More economics questions

[Bob The Mercenary]

I figured instead of going around taking other threads off the rails with my questions, I could pool them all here instead. There are also a couple articles I would like to link, so this will avoid some unorganization.

This first article (http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aaaBdVMkjPnU) is kind of creepy, if not a complete hyperbole.

June 8 (Bloomberg) -- I’ve finally figured out the Obama economic strategy. President Barack Obama and his team have been having so much fun wielding dictatorial power while rescuing “failed” firms, that they have developed a scheme to gain the same power over every business. The plan is to enact policies that are so anticompetitive that every firm needs a bailout.

Once that happens, their new pay czar Kenneth Feinberg can set the wage for everybody and Rahm Emanuel can stack the boards of all of our companies with his political cronies.

I know, it sounds like an exaggeration. But look at it this way. If there were a power ranking of U.S. companies, like the ones compiled by football writers for National Football League teams, Microsoft would surely be first or second to Google. But last week, Microsoft Chief Executive Officer Steve Ballmer came to Washington to announce what Microsoft would do if Obama’s multinational tax policy is enacted.


Over the top, and I'm not one of those who huddles in his fallout shelter with a gun worrying when Obama Vader will come to take over his stuff, but it's been making too much sense to me lately. The same can be said about nationalizing healthcare. If that ever becomes a reality doesn't that pretty much give the government the opportunity to regulate every aspect of your life under the guise of cutting costs? Example, not allowing your kids to play in the pool for fear they might accidentally hurt themselves or drown (a little extreme I know, just trying to illustrate).

U.S. firms have nonetheless prospered because our tax code allows a business to set up a subsidiary in a low-tax country. When that subsidiary earns profits, they are taxed at the rate of that country, and don’t face U.S. tax until the money is mailed home.

Whenever I've brought this up I've been shot down by people saying that lowering taxes on businesses would destroy the country. Then, on the flip side I've been told raising taxes on businesses would destroy the country. That's too much pressure! Anyone care to clear this up? I have been rooting through my local B&N for books on economic history and philosophy so I can be more prepared in the future for debates such as this.

The second thing I wanted to ask about is a little more...sketchy. And I apologize for bringing this blight upon the hallowed grounds of the boards, but today I committed the mortal sin of listening to a half hour of Rush Limbaugh. The thing was, it was a very convincing half hour where he talked about the press conference from yesterday, talking about the new unemployment rate. I'll save you from reading the entire transcript by posting snippets here, but I'll link the transcript (http://www.rushlimbaugh.com/home/daily/site_060909/content/01125110.guest.html) as well. The reason I'm linking it is because he made it seem like a complete clusterfuck, and reading back on the actual press conference, that's how their answers did sound.

RUSH: Yesterday at the White House, Vice President Biden's chief economic advisor, Jared Bernstein, held a press conference to talk about the new unemployment rate and the economic stimulus package. And during the Q&A, Jake Tapper of ABC says, "In January you and Dr. Romer issued your recommendation for the stimulus. It turned out to be rather optimistic. I think it's fair to say you said without the stimulus the unemployment rate will be just over 8%. Obviously it's 9.4% with your stimulus. How do you explain that?"

BERNSTEIN: That was before we had fourth quarter results on GDP, which we later found out was contracting at an annual rate of 6%, far worse than we expected at that time. Were this plan not to be implemented as I've described and as Dr. Romer and I articulated back then, in the absence of the plan, job losses would have been deeper from whatever level they started, job looses would have been deeper, the unemployment rate would have been, by our estimates by the end of next year, would have been between one-and-a-half and two points higher than it otherwise will be. So those estimates that we are touting today and the estimates that you hear us talk about, that's the difference between what would have happened to the job market, the unemployment rate were this plan not in effect and the actual outcomes of jobs. Now, looking back, it was clearly too optimistic.

RUSH: This is flat-out pap. This is rigmarole. This is BS, plain and simple BS. You just heard Biden's economic guru explain that their estimates on unemployment were wrong because it was Bush's fault, the fourth quarter of 2008 was worse than they thought, and, by the way, it would be worse than ever if we hadn't done what we did, that they were too optimistic. They are not optimistic at all. They talk optimism. They implement plans that are based upon pessimism. They implement plan and plan after plan that is destroying the US economy. It is destroying the opportunity for the American dream for millions of Americans who don't yet realize that their pursuit of the American dream is in the process of being destroyed. They will learn this, sadly, soon enough. This is how it's done. "Hey, we didn't know how bad Bush left it." I knew they were going to do that with Iraq, they were going to do it with Club Gitmo, "Well, we didn't know how bad it was, Bush didn't really tell us. The economy was so bad, we had no clue. Our plan, why, if we hadn't done our plan, it would be even worse."

