By Robert F. Sanchez, JMI Policy Director
No industry has been harder hit by the recession than home construction. Most builders have struggled to survive. Some cut back. Others filed for bankruptcy. Few had much work coming their way as the wave of foreclosures and the inventory of unsold homes continued to grow, depressing the demand for new construction. Indeed, job losses in home construction have been a major contributor to the stubbornly high rate of unemployment.Worse, even the outlook for a quick recovery is clouded because new regulations governing mortgages have made home loans harder to get – even for buyers with impeccable credit records. So it’s ironic that on the same day last week when President Obama delivered his “jobs speech” to a joint session of Congress, the Wall Street Journal published a front-page story under the headline “U.S. Hits Builders with Pay Probe.”As the story by reporters Melanie Trottman and Robbie Whelan explains, the Obama Administration’s union-friendly Department of Labor has sent letters demanding detailed payroll records from prominent homebuilders such as Pulte, Lennar, and KB. The Journal story reports that the feds demanded that the companies “immediately turn over the names, addresses, Social Security numbers, pay rates and hours worked for all employees over the past two years.”In addition, the feds’ letters “asked the names of all contractors hired in the past year,” although they “didn’t allege any specific violations of the law.” In other words, it’s a fishing expedition, made at the behest of union bosses who have long been upset that some of the homebuilders’ contractors employ non-union labor – especially in right-to-work Sun Belt states such as Texas and Florida, where much of the nation’s homebuilding occurred prior to the recession.Unfortunately, this may be one of the costlier fishing expeditions since Captain Ahab went looking for Moby Dick. According to the spokesman for the industry’s trade group, Leading Builders of America, “the requests could require thousands of hours of work” and the feds’ action “is especially troubling given that no issues have been identified to warrant an investigation.”You might think the U.S. Department of Labor – and the independent National Labor Relations Board – might have better things to do, given the outbreak of thuggish union misbehavior at a port in Washington state. There, members of the International Longshore and Warehouse Union (ILWU) held security guards hostage the other day while they blocked a train line and vandalized rail cars and a grain depot that had the temerity to deal with a different union.Yet the feds’ action and inaction on issues relating to union violence should come as no surprise when President Obama and his spokesmen have declined numerous opportunities to condemn remarks made within earshot of Mr. Obama by Teamsters Union President James P. Hoffa – remarks widely interpreted as rationalizing union violence.Meanwhile, the Labor Department’s harassment of the nation’s major homebuilders is a reminder that there’s a dark side to Washington, D.C.’s “crony capitalism” as practiced in recent years by some in both political parties. Not only is it a system wherein the government intervenes in the marketplace in an effort to pick winners by bestowing favors on its cronies and contributors, but it’s also a system wherein it creates losers by harassing those who are not its friends. This is the antithesis of economic freedom and, if it continues, it could well be a threat to our constitutional system rooted in the rule of law.
2011
