Barbarians at the Printing Press: The Wall Street Journal as Propaganda by KTK

The Wall Street Journal exists in a bizarre intellectual and publishing space: they hold a commanding position in the heirarchy of newspaper respect and influence, while serving as the quasi-official house organ of the free-market cult, and yet consistently publish the stupidest drivel, demonstrating again and again that they – or at least their most prominent writers – barely understand their own subject and don’t really believe their own ideology. Now, self-serving right-wing hypocrisy is hardly news – in fact, it’s a way of life, at the Journal no less than among their corporate and RNC masters. But the eagerness with which the WSJ – nominally a bastion of objective reporting and the logic of the marketplace – vacates its own ideological commitments in service of the most blatant right-wing and pro-corporate posturing proves how empty are even the loftiest conservative pretensions.

The Journal serves as a case study, then, of the meaninglessness of principle on the right. It will be worth taking a look at occasional examples of their work, in this light, to remind ourselves why it is always so dangerous to take conservatives seriously when their lips are moving.

To that end, we’re creating a new content category: “The Wall Street Journal’s Literary Offenses” (Hat Tip to a worthy predecessor), both to monitor the hapless but not-unread WSJ, and to use it as an example of celebrated right-wing writing that shouldn’t be.

A simple example is today’s column by Logan Robinson, on the Detroit auto industry’s “especially bad union problem”. (Note the assumption that unions are a “bad problem” by definition. But that’s just noise. It gets worse when he thinks he’s making sense.)

How is it that successful executives become so unsuccessful as soon as they move to Detroit? Also, how can we explain that whenever GM, Ford and Chrysler leave our shores, they compete well in foreign markets as varied as Europe, South America and China? What makes them viable competitors as soon as they cross the border?

One can point to state franchise laws, or to the federal government’s Corporate Average Fuel Economy (CAFE) regulations. But the most striking difference appears to be that the Detroit Three are unionized, and the foreign transplants are, overwhelmingly, not. (The exceptions are the transplants that have historic ties to the Detroit Three, like NUMMI, the GM-Toyota venture in California.) Yet the issue can’t just be about wage rates. The foreign transplants pay well, and the UAW has given significant concessions in recent bargaining.

It is perhaps the mode of doing business in a unionized company that remains a crippling disadvantage. The UAW is arguably the most successful industrial union of all time. But its very strength has allowed it to permeate into every aspect of manufacturing in the Detroit Three.

The collective bargaining agreement with the UAW is a heavily negotiated document the size of a small telephone book. It is virtually identical for each of the Detroit Three, owing to “pattern” bargaining, but it doesn’t exist at all in their U.S. competition, the nonunionized transplants. Not only work rules, but fundamental business decisions to sell, close or spin-off plants are forbidden without permission. That permission may come, but only at a price, since everything that affects the workplace must be negotiated.

Both the UAW and the Detroit Three maintain large staffs of lawyers, contract administrators, and financial and human-resources representatives whose principal job is to negotiate with the other side. These staffs are at all levels, from the factory floor to corporate headquarters and the UAW’s “Solidarity House” in downtown Detroit.

The collective bargaining agreements are now renegotiated every four years; in each negotiation the power and penetration of the union grows. If the company asks to change the flow of work for any reason, from cost-savings to vehicle improvements, the local union president will listen politely, and then say something like, “We can help you with this, but what’s in it for my guys?”

Typically, he will have a list of things he wants, some understandable (better cafeterias) some questionable (hire my nephew), but there is always a quid pro quo. These mutually sustaining bureaucracies exist to negotiate with each other.

Let’s pause here to note that those grossly over-unionized autoworkers average less than $60,000 per year under their old contract – in stark contrast to the widely-bandied but utterly false figures of $70/hr and up that the Republicans keep citing. And the UAW – the first union ever to win employer-paid healthcare and annual cost-of-living wage adjustments – has already surrendered its health benefits, unemployment insurance, and retiree healthcare, and has accepted a two-tier wage system in which new hires are paid barely half the hourly wage on the old contract (and no, that’s not half of “$73 per hour”), while also diverting cost-of-living adjustments to pay for their own lost health benefits, and in some years giving COLA up entirely. Even the best-paid workers under the new unequal-wage-tier system will lose close to 10% of wages to inflation over 4 years. And we may as well note that assembly-line workers’ wages have almost nothing to do with the cost of US-made cars, or the failures of management decisionmaking that destroyed the car companies:

Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits. That’s roughly the gap between the Big Three’s retiree costs and those of the Japanese-owned plants in this country. Imagine, also, that the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota.

Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800.

That’s because labor costs, for all the attention they have been receiving, make up only about 10 percent of the cost of making a vehicle. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies, analysts at the International Motor Vehicle Program say. Even so, many Americans no longer want to own the cars being made by General Motors, Ford and Chrysler.

But never mind simple factual inaccuracies, or even the reflexive anti-union/anti-government bias to the point of delusion. What’s striking about this column – and what it illustrates about the Journal and right-wing thinking on business in general – is its complete willingness to abandon any kind of ordinary business thinking to score points off an opponent. Market forces, enlightened self-interest, and simple economic reality are of no consequence when workers stand to benefit in any slightest degree. Capitalism is for capitalists, don’t you know – it’s simply unfair, or even morally wrong, for workers to benefit from a contract.

So . . . “The collective bargaining agreement with the UAW is a heavily negotiated document the size of a small telephone book.” And . . .? Is this actually supposed to be a serious argument? The auto companies are dying because the UAW contract has . . . too many pages? It’s “heavily negotiated“? What the hell does that even mean? That can only have been written by somebody who has never even seen a big-league business deal. The UAW has over a half-million active workers and almost 600,000 retirees; their “contract” is actually over 3,000 contracts with over 2,000 companies, and it covers over $30 billion per year in wages alone, and over $10B in benefit contributions. Of course it’s long and complex. It’s supposed to be. And of course it was heavily negotiated. A fraction of a percent here or there means millions of dollars.