One more Jared Bernstein, this time the question came from Bloomberg News' Hans Nichols: "Those summer jobs, that 125,000, are you counting that toward the 600,000 jobs you're going to be saving or creating?"

BERNSTEIN: Yes.

NICHOLS: Are you also going to be counting that towards the 3.5 total goal?

BERNSTEIN: That is -- yeah, that -- the 3.5 is the, uh, the 3.5 is an estimate of jobs created or saved by the end of, uh, of next year.

NICHOLS: What you're obviously acknowledging are temporary jobs over the summer which won't last three months --

BERNSTEIN: Oh, that's a good question, right.

NICHOLS: How that's being counted in the 3.5?

BERNSTEIN: Thank you. Now, that's a good question. The 3.5 million jobs are what economists call full-time equivalent jobs. So those 125 would not count as a full 125. Two part-time jobs count as one full-time equivalent job.


I want to stress that I didn't create this thread to argue any points, only to get answers. I know approximately dick about economics. Is there something about this I'm missing or does none of this actually make any sense? I have a mean habit of missing the big picture.

With so many objections I have to the President's policies, it would be nice to know if I'm basing my opinions off of faulty "facts".

[01d55]

The same can be said about nationalizing healthcare. If that ever becomes a reality doesn't that pretty much give the government the opportunity to regulate every aspect of your life under the guise of cutting costs? Example, not allowing your kids to play in the pool for fear they might accidentally hurt themselves or drown (a little extreme I know, just trying to illustrate).

Healthcare has been nationalized in Canada and every nation in Europe. We know exactly what things happen when healthcare is nationalized and government prohibiting children from playing in pools is not one of them.

[Kepor]

To quote from TVTropes:

The nice thing about Mathematics and other Hard Sciences is that there is no question that 2 + 2 = 4.

The complicated thing about Sociology and other Social Sciences is that there's room for interpretation and debate.

The horrifying thing about Economics is that both of these are true.

I actually caught most of that session on CSPAN, and what happened was that Bernstein, an economist, was trying to talk to reporters, who are not economists. Although economics uses mathematical analysis to determine hard numbers, it is going off of a social issue, money. So those numbers are going to be uncertain. Reporters do not like uncertain.

I only have basic knowledge about economics, so I can't say much about how they reached these numbers. I can say that uncertainty is basically a part of dealing with economics, so get ready for some confusion.

[bluestarultor]

Last quote seems sensible to me. Second to last quote is Rush, and honestly, the man is full of shit. He's spewing bile like usual, and he's not even making sense while doing it. The estimates make some amount of mathematical sense to me, and you'll notice how Rush doesn't mention any numbers or really try to refute anything. He just spews bile and cries anti-Bush and attacks things he clearly can't get whoever is listening to disbelieve with idle threats.

[Bob The Mercenary]

To quote from TVTropes:



I actually caught most of that session on CSPAN, and what happened was that Bernstein, an economist, was trying to talk to reporters, who are not economists. Although economics uses mathematical analysis to determine hard numbers, it is going off of a social issue, money. So those numbers are going to be uncertain. Reporters do not like uncertain.

I only have basic knowledge about economics, so I can't say much about how they reached these numbers. I can say that uncertainty is basically a part of dealing with economics, so get ready for some confusion.

Actually, that's a very nice explanation that I've never heard before.

Last quote seems sensible to me. Second to last quote is Rush, and honestly, the man is full of shit. He's spewing bile like usual, and he's not even making sense while doing it. The estimates make some amount of mathematical sense to me, and you'll notice how Rush doesn't mention any numbers or really try to refute anything. He just spews bile and cries anti-Bush and attacks things he clearly can't get whoever is listening to disbelieve with idle threats.

Par for the course. :) I still don't get how they calculate "saved" jobs, though. This whole "create or save" notion feels like a copout, just in case no jobs are actually created.

[Kepor]

Yeah. In order for this to make sense, you're gonna have a lot of reading ahead. If it's something you find interesting, though, it'll be worth it.

