Coyote Blog

A while back I (for a short time) chaired an effort to get a ballot initiative in Arizona to change to Constitution to allow gay marriage.  In the process, gay rights advocates approached me for support of another law to add LGBT persons to the list of protected classes that are covered by workplace discrimination laws.

I refused to help, and these folks immediately labeled me a hypocrite.  To be fair to them, they honestly thought that workplace discrimination laws did exactly what they intended to do - ban workplace discrimination of an overt sort (e.g., "what, you're gay?  Well, you can't work around here any more").  But anti-discrimination law has a lot of other unintended consequences that are all bad for even the most fair-minded business owner.

Because most of the actual stories I have been through are (and should be) confidential, I will illustrate the problem from a story out of the national news.

Debbie Wasserman Schultz is Chair of the Democratic Party.  Several years ago various party members became dissatisfied with her leadership, a pretty normal occurrence for such a position, particularly after Congressional losses in several elections.  I compare the job to that of an NFL coach, who has job security only as long as he is winning (see: Jim Harbaugh in San Francisco).

Wasserman Schultz’s position as the head of the DNC has long been a source of contention among Democrats, and Politico has previously documented the issue. In September 2014, Wasserman Schultz’s gaffes caught up to her when a string of Democrats voiced their distaste for the way the Florida congresswoman had led the party.

That report found tension between Wasserman Schultz and Obama dating back to 2011 .... At the time, Wasserman Schultz had allegedly complained to Obama about not being able to hire a donor’s daughter to work for her at the DNC.

“Obama summed up his reaction to staff afterward: ‘Really?’ ” according to a source that was present.

So maybe Obama didn’t like Wasserman Schultz’s brashness or her propensity to spout gaffe after gaffe.

So, faced with threats of losing her position based on poor job performance, her response was this:

Democratic National Committee Chairwoman Debbie Wasserman Schultz was prepared to go full force against President Obama if he tried to replace her in 2013.

Wasserman Schultz, according to Politico, was going to accuse Obama of being anti-woman and anti-Semitic — apparently to cover all the bases — if he dared consider replacing her as chairwoman.

There is absolutely no rational reason to believe President Obama wanted to fire her because she was a woman.  Seriously, Valerie Jarrett practically runs the country but Obama doesn't like Shultz because she is a woman?  I would bet that in fact she was hired for the position in large part because she was a woman.  But she was perfectly willing to use the fact that she happened to be in some protected employment classes to try to head off a merit-based firing.

For businesses, this means two things

1. It typically takes much longer to terminate someone in a protected class, because businesses want to make sure they have an absolutely iron-clad case if the termination is later challenged.  For a service business like ours, this sometimes means tolerating dangerous behavior or really bad customer service longer (with all the risks that entails) from someone in a protected group rather than from, say, a white male.
2. A large number of employees in protected groups will file grievances to the state, or even sue, over even the most well-documented and justified termination.  Even when employers win such cases, each one take tens of thousands of dollars in legal fees to win.  As interpreted by courts and state civil rights agencies, anti-discrimination law seems to create burden of proof on the part of employers to prove they did nothing wrong, rather than the other way around.

Recently, the so-called "reality-based community" on the left has developed the theory that US oil companies have purposefully dropped gasoline prices from over $3.00 to $2.00 a gallon solely to help Republican re-election prospects in November.  This notion is so insane as to be, well, insane, and I am not even going to bother fisking it any more than I would bother refuting a flat-earth hypothesis.  OK, I can't resist, here are two quick arguments, by no means comprehensive.

• US oil companies control a minority of world oil supplies, and those folks who do dominate the market (Hugo Chavez, Iran, the Saudis, the Russians) are highly unlikely to be cutting Bush much slack.
• The implication is that either the old, high price or the current low price is somehow an unnatural contrivance.  If the higher price was a contrivance, ie above the normal market clearing price due to some collusion, then we would have been swimming in oil as supplies outstripped demand, and inventories would be overflowing.  If the current lower prices are a contrivance, then demand should outstrip supply and we should have lines at every gas station.  Of course, neither situation has been observed.

So here is this week's message for the Left:  Economics is a science.  Willful ignorance or emotional rejection of the well-known precepts of this science is at least as bad as a fundamentalist Christian's willful ignorance of evolution science (for which the Left so often criticizes their opposition).  In fact, economic ignorance is much worse, since most people can come to perfectly valid conclusions about most public policy issues with a flawed knowledge of the origin of the species but no one can with a flawed understanding of economics.

Postscript: In fact, the more I think about it, the more economics and evolution are very similar.  Both are sciences that are trying to describe the operation of very complex, bottom-up, self-organizing systems.  And, in both cases, there exist many people who refuse to believe such complex and beautiful systems can really operate without top-down control.

For example, certain people refuse to accept that homo sapiens could have been created through unguided evolutionary systems, and insist that some controlling authority must guide the process;  we call these folks advocates of Intelligent Design.  Similarly, there are folks who refuse to believe that unguided bottom-up processes can create something so complex as our industrial economy or even a clearing price for gasoline, and insist that a top-down authority is needed to run the process;  we call these folks socialists.

It is interesting, then, given their similarity, that socialists and intelligent design advocates tend to be on opposite sides of the political spectrum.  Their rejection of bottom-up order in favor of top-down control is nearly identical.

Update:  From Cafe Hayek, letter to the Washington Post

Dear Editor:

Alleging
that today's falling gasoline prices result from a fiendish plot to
keep the GOP in power, Kenneth Jones is certain that "gasoline prices
will go right back up to $2.75-plus after the [November] election"
(Letters, October 2).

If Mr. Jones is correct, he can make a
financial killing.  All he need do is to invest all of his assets going
long in gasoline futures (which are today about 30 percent lower than
they were in late July).  Indeed, he ought even to cash out all the
equity in his house, max out on his credit cards, and borrow heavily
from his brother-in-law so that he can invest as much as possible in
these futures.

He can then contribute his post-election financial bounty to the Democratic National Committee.

Sincerely,
Donald J. Boudreaux