Friday, September 24, 2010

I Smack Down a "Financial Times" Wingnut Columnist


Britain's The Financial Times is my favorite newspaper these days (indeed, I think it may be the best newspaper in the English-speaking world).

This might come as a surprise to those who know me as a flaming progressive. But the fact is, as a former newspaper journalist, I've come to appreciate over the years what makes a good newspaper.

The Financial Times (or "FT") has all the qualities that make a great newspaper in spades. Solid, in-depth reporting. Outstanding feature articles. No fluff or sleaze. Some of the best international news coverage anywhere. And, best of all, little obvious pro-business bias (despite the fact the FT is primarily a business newspaper).

This is in sharp contrast to Rupert Murdoch's The Wall Street Journal. The latter at one time was an outstanding U.S. newspaper that was only marred by an extreme right-wing editorial page. Sadly, under Murdoch's ownership, the entire paper now has an extreme right-wing bias.

The WSJ is, of course, ferociously pro-GOP. It also exists in its own parallel universe (like the rest of the Fox News/Drudge/Hate Radio propaganda machine). In the WSJ, for example, Ronald Reagan is an American hero who single-handedly won the Cold War. And global warming is a liberal conspiracy. And war criminals like Karl Rove are regarded as noble, distinguished statesman, who get regular columns to express their words of wisdom.

By contrast, The Financial Times is a welcome dose of reality. Here, global warming is accepted as the hard science that it is. And George W. Bush is called out for what he was: a disaster for both the U.S. and the world. And the Iraq War is rightly described as a fiasco.

Don't get me wrong: politically, the FT is not the Guardian. However, you get a lot more depth with the FT (as might be expected from a newspaper whose readership may have the wealthiest demographics of any newspaper in the world). A newspaper that has rich readers is able to attract high-paying advertisers, like BMW and Rolex. And that, in turn, leads to a bigger budget and a quality product.

It also reveals an interesting fact. Many wealthy readers don't want a newspaper that is the printed equivalent of Fox News. In fact, a lot of these rich subscribers regard the likes of Rush Limbaugh as a lightweight clown, just like progressives do. They wouldn't dream of wasting three hours a day listening to his OxyMoron ramblings.

What wealthy readers do want, though, is a highly concentrated dose of unvarnished truth. Just the facts, with no spin. In fact, I'd suspect that the CEOs, the prime ministers and the rich & powerful that make up much of the FT's readership can't afford any spin in their news. The info they get has to be accurate, it has to be top-quality, and it has to cover the world. It has to be free of fluff and tabloid sleaze. You won't read about Paris Hilton in The Financial Times.

Anyway, that's my theory as to why the FT offers such a superior newspaper. It shines in many areas that U.S. newspapers are truly lacking these days. Most U.S. newspapers offer abysmal international coverage, for example. And the quality of writing at most U.S. newspapers has consistently declined in recent years.

U.S. publishers have responded to declining circulations by slashing budgets and newsroom staff (an idiotic decision that has only led to newspapers continuing to decline in quality---which in turn hemorrhages readership). You don't get great journalism when your badly paid, over-worked journalists are struggling to find the money to simply pay the electric bill and put food on the table.

Anyway, I suppose this article thus far has read like a big ad for the The Financial Times. And so it's here that I'll point out that not everything is perfect with the FT. The paper does, from time to time, feature wingnut columnists, every bit as nutty as anything on Fox News.

And I recently smacked one of them down. Columnist Luke Johnson wrote a Sept. 22, 2010 piece denouncing unions. I responded with a letter to the editor that set the record straight. Both Johnson's column and my letter follow:

Unions are an obstacle to progress
By Luke Johnson

My earliest memories of unions in action are bad ones: in particular, my father being threatened in the late 1970s with a libel action by the late Jack Jones, then the boss of the Trades Union Congress, after a prescient article my dad had written denouncing the way strikes were ruining the British economy.

Experiences since have not changed those first impressions. In New York, a union city, I have witnessed how they rule the docks, Broadway, the construction industry and the hotel trade. Woe betide any naive overseas investors who want to risk their capital there. Classic American pragmatism is replaced by total closed shops, institutionalised entitlements and costs that are several times what they would be if a free market pertained.

If you contrast trade unions with entrepreneurs, the comparison is not flattering. Unions never create jobs or generate wealth – they simply attempt to redistribute it – usually by the threat of strikes. They see the world as a zero-sum contest. But business founders build companies, innovate and increase output through their ingenuity. More often than not, start-ups avoid unions altogether because they tend to act as an obstacle to change and progress. Frequently, new companies succeed because they are not burdened with out-of-date working practices that render the established players inefficient. Silicon Valley is not exactly renowned as a hotbed of union activism – its enterprising workers are too busy inventing the future.

Unions are usually engaged in trying to preserve the past, entrench privilege and resist technological advance. Britain’s Royal Mail underperforms desperately because its vast unionised workforce will not accept reforms and mechanisation. It will continue to decline if it fails to adapt, and will never attract the investment it needs to improve, until its unions adopt a more enlightened attitude towards modernisation.

Increasingly, unions rely for their power base on the public sector. They are also the principal paymasters of political parties such as the Democrats in the US and the Labour party in Britain. When in office, those politicians in turn bribe the unions with the taxpayer’s money.

The idea that public service was a calling for which citizens made sacrifices has been turned on its head. Now those in the public sector tend to enjoy higher salaries, better job security, work shorter hours and get far better pensions, and take more time off sick than their private sector counterparts.

