Industrial America's suicide pact.

• Author: Keisling, Phil
• Position: Making America Work

At the time the Monthly was founded one of the most conspicuous characteristics of American liberals was their unwillingness to say anything bad about the good guys. Preeminent among these good guys were the unions, the great heroes of the New Deal coalition who had fought for social justice against the hired thugs of the mine owners and the auto companies. But in the seventies, stupid policies by labor unions were just as much a factor in our declining competitiveness as the short-sighted selfishness of managers. And we said so.

Phil Keisling 's article was a prescient look at how management and labor were to blame for the decline of industrial America. This piece appeared in 1982.

Healthy, often profitable businesses are being debilitated and even killed off by corporate managers bent on maximizing short-term return to please Wall Street investors. Their concern is not with profit but with how much profit; not with the long-term health of an enterprise but with its ability to contribute to a dazzling quarterly earnings report. Belden Daniels, a professor of urban planning at MIT, observes: "Plants are closing that don't have to because we've trained our corporate managers to maximize their rate of return-not in ten years, not over one year, but over 90 days. Period. And it's killing us."

Unions show similarly self-destructive tendencies. Rather than moderate wages and benefits that have priced their employers' products out of the market, unions too often sacrifice their members' jobs to preserv"integrity" of contracts. The attitude is best summed up by Peter Kelley, a UAW member and founder of a group called Locals Opposed to Concessions, who told The Wall Street Journal "It is our firm belief that it wasn't our wages or benefits that caused the auto industry's problems in the first place. It was management." Think about that. Even if Kelley is correct, assigning the blame won't save jobs, and saving jobs is what we need to do.

There are several explanations for the unions' reluctance to make substantial concessions. The most obvious is the traditional animus between the two parties, fueled by memories of bad-faith bargaining. Unions deeply suspect that companies are using the recession to break them or to exact concessions they could not get otherwise. Union leaders also are understandably outraged at the extravagant salaries that corporate executives receive, most of which bear no relationship to actual performance.

But there's another...