Thomas Geoghegan Again!

The labor lawyer, Thomas Geoghegan had a busy day--an op ed piece in the Wall Street Journal and another in the New York Times. The latter is about increasing social security benefits. Based on his reasoning, government can tax and spend us into prosperity. Again, I will quote his ending--he seems to save his strongest statements for the end--"A bigger pension--a raise in Social Security benefits--is the stimulus this demoralized country needs. Come on, Democrats: think of F.D.R., Robert Wagner, or heck, even Lyndon B. Johnson. Let's ask ourselve: Who are we for?"

Is Boeing a Threat to American Entierprise?

Today's Wall Street Journal has an op ed piece by a labor lawyer concerning the National Labor Relations Board unfair labor charge against Boeing. Boeing has built a plant in South Carolina instead of the state of Washington. Mr. Goeghegan argues that Boeing is moving for lower-cost labor, and that this means lower-skilled labor. He seems quite willing to assume that labor in South Carolina is lower skilled than labor in the North. He claims that the move is a signal that quality will fall and will harm Boeing in the long run. Further, it will hurt the American enterprise system. He ends the essay, "If a single story in the news can sum up the reasons for America's global decline, it's the decision build a Dreamliner that will gut the American dream."

There are several flaws in his arguments. First, in free markets, higher wages would usually indicate higher skilled labor, but the difference between Boeing's plant in Washington and the new plant in South Carolina reflects differences in union wages and nonunion wages. The wage difference does not necessarily reflect productivity differences. Does Mr. Geoghegan also believe that the quality of the Mercedes built in Alabama is necessarily less than those built in Germany? Second, at least part of what Boeing seems to be trying to prevent is work stoppages due to strikes. Third, it is always amazing when an outside person knows what is in the long-term interests of a corporation better than the management team of the firm.