In the global 21st century economy, industry is simply too competitive for the destructive and unrealistic behaviour of the union dinosaurs. Those elements of the private sector where US unions have called the shots, such as the Detroit auto industry, have been a disaster. Non-union plants have been far more productive and successful.

Ultimately, the British government might have to study what President Ronald Reagan did in 1981, when early in his tenure the US air traffic controllers insisted on huge new salary increases. Their demands were rejected, so 13,000 of the 17,500 union members walked out. Because they had signed an oath never to strike “against the public safety”, the government felt able to sack most of them. Meanwhile, non-striking controllers, their bosses and military personnel kept the skies open and more than half of all airports operated normally.

Within weeks, thousands of new recruits had joined the service to train as controllers at the old salaries. The fresh applicants provided undeniable evidence that unions exist partly to force up the cost of labour beyond a market rate. Remarkably, there were no accidents, and aircraft movements fairly rapidly recovered to levels prior to the strike. The old controllers never got their jobs back and their union was disbanded.

Militant, confrontational unions are a throwback that the west can no longer afford. They pretend to fight for causes such as equality, health and safety and skills. In reality their leaders are obsessed about two things only: money and power. I hope the public and our political classes remember that if there is conflict in the coming months.

Here, is my response to Johnson, which ran on the FT's "Letters" page on Sept. 24:

Unions played key role in developing U.S. middle class

From Mr. Marc McDonald.

Sir, In his column “Unions are an obstacle to progress” (Business Life, September 22), Luke Johnson unfairly blames unions for many of the woes currently afflicting U.S. businesses.

Mr. Johnson's arguments make little sense. For example, he claims that unions "called the shots" that led to the disaster that befell Detroit's carmakers.

But it was Detroit's chief executives, not the unions, that led the carmakers to ruin. It was the CEOs who consistently made short-sighted, disastrous decisions, such as betting the farm on clunky, gas-guzzling vehicles that eventually fell out of favour with consumers.

Mr. Johnson also completely ignores the experience of heavily unionised nations such as Germany, where carmakers continue to thrive. Unions are vastly more powerful in Germany than they are in the U.S. and they are backed up by strong, pro-labour laws that most U.S. workers could only dream of.

What Mr. Johnson, and other anti-union commentators, consistently ignore is the fact that unions in America played a key role in the creation of the great American middle class that made the U.S. the envy of the world for decades after the second world war.

It was only after Ronald Reagan crushed the union movement in the 1980s that the middle class began to shrink. The U.S. today has the biggest gulf between rich and poor of any first world nation. This economic polarisation has continued to grow, as unions have declined in power.

Marc McDonald,
Fort Worth, TX, U.S.A.


Jack Jodell said...

WELL DONE, and completely accurate, Mr. McDonald! Mr. Johnson was deservedly called on the carpet for his errant conclusions. The U.S. would be far better off today if only unions COULD "call the shots" on economic policy!

Marc McDonald said...

Thanks for your comment, Jack.
>>> The U.S. would be far better
>>off today if only unions
>>COULD "call the shots" on
>> economic policy!

Actually, as you likely already know, unions do get to call the shots in much of Europe. For example, by law, union reps get a share of the seats at the table on the board of directors at European corporations (an unheard of arrangement in the U.S.)
Also, thanks to the Mitbestimmung, or "co-determination" arrangement, German workers get a say in the management of companies.
Co-determination has gotten little or no attention in the U.S. media over the years. The U.S. media is too busy with more important stories like Paris Hilton's latest hairstyle.

Jack Jodell said...

Well said, Marc. Co-determination would be a very healthy and sensible action to implement here. And you're right about our media reporting junk instead of useful news.

Ms. D said...

Unfortunately, it's not the unions that are the real, root problem or solution in our current American economic predicament. American unions are totally ineffective in fighting modern economic woes and supporting average people in our current economic climate. Unions cannot return America to a booming, middle-class driven nation under our current political and economic structures.

We have a fundamental problem in this economy, and that is a desire to return to the structures of the late 1800s and early 1900s by business owners (no one gave them the memo that they made a lot more money in the mid-20th century), combined with a mentality that the middle class still exists. People in the purported "middle class" buy up everything in sight, whether they can afford it or not, driving up the prices of everything (mostly made elsewhere or with below-living-wage labor), enriching only the ruling class. Meanwhile, these same people sit by and watch their jobs be exported or severely undervalued. I'm not as radical as you might think from this statement. To the contrary, I'm an economist typically in favor of the free market and free trade. But what drove this country to the massive economic boom of the mid-20th century was the middle class, and I can't see any way for the country to return to that except massive economic hardship given our current political and philosophical climate (I won't say intellectual because (a) intellectuals don't believe our system is healthy; (b) they're smart enough to understand this argument; and (c) those who would benefit most from understanding our current predicament are far from intellectual, in fact, they "hate" "intellectuals").

Unfortunately, if we're going to maintain the structure of the U.S. system, a massive gut of entitlement programs is the only thing that will fix our problems. The "rich" now earn more of their income from wages than ever before in history, wages paid on the backs of true working people who buy the companies' products. Only when the "people" no longer have money for discretionary spending will businesses return to the wisdom of companies like Ford at its founding - a company that understood it needed people to buy its product and made sure that was possible for its employees.

Of course, we could go all radical and stuff and reform our economy to enforce the economic wisdom that recognizes our entire economy is based on exploitation (Europe is not even a good model, as they simply maintain existing structures rather than attempt to move forward into an economically sustainable world). But given our current economic and political climate, I say fat chance.