Found the transcript (http://www.whitehouse.gov/the_press_office/Briefing-by-Press-Secretary-Robert-Gibbs-with-Jared-Bernstein-the-Vice-Presidents-Chief-Economist-6-8-09/) of the briefing from yesterday. Bernstein's section is right at the beginning and goes until about halfway through.

[Jagos]

Par for the course. I still don't get how they calculate "saved" jobs, though. This whole "create or save" notion feels like a copout, just in case no jobs are actually created.

I agree on this one. The private sector begins to lose jobs and magically the government intervenes, causing chain reactions that we don't necessarily see. While they save a job in one section twenty jobs might be lost in another. It's just more horsepuckey that makes people feel better.

Whenever I've brought this up I've been shot down by people saying that lowering taxes on businesses would destroy the country. Then, on the flip side I've been told raising taxes on businesses would destroy the country. That's too much pressure! Anyone care to clear this up? I have been rooting through my local B&N for books on economic history and philosophy so I can be more prepared in the future for debates such as this.

Economics is always confusing. I can't simplify everything but it basically goes in how some people believe in supply-side economics and others believe in demand economics.

Make it easier for business to conduct, subsidies and easing of taxes, everyone benefits. They charge lower prices, imports become cheaper, etc. This view is usually held by Republicans.

There's a belief in tampering with the demand curve as well. This goes to Democrats mostly. If you can convince people to spend, it drives prices down. Think about how Obama wants the entire US to go green, thereby making it all cheaper than the alternative of coal. If EVERYONE is using it, it'll make the price go down.

One word of caution, if you mess with the supply side of business (taxing business) those taxes do come back to consumers. Usually in the form of higher prices. Think how Obama took away the subsidy for offshore drilling, which stopped Chevron (or whomever) to stop drilling when it was too pricey.

Not that I'm for or against either way of thinking, but the results from an economist's POV will be right there.

Oddly, I was looking to link that article myself because though it's an opinion, it does have some good points, such as:
The U.S. now has about the highest combined corporate tax rate, second only to Japan among industrialized countries. That rate is so high that U.S. firms have an enormous disadvantage versus competitors. The average corporate tax rate for the major developed countries in the Organization for Economic Cooperation and Development in 2008 was about 27 percent, more than 10 percentage points lower than the U.S. rate.

You begin to tax too much and businesses move to newer places. It just happens. And who would invest if the laws don't allow it?

[AnonCastillo]

Here's a basic model for how government interaction in the economy works:

Government spending both takes money out of the economy and puts money back into the economy.

There are two main forms of government spending (assuming I haven't forgotten any): Direct spending and subsidizing. Direct spending is when the government purchases something the same way a consumer would (ie. the government buys a tank from GM, or whoever makes tanks), and has the same basic effect as any spending by consumers: some is given money in exchange for production. (it should be noted that, if economics were a philosophy, money would be a representation of how much more you have produced for society than society has produced for you, at least in a perfect capitalist society) Subsidies sometimes pay a company or industry not to do something, ie. paying farmers to leave a portion of their land fallow to insure that we don't get droughts, sometimes they are there to support a company or industry that the government wants to encourage, ie. less developed countries subsidizing industries that they think will help modernize them, or help a company or industry that is not as successful as the government wants it to be, ie. "corporate welfare" and the recent bailouts. Unlike direct spending, subsidies do not pay anyone for being productive: at best, they are an investment or insurance policy, at worst, they are the rich robbing the poor through taxation.

The government has three main ways of making money: taxes, borrowed money, and printed money. Taxes take money directly out of the economy, ie. they remove money that would otherwise be spent on production. Borrowed money can come from a few different sources, including foreign countries, banks, selling savings bonds/war bonds/etc., generally in the US it is borrowed from banks and wealthy investors, so either way it is tying up money that would otherwise be invested in the economy. Printing money causes inflation. Inflation is the phenomena where a certain amount of money loses value over time, ie. $5 today doesn't buy nearly as much as it did 20 years ago. When you increase the amount of money in the money supply (or, at least, when you do so faster than the relative increase in the amount of productivity going on in the economy), each dollar printed causes each other dollar that already exists to become worth slightly less than it was.

So the basic equation here is that in order for the government to spend money, it has to take money out of the economy somehow, and despite the dubious claims of some guy named Keynes, taking money out of the economy for the sake of government spending generally leads to inefficiency, or less production, and therefore less actual worth in the economy. Sometimes, in the case of farm subsidies to maintain the long term health of our farmlands or helping an industry get off the ground, it can be argued that you have a short term loss in exchange for long term gain/savings, although in the case of corporate welfare and industry bailouts such claims are very shaky.