Ordinary commercial construction contracts or commercial asset leases (I’ve seen a few of each – worth far less than the UAW contract) commonly run over a thousand pages, but nobody at the Wall Street Journal would ever begin to suggest that Donald Trump or Boeing should not protect their interests with long contracts that are “heavily negotiated”. It’s obvious what is really going on here: blue-collar workers aren’t allowed to look out for their own interests effectively. They can wave picket signs and maybe mouth a few platitudes about “solidarity” in New Jersey accents, but God forbid that they should hire aggressive, skilled lawyers to “heavily” negotiate for their interests, and protect them with a strong, written contract. An objection that would be an obvious crass stupidity when spoken about anyone whose interests the Journal believes actually matter becomes some sort of business wisdom when raised against the auto-workers’ union. Notice, also, that the “UAW contract” is also the car companies’ contract – there are two parties to every contract, and nobody forced the Big Three to sign this one. It encapsulates their rights and interests as much as the workers’, and it was just as “heavily negotiated” from their side - but the Journal doesn’t seem to think those are drawbacks. The problem with a contract that stipulates obligations and privileges of both the UAW and the car makers, for the Wall Street Journal, is that it includes obligations of the car makers as well as privileges of the UAW; the Journal obviously believes that business contracts – for blue-collar workers at least – should reflect only one party’s interests. They say so in almost literally those words.

“Not only work rules, but fundamental business decisions to sell, close or spin-off plants are forbidden without permission. That permission may come, but only at a price, since everything that affects the workplace must be negotiated.” Unthinkable. Don’t those hourly-wage workers know that they are supposed to just take what they’re given without question? They actually expect to stand up for their own interests and negotiate (“heavily”, no doubt) for what they’ll put up with when they come to work? They think they can treat whether they actually have jobs at all as a condition of work, to be taken into account in their contract? They expect to be paid a price for what they give to the company – as if business transactions were . . . bilateral, or in some bizarre way mutually beneficial?

“The collective bargaining agreements are now renegotiated every four years; in each negotiation the power and penetration of the union grows.” They actually benefit from having a written, enforcable contract? How can that be? They’re workers, for Christ’s sake! And that union . . . it effectively multiplies the power of the individual worker to the point that they actually have influence over their own working conditions?! The companies are legally required to live up to the contracts they sign with their own workers? What the hell is going on here?!

“If the company asks to change the flow of work for any reason, from cost-savings to vehicle improvements, the local union president will listen politely, and then say something like, ‘We can help you with this, but what’s in it for my guys?’” This is an outrage! The workers expect to be given something they want in return for giving the company something it wants! Their union actually demands it for them, as if they had a right to nominate someone to speak up for them and actively protect their interests! The workers do in fact do whatever the company wants – as they were born to, of course – but they expect to be compensated for it! And it’s that damn union that put these ideas in their head!

“. . . there is always a quid pro quo.” Bilateral contracts, again! Is there no end to it?!

You see, business isn’t really business – economics isn’t really economics – where the interests of the little people are concerned. Sure, Adam Smith wrote his precious fable about how children could buy bread safely from merchants without fear of being cheated because the invisible hand of the marketplace would hover protectively over them, but we all know, in fact, that the invisible dick of the marketplace is guaranteed to give it to the workers up the back way, now and forever, by immutable law and God’s own plan. Contracts, negotiations, quid pro quo – those are terms for the big people. They don’t apply to hourly wage earners, blue-collar workers, the non-college-degreed. It is actually unbusinesslike to negotiate for your interests, demand enforcement of contracts, or exact compensation for performance – if you’re part of the class that is fated to be dictated to by the “real” business people who subscribe to the Wall Street Journal.

Again, nobody would imagine raising objections like these to “real” contracts between parties to a “real” business arrangement. But working-class grunts aren’t supposed to have contracts in the first place. They’re supposed to exist as glorified day-laborers under “at-will” termination-without-cause rules, working under conditions dictated unilaterally by their employers. So the fact that the UAW actually has a contract – let alone a two-thousand-page contract that was heavily negotiated (Christ, I just can’t get over the smug stupidity of that phrase) – is in some way a violation of natural law; the contract is simply unenforcable by right, in the same way that you can’t make a perfectly efficient heat engine. And the UAW’s grinding insistence on getting paid, all the time, for each and every thing they do is greedy and obstructive. The idea that the car companies would occasionally just give away a vehicle for free, on whim, would be ludicrous – but the idea that the UAW would accept contract givebacks and increased work demands without expecting a quid pro quo is perfectly natural . . . to the Wall Street Journal.

So economic law gets suspended, by the Journal, whenever it needs to – which is to say when it needs to defend the interests of its chosen class against those of people who actually need the money they have earned or saved. And in this way, its claimed devotion to “the market” and to “economic reality” is as much a sham as its pretense of believing George Bush’s policy statements. The Journal is not, in the end, a business newspaper. It is a propaganda sheet in the class war. “Business”, and the means and mechanisms of business, are only props and camouflage; they are rules and principles that can be invoked as weapons, but which do not have to be obeyed as constraints, if it is inconvenient to those who have laid claim to those terms and principles as their exclusive property.

“These mutually sustaining bureaucracies exist to negotiate with each other.” Actually, the UAW and the car companies exist as adverse parties in a business arrangement. Neither seeks the other’s interest; both seek their own – in which sense they behave precisely like any other contracted parties to any other mutually beneficial, but zero-sum, arrangement. Anyone who understood business could have explained that. Hopefully, the Wall Street journal and its editorial staff will run across such a person, someday, and learn something.