"Shovel-ready was not as shovel-ready as we expected," observed President Obama this week, enjoying a nice chuckle about the unhappy fate of his near-$1 trillion stimulus. To be sure, Obama has also been promoting a less-amusing remedy for anemic growth and high unemployment: exports. In this year's State of the Union address, he proclaimed a national goal of doubling exports by 2014.
One obvious way to increase exports is through free-trade agreements. But unions don't like them. No surprise then that for two years Obama has been sitting on three free-trade agreements -- with Colombia, Panama and South Korea -- already negotiated by his predecessor.
Under the pressure of dire economic conditions and of the consequences of stiffing three valued allies, Obama appeared ready to relent -- only to put up a last-minute roadblock. He's demanding an expansion of Trade Adjustment Assistance -- taxpayer money (beyond unemployment compensation) given to workers displaced by foreign competition, something denied to Americans rendered unemployed by domestic competition. It's an idea of dubious fairness but nicely designed to hold up ratification, while placing blame on Republican heartlessness rather than on political sabotage by Democrats beholden to unions for the millions they pour into Democratic coffers. (A deal reportedly may be near. But the years of delay have been costly.)
Nothing new here. In 2009, Obama pushed through a federally run, questionably legal, bankruptcy for the auto companies that robbed first-in-line creditors in order to bail out the United Auto Workers. Elsewhere, Delta Air Lines workers have voted four times to reject unionization. A federal agency, naturally, is investigating and, notes economist Irwin Stelzer, can order still another election in the hope that it yields the answer Obama's campaign team wants.
But Democratic fealty to unions does not stop there. Boeing has just completed a production facility in South Carolina for its new 787 Dreamliner. The National Labor Relations Board, stacked with Democrats, is trying to get the plant declared illegal. Why? Because by choosing right-to-work South Carolina, Boeing is accused of retaliating against its unionized Washington state workers for previous strikes.
In fact, Boeing has increased unionized employment by more than 2,000 at its Puget Sound plant. Moreover, the idea that a company in a unionized state can thus be prohibited from expanding into right-to-work states by a partisan regulatory body is quite insane. It violates the fundamental principle in a free-market economy that companies can move and build in response to market conditions, rather than administrative fiat.
Last year Wisconsin gave Republicans control of both legislative chambers and elected a Republican governor who attempted to carry out his promise to rein in public-sector union power.
Democrats found a pliant judge to invalidate the law. A famous victory, but short-lived. On Tuesday, the Wisconsin Supreme Court overturned the ruling, upbraiding the judge for having "usurped the legislative power which the Wisconsin Constitution grants exclusively to the Legislature." The law is reinstated.
Instructive cases all, demonstrating how those who lose popular support -- Democrats at the polls, unions in their declining membership -- can subvert and circumvent the popular will by judicial usurpation (Wisconsin) or administrative fiat (Boeing).
The Wisconsin maneuver ultimately failed, as likely will the assault on Boeing. In the interim, however, there is collateral damage -- to U.S. exports, to the larger economy, to bankruptcy law, to free trade, to a constitutional system wherein the legislatures make the laws, rather than willful judges and partisan regulators.
But what are those when there are unions to appease and elections to win?