In the case of direct spending, the government can arguably do a better job than the private sector in spending on some areas, ie. we would most likely not have nearly as effective a national defense if left up to the private sector, and although I've read some arguments in favor of privatizing the roads I haven't seen a free market system suggested that would work for anything but major highways, and I'm not convinced it would be more efficient. Nationalized health care could be far more efficient than the current US system, especially if competition among doctors and hospitals were encouraged the way the British system does it, but that's largely because the US system is not a capitalist one, it's a corporatist one, and corporatism is the reason that a significant portion of government spending is so inefficient.

Under a capitalist system, which is what the US claims to have (our health care system hasn't been capitalist since 1971, btw) but doesn't really, is a system where businesses make a profit solely by producing a good/product or service that consumers desire and by selling that product at a price that is affordable enough that consumers will buy their product over a competitor (or, if you can't make it cheaper, make it better so consumers consider themselves to be getting a better deal for their money), with no regulations on price and no regulations restricting entry into the market (ie. anyone with enough money can start a business to sell anything it's legal to sell). A corporatist system is much more heavily regulated, with the catch that industry leaders have a heavy hand in the formation of the regulations that govern their industry. Our health care system is an example of corporatism; if you've seen Michael Moore's Sicko, he talks about a law Nixon signed in 1971 that created HMOs and took a significant amount of choice and power away from consumers/patients and producers/hospitals and placed that power in the hands of HMOs and insurance companies, basically forcing a middle man on the majority of consumers and taking decisions of what treatment would be given away from producers and giving it to the middle man making money off of it. In addition, most decisions on what companies the government should purchase from/give contracts to are made by politicians who take massive campaign donations from the top officials of the companies bidding on them, which often leads to spending decisions being made for reasons other than efficiency.

Without corporatist influence, even a more socialized/nationalized economy would be much more efficient, although in my opinion capitalism would be even more efficient.

[Eldezar]

Over the top, and I'm not one of those who huddles in his fallout shelter with a gun worrying when Obama Vader will come to take over his stuff, but it's been making too much sense to me lately.

This particular scare tactic has been said about just about every President. However, regardless of whether I like a President or not, you really do want to have your guns just in case. That's what the right to bear arms is all about.

The same can be said about nationalizing healthcare. If that ever becomes a reality doesn't that pretty much give the government the opportunity to regulate every aspect of your life under the guise of cutting costs? Example, not allowing your kids to play in the pool for fear they might accidentally hurt themselves or drown (a little extreme I know, just trying to illustrate).

My answers to this are the same as every question about government run businesses. First off, Americans own very little of America. At least 90% of our ports are owned by other countries, most of our toll roads are owned by other countries, China owns a good number of our banks and businesses; so I say, if a government is going to own our businesses, wouldn't you rather it be your own government?

I find it very strange how everyone complains about the U.S. government bailing out and nationalizing everything, and yet hardly anyone ever complains when another country comes in and buys something.

Lastly, I am all for Socialism, but only if the people control the government. People control the government, government controls businesses, therefore people control the businesses. Again this goes back to the U.S. Constitution; Power to The People. At this point in time, The People have very little power.


Whenever I've brought this up I've been shot down by people saying that lowering taxes on businesses would destroy the country. Then, on the flip side I've been told raising taxes on businesses would destroy the country. That's too much pressure! Anyone care to clear this up? I have been rooting through my local B&N for books on economic history and philosophy so I can be more prepared in the future for debates such as this.

History-wise I can't say too much about. I can say this; Business owners are greedy. If we lower taxes on the businesses, most of the money saved is going to go into bonuses for the fat cats. If we raise taxes on the businesses, most of the money lost is going to be transferred upon the consumer with higher prices along with decreased wages for the employees, just so that the board of directors can keep their outrageous salaries. This is only the black and white statement, there is much more to it than that, but my facts on the rest of it are not together at the moment.

I am all for higher taxes on the businesses, and here is part of the reason. Liberals also push for an increase in minimum wage. Requiring businesses to pay their employees more is similar to increasing their taxes; either way that is more money that the company does not have. It HAS been proven that keeping minimum wage at a decent rate is very good for the economy, and many businesses that pay their employees more thrive much better than those that pay less.

