Mish's Global Economic Trend Analysis

Workers Handed Victory Over Unions: Supreme Court Rules Government Cannot Force-Unionize Workers Into State Entitlement Programs
Much Ado About Nothing
New Orders for Manufactured Goods Down More than Expected, Inventories Up 18 of 19 Months, Highest Since 1992

Workers Handed Victory Over Unions: Supreme Court Rules Government Cannot Force-Unionize Workers Into State Entitlement Programs

Posted: 02 Jul 2014 11:15 PM PDT

In contrast to the highly ballyhooed but Much Ado About Nothing Supreme Court ruling on Obamacare, the court issued a far more meaningful ruling on forced unionization on the same day.

Paul Kersey at the Illinois Policy Institute explains by email:

The U.S. Supreme Court has issued a groundbreaking ruling today on the case of Harris v. Quinn. The court's ruling states that state governments cannot force-unionize participants in state entitlement programs or force them to pay union dues as a condition of receiving help from the state.

The court's 5-4 decision was in favor of the plaintiff Pam Harris, a mother from suburban Chicago who takes care of her disabled son and participates in a state Medicaid program. The justices ruled that Medicaid beneficiaries and people participating in state entitlement programs are not state employees, and cannot be forced into a union or forced to pay union dues.

For more than a decade, government unions have been forcing people who are not state workers – moms and dads caring for children with developmental disabilities, home day-care providers for low-income children and others – to pay dues to a union as a condition of receiving help from their state governments. Both Gov. Pat Quinn and now-disgraced former Gov. Rod Blagojevich issued executive orders allowing the unionization of people who were not state workers. This resulted in Illinois government unions making $20 million a year from these workers, many of whom never wanted to join or pay dues to a union in the first place.

Fortunately, today the U.S. Supreme Court has affirmed that plaintiff Pam Harris won't have to jeopardize and limit her son's care by being forced to join a union she does not want, agree with or support.

Paul Kersey
Director of Labor Policy

Victory!

Kersey wrote a more detailed op-ed that appeared in USA Today: Workers Handed Victory Over Unions.

This victory is a big step in the right direction. Unfortunately the court did not make the final step of mandating national right-to-work practices and eliminating forced union dues altogether.

It should have. As Kersey explained in his op-ed...

The court could have gone further. Government union bosses want to organize as many people as possible — even those who aren't government employees — because they can usually force the people they represent to pay union dues. Harris' attorneys were hoping the court would rule that no government employee can be forced to pay dues as a condition of employment.

The court instead opted for a stern warning that unions have no business extracting dues from people who aren't even employees. Union officials should take heed: the U.S. Supreme Court is putting more limits on mandatory union dues. Soon, the high court may rightly decide that forced dues are unconstitutional and do away with them entirely.

Congratulations to Pam Harris for her well-deserved victory over union thugs extorting payments from non-employees

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Much Ado About Nothing

Posted: 02 Jul 2014 12:43 PM PDT

Republicans and Democrats alike trumped up the meaning of Monday's 5-4 Supreme Court ruling "closely held companies cannot be compelled to offer their employees birth control as part of the law if they object to the provisions on religious grounds".

Republicans acted as if this was a major repudiation of Obamacare. It wasn't. Rather, the Supreme Court made a reasonable ruling on religious beliefs.

Yet, step back a moment and note the hypocrisy of Hobby Lobby, one of the companies that took Obamacare to court over the mandate.

My friend Dave puts it this way:

"Hobby Lobby is obviously hypocritical as they do business in China, a country with contraception, abortion, and even forced late term abortion accomplished sometimes by brutal means -- and where infanticide, although illegal, is also widely practiced. If they are true to their beliefs, they should pull out of China. Moreover, the whole Republican attack on contraceptives -- not abortion, but contraceptives -- is completely bewildering to me."

Exactly. Religion and hypocrisy frequently go hand-in-hand, as do politics and hypocrisy.

Obama's Over the Top Response

While Republicans gleefully overplayed the significance of the ruling in one direction, Obama and the Democrats chose to outdo them with political hyperbole in the opposite direction.

"If the Supreme Court will not protect women's access to health care, then Democrats will," said Senate Majority leader Harry Reid.

The White House stated the "Ruling Jeopardizes the Health of Women".

CNBC quoted the White House as follows: "The executive branch will also consider whether the president can act on his own to mitigate the effect of the Supreme Court ruling."

And that statement played straight into Republican hands, rightfully fearful of more Obama-Mandates in lieu of real legislation.

How Obama Should Have Responded

Obama should have mentioned disappointment over the ruling.

Next, he should have made a statement that he would work with Congress to "improve" the bill instead of making threats to "act on his own".

Finally, the president could have and should have pointed out that birth control pills are available at Planned Parenthood for perhaps as little as $15 a month and that an emergency morning after pill is available for $35.

Questions of the Day

Is there much of anything to "mitigate"?
Is anyone's health really in "jeopardy" over the ruling?
Was Obama unwise to require companies pay for birth control if they did not want to?
Is this the end of Obamacare?

In order, the answers are no (very few people are likely to be affected), no (contraception is widely available for low cost to the few who are affected), yes (Obama knew this challenge was coming), and no.

The reaction from both sides is much ado about nothing, and everything to do with politics accompanied by extreme hype, as usual.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

New Orders for Manufactured Goods Down More than Expected, Inventories Up 18 of 19 Months, Highest Since 1992

Posted: 02 Jul 2014 09:59 AM PDT

The Department of Commerce report on Manufacturer's Shipments, Inventories, and Orders released today shows new orders for manufactured goods were down following three consecutive increases, while inventories were up for the 18th time in 19 months.

Report Highlights

New orders for manufactured goods in May, down following three consecutive monthly increases, decreased $2.6 billion or 0.5 percent to $497.7 billion.
Excluding transportation, new orders decreased 0.1 percent.
Shipments, up four consecutive months, increased $0.3 billion or 0.1 percent to $498.3 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.4 percent April increase.
Unfilled orders, up thirteen of the last fourteen months, increased $6.7 billion or 0.6 percent to $1,087.4 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.9 percent April increase.
Inventories, up eighteen of the last nineteen months, increased $5.0 billion or 0.8 percent to $651.5 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.5 percent April increase.
The inventories-to-shipments ratio was 1.31, up from 1.30 in April.
Inventories of manufactured durable goods in May, up thirteen of the last fourteen months, increased $3.6 billion or 0.9 percent to $397.5 billion, revised from the previously published 1.0 percent increase. This was at the highest level since the series was first published on a NAICS basis and followed a 0.2 percent April increase.

Stage Set for Huge Slowdown

Inventories, shipments, and unfilled orders are highest levels ever on a NAICS basis that dates back to 1992.

The North American Industry Classification System (NAICS, pronounced Nakes) was developed as the standard for use by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the business economy of the U.S. NAICS was developed under the auspices of the Office of Management and Budget (OMB), and adopted in 1997 to replace the old Standard Industrial Classification (SIC) system. It was also developed in cooperation with the statistical agencies of Canada and Mexico to establish a 3-country standard that allows for a high level of comparability in business statistics among the three countries.

The stage is set for one heck of a slowdown when customer demand sinks.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Mish's Global Economic Trend Analysis

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