists could believe it.
If organized labor in the private sector is so weak, why are there any well-paid workers in the U.S. at all? The answer is that unions are not the only kinds of labor cartels that boost the incomes of their members. Professional associations and trade associations seek to limit the number of practitioners in their occupations, thus increasing the prices of goods and services—preferably by means of government licensing laws, with safety invoked as a rationale. This dynamic explains why, as union membership has declined, there has been an explosion of licensing requirements in occupations like florists. The public must be protected from accidentally lethal bouquets! The American Medical Association (AMA) has been more successful in limiting the number of practitioners in the U.S. than their equivalents in the law and the academy, where surplus JDs and PhDs have driven down incomes and reduced employment prospects for lawyers and professors.
Many affluent Americans in the private sector benefit from working for large corporations. The more successful firms possess the market power to set prices higher than they would be able to in conditions of hypothetical pure competition thanks to their status as natural monopolies or oligopolies. These surplus profits or “rents” can be used not only to enrich CEOs but to shower money on middle managers and other well-paid if often unproductive employees of the “email caste.”
In most large organizations of the private, public, and nonprofit sectors, compensation is determined by “salary bands.” The highest wage permitted in the salary band for a receptionist will be lower than the lowest wage in the salary band for a vice president, even if the company depends on the receptionist and the vice president is a bumbling incompetent. Under antitrust law, firms cannot collude with one another to fix the wages they pay, but in practice this is precisely what most large-scale employers in the U.S. do. Although salary bands reflect the logic of an anti-worker cartel among similar firms, agencies, or nonprofits, those in the well-paid salary bands naturally do not protest their comfortable oppression.
The myth of meritocracy—the global market rewards educated workers with high skills— usefully camouflages the quasi-feudal reality of salary bands, in which compensation is based on status and job definition, rather than an employee’s contribution to the organization. The better-paid, higher-status jobs tend to require employees with more expensive and time-consuming college credentials, whether skills learned in college are used on the job or not. In the real world, your pay is largely determined by your place in the organized hierarchy—by your “band”—and not by your personal talents or education. The same person with the same skills might make vastly more money as a corporate vice-president in a large, oligopolistic firm, than as an outsourced consultant, just as a unionized janitor working as an employee of a unionized firm could make much more than a non-union employee of an outsourced janitorial services contractor.
In short, most wages in the U.S. and similar countries are rigged, directly or indirectly, by law and custom. In some occupations they are rigged in favor of workers, in others they are rigged against workers. What has happened in the last half century is not the emergence of a free labor market as a result of the decline of labor unions. While one kind of labor cartel, the trade union, has declined, other labor cartels flourish—the licensing cartels that inflate the pay of doctors, lawyers, and professors, and the pro-employer price-fixing salary band cartels formed by oligopolistic firms that share their high profits with the CEOs and their well-paid subordinates. In America today, we have informal labor cartels for fortunate members of the college-educated managerial and professional elite, while labor cartels in the form of trade unions for members of the private sector working class have been all but annihilated.
It gets worse. Millions of Americans—particularly in low-wage service sectors like fast food and house-cleaning—are paid too little to live on as individuals, much less to provide for their families. Because most Americans are not libertarian sociopaths, our society will not allow great numbers of American workers to starve to death or go without medical care. To make up the gap between the poverty wage paid by employers and a minimally-decent income and access to benefits, American taxpayers—generous to a fault—subsidize a variety of welfare programs, from the Earned Income Tax Credit (a cash subsidy for underpaid workers) to food stamps, housing vouchers, and Medicaid. These are benefits not just for those who are unemployed for various reasons but for millions of Americans who work full time but are still poor because their employers pay so little. This low-wage/high-welfare system succeeds in eliminating extreme poverty—but at the price of shifting the burden of paying the costs of survival for low-wage workers from their employers, and the consumers of the goods and services they produce, to taxpayers. Much of the American welfare state functions as an indirect subsidy to cheap-labor employees in fast food restaurants, warehouses, and agricultural plants.
Suppose that the U.S., like Switzerland, had federal referendums. Suppose that a referendum asked, “Should every employer be required to pay a wage sufficient to keep workers and their families out of poverty, with no need for them to rely on welfare programs?” The hypothetical referendum would probably pass by an overwhelming majority.
But as we have seen, both national parties in the U.S. are controlled by different factions of the overclass. The progressive professionals of the left-overclass benefit from low wages for household servants and urban service workers, with the taxpayers picking up the rest of the tab. At the same time, many small business owners on the Republican right can pay poverty wages to their workers, knowing that the workers and their children won’t starve thanks to the generosity of government safety nets. The professionals of the left and the small business owners of the right furthermore agree with each other, and disagree with most Americans of all races, that immigration is too low in the U.S. The overclass left wants an immigration-fed buyer’s market in low-wage, non-union maids and nannies and gardeners and the overclass right wants an immigration-fed buyer’s market of low-wage, non-union factory and field workers.