Similar to how minimum wage means more money in people's hands, therefore more money to spend at these businesses, therefore more profit; higher taxes on the businesses do the same thing. Somehow, that money goes into the hands of consumers (or is supposed to) by way of government jobs.

Some of the 'facts' that you be missing is corruption and greed from all sides. Big companies donate to both left- and right-wing, so that together they will vote on the middle ground that best suits the businesses. Either they vote for lower taxes so they can horde more money, or they may vote higher taxes but less regulation so that the cost can be negated in some way.

[Jagos]

It HAS been proven that keeping minimum wage at a decent rate is very good for the economy, and many businesses that pay their employees more thrive much better than those that pay less.

I'm to believe there's a big difference between an efficiency wage (which a business does) versus a government mandated wage...

[Professor Smarmiarty]

I figured instead of going around taking other threads off the rails with my questions, I could pool them all here instead. There are also a couple articles I would like to link, so this will avoid some unorganization.

This first article (http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aaaBdVMkjPnU) is kind of creepy, if not a complete hyperbole.




Over the top, and I'm not one of those who huddles in his fallout shelter with a gun worrying when Obama Vader will come to take over his stuff, but it's been making too much sense to me lately. The same can be said about nationalizing healthcare. If that ever becomes a reality doesn't that pretty much give the government the opportunity to regulate every aspect of your life under the guise of cutting costs? Example, not allowing your kids to play in the pool for fear they might accidentally hurt themselves or drown (a little extreme I know, just trying to illustrate).


Not true. There are plenty of countries throughout the world with nationalised healthcare. I lived in them and stuff like that doesn't happen.
What happens is that the people who actually need healthcare can actually get it.


Whenever I've brought this up I've been shot down by people saying that lowering taxes on businesses would destroy the country. Then, on the flip side I've been told raising taxes on businesses would destroy the country. That's too much pressure! Anyone care to clear this up? I have been rooting through my local B&N for books on economic history and philosophy so I can be more prepared in the future for debates such as this.

Raising taxes on business is generally a good thing as excesses businesses make don't tend to get passed onto consumers or workers but to executives. By raising taxes you can take these bonuses and hand them to less well-off people.
The argument is that raising taxes will destroy business profitabilty/ competition but this is really not true as large businesses make astronomical amounts of money most of which does actually go to thier upper tier who can afford to lose it.
As for smaller business, well tax them less.


The second thing I wanted to ask about is a little more...sketchy. And I apologize for bringing this blight upon the hallowed grounds of the boards, but today I committed the mortal sin of listening to a half hour of Rush Limbaugh. The thing was, it was a very convincing half hour where he talked about the press conference from yesterday, talking about the new unemployment rate. I'll save you from reading the entire transcript by posting snippets here, but I'll link the transcript (http://www.rushlimbaugh.com/home/daily/site_060909/content/01125110.guest.html) as well. The reason I'm linking it is because he made it seem like a complete clusterfuck, and reading back on the actual press conference, that's how their answers did sound.

Not sure what exactly you are getting at here. It isn't helped that Limbaugh didn't actually make any arguments except Oh no, Socialism!
Is it that unemployment predictions were wrong? Because that is a very hard thing to predict. Generally government stimulus will increase jobs. It's hard to fault them for not predicting exactly how many jobs they would have at the end.




I want to stress that I didn't create this thread to argue any points, only to get answers. I know approximately dick about economics. Is there something about this I'm missing or does none of this actually make any sense? I have a mean habit of missing the big picture.

With so many objections I have to the President's policies, it would be nice to know if I'm basing my opinions off of faulty "facts".[/QUOTE]

[Odjn]

Generally speaking the more money there is invested in the working class, like right after WW2, is best for a consumer economy because more people buy things.

While capitalism might be the most efficient economics-wise, it is not necessarily the most effective. The point of doing business is to personally make money, or team up with a small amount of friends to make money, because there's less sharing of the money you make. And operating on a profit basis here screws many people. No matter what other say, at some point someone has to pick up a mop or scrub dishes or lift heavy things, and someone's paying them to do that, and has realized if they pay them less when there's few jobs available people will grumble but be grateful to be employed, and after that economic crisis passes you just keep paying them less you yourself make more money so that's alright.

