I’m starting to think we are in a Union bubble right now. This is along similar lines of an earlier post I made – regarding the next “down” event being in the govt sector.
Unfortunately, the only way to buy into this bubble is to send your tax money to local governments. Or join a union which supplies labor to local government.
This idea is heaviliy influenced by Mish’s recent rants on unions and pensions. The issue seems to be heating up. Wages and pension benefits are just too high with respect to fundamentals (current labor markets) and and the local governments can’t afford them any more. Something is going to break.
I just can’t see the labor market / tax base supporting such high-priced labor much longer.
The bubble bursts when governments start to declare bankrupcy in order to escape union contractual agreements.