Both the elite left and the elite right prefer the hysterics of the culture war to the politics of class war. Identity politics allows progressives to feel good about demanding more nonwhite and female and non-binary representation on corporate boards, even as they quietly pay their illegal immigrant maids and nannies off the books. Culture war politics allows conservatives to pose as champions of the working class by defending working-class social values, even as conservative politicians oppose any attempt to improve the wages or benefits or workplace bargaining power of working-class voters.
The bad news is that the power of the American working class in the private sector is lower than it has been since before the New Deal. The good news is that, having hit bottom, worker power in the U.S. has nowhere to go but up.
What would an agenda for rebuilding worker power in America after half a century of employer assaults and bipartisan neglect look like? To begin with, a successful coalition in favor of restoring power to American workers would have to be nonpartisan. The near-total identification of America’s moribund legacy unions with the Democratic party machine is incompatible with that goal. In the private and public sectors alike, organized labor in whatever form it may take should focus solely on wages, working conditions, and benefits, should welcome workers of all parties or no party, and should leave other subjects to other organizations.
Rebuilding worker power in America requires rebuilding collective bargaining in some form. Even if anti-worker legal devices like non-compete clauses or at-will employment were outlawed, most Americans in the private sector cannot realistically bargain over wages and benefits on an individual basis with the large firms they work for.
But collective bargaining need not follow the site-by-site, enterprise-based unionization system that is the legacy of the 1935 National Labor Relations Act (the Wagner Act). One reason that employers have been more successful in destroying private sector unions in the U.S. than in similar industrial democracies is the difficulty of enterprise-based collective bargaining, which sees labor organizers struggling to unionize one Amazon warehouse at a time. Sectoral bargaining, in contrast, which compels all of the firms in a given industry or occupation to negotiate wages and benefits with all of the relevant unions in that sector, is common in other democracies, but less so in the United States, with the notable exception of railway and transit workers and airline employees under the Railway Labor Act of 1926.
It is possible to have sector-wide collective bargaining coverage, even with low levels of union membership. In France, few workers belong to trade unions, but most workers are covered by industry-wide agreements negotiated between unions and employers. Given the near-extinction of unions among private sector workers in the U.S., the priority of pro-worker reform should be to expand collective bargaining coverage rather than union membership.
In occupations with many dispersed and hard-to-unionize workers, wage boards or worker standards boards provide an alternative to traditional collective bargaining between employers. These are commissions with representatives of labor, business, government, and sometimes consumers, which are empowered by law to set or recommend wages, working hours, and benefits in a particular low-wage field. The state of New York has used the wage board system to raise wages for fast food workers.
Some progressives might argue that it would be easier simply to legislate high wages and universal benefits and good working conditions, rather than try to rebuild worker power in the United States. But if such pro-worker reforms were politically possible in the absence of institutions representing labor in the private sector, they would have happened already.
Won’t Republicans oppose any effort to restore worker power in America? As we have seen, the rich libertarian donors and anti-labor small business owners who control the machinery of the Republican party do not represent either the values or interests of the majority of Republican voters, who are increasingly members of the working class of all races. The faction of the GOP that is not hostile in principle to organized labor is limited for now to a small number of intellectuals and journalists and a few elected Republicans like Josh Hawley and Marco Rubio. But that faction may grow, thanks to the out-migration of country-club Republicans to the increasingly upscale Democrats and the influx of former working-class Democrats into the GOP.
As a philosophical matter, conservatism and libertarianism have distinct views of the Labor Question. British One-Nation Tories, French Gaullists and German Christian Democrats have not automatically sided with businesses against trade unions or rejected government intervention on behalf of national working classes. It is difficult to be a nationalist—even an inclusive “civic” nationalist—while opposing reforms that benefit the vast majority of the adults of a modern nation, who are workers compelled by necessity to sell their labor to employers in order to avoid either poverty or humiliating reliance on public welfare. Nor is it a coincidence that the Christian and Jewish traditions have often criticized bad employers and championed the interests of workers and the poor, while the leading intellectuals of the libertarian right have been atheists like Ayn Rand.
It took half a century for organized business to destroy organized labor in the American private sector. It will take at least that long to rebuild worker power in America. The sooner we begin, the sooner we can replace class war in the United States with class peace.
What Happened Today: December 14, 2022
If the article had been let's say about organized crime rather than organized labour, this comment section would've been flooded. What a pity.
Lind's analysis is cogent in relation to the private sector, alas NOT to the public sector in which civil service unions exert corrupting and vastly undue power over elected officials, whom they elect, and are undermining fiscal solvency for many states and localities. More collective bargaining in the private world would be wonderful, with safeguards re corruption and transparency.