Any form of capitalism, whether regulated or laissez-faire, rewards the dudes who step on people to get ahead. Capitalism has no morality intrinsic in its operation and thus those who succeed are often amoral, or moral in the sense of say Stendhal who do whatever is necessary to make themselves happy. While this is great for economics, for society it produces the child worker, the man who makes less the harder he works, and the Triangle Shirtwaist Factories of the world. Considering we live in society by default, and only engage in economics out of necessity and rarely do we ever touch the high end expensive business deals which have such an effect on us, it is obvious which deserves maximum efficiency and which deserves to be less efficient for it's own sake but more efficient in holding up the other.

[Fifthfiend]

The same can be said about nationalizing healthcare. If that ever becomes a reality doesn't that pretty much give the government the opportunity to regulate every aspect of your life under the guise of cutting costs?

Goddammit, Bob.

[Professor Smarmiarty]

While capitalism might be the most efficient economics-wise, it is not necessarily the most effective.

The key here is might. Many have argued since Marx, who argued it first, that modern capitalisms are actually vastly inefficient as the management and control are so removed from the production that one cannot produce maximal outcomes. Also that the capitalism model prevents the full harnessing of technology as mechanisation is nowhere near the level it could be.

It has been demonstrated that the world is vastly inefficient, especially with regard to mechanisation, though whether there are more efficient mechanisms than capitalism that will work is a very controversial issue.

[AnonCastillo]

No matter what other say, at some point someone has to pick up a mop or scrub dishes or lift heavy things, and someone's paying them to do that, and has realized if they pay them less when there's few jobs available people will grumble but be grateful to be employed, and after that economic crisis passes you just keep paying them less you yourself make more money so that's alright.

... it produces the child worker, the man who makes less the harder he works, and the Triangle Shirtwaist Factories of the world.

Yes, when there are fewer jobs available workers are willing to accept lower pay and worse working conditions. Any regulation which makes it more difficult for companies to create more jobs, including increases in the minimum wage, only exacerbates the problem and causes more people to work under the table for even less money because they need some money to survive. This problem is only solved when the economy improves, which happens much more quickly under a capitalist, laissez-faire system than a socialist one because capitalism allows businesses to make enough money to expand their employment.

As for the child worker, 100 years ago a significant number of children in this country were laborers. 200 years ago nearly every child in this country was a a laborer. 500 years ago, when white men had barely touched this country's soil, nearly every child in this country was a laborer. So far, capitalism is the only economic model that has been able to take a country that required child labor to survive and make it wealthy enough that the vast majoirty of children in that society did not have to labor. Admittedly, factory conditions are sometimes much worse than farms, so doing 8-10 hours of factory labor today may worse for children than doing 8-10 hours of farm labor every day 200 years ago, but if that means that in 100 years, that country's children will be spending 7 hours a day in school instead of 8-10 hours a day doing difficult farm labor, is the investment worth it?

I'm to believe there's a big difference between an efficiency wage (which a business does) versus a government mandated wage...

Very true. The majority of people currently making the minimum wage are 21 or under, much of the remainder are people with criminal records or otherwise difficult people to hire. A government mandated living wage means you have to pay the 16 year old child of a middle class family $14 an hour to run the drive thru at Taco Bell. Also, raising the minimum wage makes companies less likely to hire disadvantaged workers. If you have to pay someone $14 an hour instead of $7, are you going to hire someone with a criminal record for $14 an hour that you were reluctant to hire for $7? No. Most businesses try to pay their workers as good a wage as they can afford because it helps them keep their good workers, and as long as there are plenty of companies competing over workers, pay will rise.

[Fifthfiend]

Most businesses try to pay their workers as good a wage as they can afford because it helps them keep their good workers, and as long as there are plenty of companies competing over workers, pay will rise.

HAHAHAhaahahahahhahaaaaaaaaaaaaaaa

The majority of people currently making the minimum wage are 21 or under, much of the remainder are people with criminal records or otherwise difficult people to hire.

ITT we use statistics that measure peope who earn exactly 5.15 an hour or less, because people who get a $0.25 raise after three months are officially living the high life.

[Professor Smarmiarty]

The forums ate up my post first time, so sorry if I'm a bit snippy and short this time but your economics is straight out of Adam Smith.


Yes, when there are fewer jobs available workers are willing to accept lower pay and worse working conditions. Any regulation which makes it more difficult for companies to create more jobs, including increases in the minimum wage, only exacerbates the problem and causes more people to work under the table for even less money because they need some money to survive. This problem is only solved when the economy improves, which happens much more quickly under a capitalist, laissez-faire system than a socialist one because capitalism allows businesses to make enough money to expand their employment.

Companies need a certain amount of workers in production. If they don't have these, they will go under. In addition production workers are a TINY fraction of the average businesses budget. There are far far far more losses that can be made at management/finance levels which will save a business unimaginably more than laying off workers.
If they do lay off workers they will simply go under and fail. They could pay workers less but that is why you regulate wages.
These regulations will do absolutely NOTHING to the ability of a company to create jobs. What they will do is curb the upper levels of management which can afford to be curbed.
In addition all the extra money the government has can be used to protect the poorer classes as that is the government's job. It is not the job of the companies and they won't do it.
As for your economy argument it, frankly, makes no sense. You cannot through a socialist economy into the middle of a capitalist system. Capitalism RELIES UPON bust economies, it needs recessions to work. It created the very system we are in. Socialist economies do not work this way. They are not boom/bust.
In addition the VERY POINT of a socialist system is that workers are not subject to the vagarities of market forces.

As for the child worker, 100 years ago a significant number of children in this country were laborers. 200 years ago nearly every child in this country was a a laborer. 500 years ago, when white men had barely touched this country's soil, nearly every child in this country was a laborer. So far, capitalism is the only economic model that has been able to take a country that required child labor to survive and make it wealthy enough that the vast majoirty of children in that society did not have to labor. Admittedly, factory conditions are sometimes much worse than farms, so doing 8-10 hours of factory labor today may worse for children than doing 8-10 hours of farm labor every day 200 years ago, but if that means that in 100 years, that country's children will be spending 7 hours a day in school instead of 8-10 hours a day doing difficult farm labor, is the investment worth it?

You do realise that the rich/poor disparity is greater than any time in history that we can reasonably measure? And it's pretty much directly a result of capitalist economics?
As for being the only economic model that is a historical reason. Capitalism has been tied into the development of democracy as the big movers in this field were generally the rising middle class who made thier fortunes in developing capitalist economies. Notice how the rise of democracy matches the rise in mercantilism? Yeah. In addition governments of today have a vested interest in capitalism as their wheels are greased by big business to avoid policies that help the little man and instead promulugate policies that help business.



Very true. The majority of people currently making the minimum wage are 21 or under, much of the remainder are people with criminal records or otherwise difficult people to hire. A government mandated living wage means you have to pay the 16 year old child of a middle class family $14 an hour to run the drive thru at Taco Bell. Also, raising the minimum wage makes companies less likely to hire disadvantaged workers. If you have to pay someone $14 an hour instead of $7, are you going to hire someone with a criminal record for $14 an hour that you were reluctant to hire for $7? No. Most businesses try to pay their workers as good a wage as they can afford because it helps them keep their good workers, and as long as there are plenty of companies competing over workers, pay will rise.

I don't know where to begin with this. Fifth's quote pretty much sums it up.
Let's start off with the ridiculous assumptions that you are making.
Firstly there is NO such thing as a free market in wages. Why? Because people aren't infinitely mobile. By the nature of the system the vast majority of people have to take jobs in thier surrounding area. This means that you get local fiefdoms of ridiculous wages. In addition people have to work to live, they can't wait around for jobs that pay them a correct amount.
Thirdly due to the nature of capitalism encouraging people to make the most ridiculous profits possible and because those up the top had the power to mandate wages and political connections vast wealth disparities have emerged in effective wages irregardless of the actual nature of the work. This has nothing to do with job effectiveness and everything to do with 19th century class prejudice and it can't really change.
Let's say, however, that a market does exist. A company wants the best production line staff. It offers a $1 more per hour than similar companies. So it gets the best staff. Guess what? Those production line people, however good they are, still earn wages not in the same stratsophere as the top level executives. This is why market forces can't cover such huge gaps. The people at the top set thier own wages.
As for hiring disabled people- this only happens in extreme levels of unemployment. I wonder what economic system ACTIVELY ENCOURAGES high levels of unemployment? (It's capitalism). In addition, under regulatory systems the government has far more money so it can spend that money helping the disabled FAR FAR more than in current systems.


tl:dr version: "The market" is not some kind of magical wizard that looks after everyone and fixes all problem. "The market" encourages gross inefficiency, wasteful consumption and exploitation of workers. We have the technology to feed the world and keep everyone happy but for capitalisitic wastage and greed.

[Odjn]

Yes, when there are fewer jobs available workers are willing to accept lower pay and worse working conditions. Any regulation which makes it more difficult for companies to create more jobs, including increases in the minimum wage, only exacerbates the problem and causes more people to work under the table for even less money because they need some money to survive. This problem is only solved when the economy improves, which happens much more quickly under a capitalist, laissez-faire system than a socialist one because capitalism allows businesses to make enough money to expand their employment.

And why would they pay more when the people working those jobs are paid low enough they have to work a second job anyway? The lowest rung of the workforce has no organization to look for jobs, because they are limited to a specific area because A)they have no money to move and B) any significant distance without public transportation will cause additional gas use which is really unaffordable to a group that frequently car pools as is, or C) they use bikes to get around and you're not biking over 10 miles to work, working for 8 or more hours, then biking back 10 miles for very long without getting killed in traffic.

I work in the hotel business. I started out as Front Desk and moved to the kitchen, specifically bartending. The housekeepers have worked at minimum wage for as long as they've worked at this specific hotel, and at others in some cases- there's no pay raises in housekeeping. The F/D gets started at 10/hr, and recently got a paybump due to new management policies. Kitchen earns tips besides cooks, who has less than the desk but just below.

In your fairy land capitalism last year these people would have had a raise because the property was in fantastic business and their department is crucial to guest satisfaction, and they consistently had the highest scores. Now, after firings and hour cuts, they have the lowest score. Management is pissed at them and demands that they get higher scores.

I went and called up a few other hotels in the area, and only one was different in that housekeepers got paid by the room which resulted in about a dollar and half more an hour than our housekeepers. This is out of 18 hotels in the area, all business-class or full service by major national chains.

Capitalism has no 'business is better so you're getting paid more' thing going on. That's how it works in theory, but in practice people are so poor because necessary jobs that need skills and physical endurance pay very little.

Given that these workers who used to work 40 hour weeks at best (no overtime was allowed for housekeepers and they don't schedule women on that basis) at 7.15 for the last year then 6.65 at the previous few years which in a reasonable 50 mile radius of the hotel mecca we work at requires you to be working another job so you can afford rent in a single room, something tells me that if there wasn't a minimum wage law the housekeepers would be working for less.

As for the child worker, 100 years ago a significant number of children in this country were laborers. 200 years ago nearly every child in this country was a a laborer. 500 years ago, when white men had barely touched this country's soil, nearly every child in this country was a laborer. So far, capitalism is the only economic model that has been able to take a country that required child labor to survive and make it wealthy enough that the vast majoirty of children in that society did not have to labor. Admittedly, factory conditions are sometimes much worse than farms, so doing 8-10 hours of factory labor today may worse for children than doing 8-10 hours of farm labor every day 200 years ago, but if that means that in 100 years, that country's children will be spending 7 hours a day in school instead of 8-10 hours a day doing difficult farm labor, is the investment worth it?

You've butchered history there a bit. 500 years ago, with the N. Americans they did do work, but not back breaking work on a factory floor. In Europe they were apprentices, but they weren't routinely stuck in the poorest conditions until industrialization. Child laborers ceased in America when the Progressives crusaded against it, got it made illegal by going on a nationwide tour with crippled children from factories. The Progressives, mind you, were based on socialist ideas, because it is perfectly capitalistic to make children work for pittances a day and then throw them into horrible working conditions because in capitalism the worker has no right to protest anything the employer is doing except start his own business which you need money to do. If left to purely capitalistic concerns the children would still be doing crappy jobs. Oh wait. They are, just in other countries which ape the conditions of the child laborers of yesteryear but worse. Capitalism took the dirt and shoved it in the closet, not brushed it up.

Notable other socialist accomplishments include forced overtime pay, the 8 hour day, illegality of prevent workers from forming a union, regulation of how employers treat employees, safety compliances, etc., by the way. And people didn't sit down and whine at the government to do those things either, they fought for them and often died due to the companies hiring private forces to shoot them, or begging the national guard to send in forces to make them go back to work, or eventually having the army sent in because the guard wouldn't shoot at peacefully assembled people not working. The Army did the trick, though. Gatling guns on crowds are a wonderful capitalistic persuader.



Very true. The majority of people currently making the minimum wage are 21 or under, much of the remainder are people with criminal records or otherwise difficult people to hire. A government mandated living wage means you have to pay the 16 year old child of a middle class family $14 an hour to run the drive thru at Taco Bell. Also, raising the minimum wage makes companies less likely to hire disadvantaged workers. If you have to pay someone $14 an hour instead of $7, are you going to hire someone with a criminal record for $14 an hour that you were reluctant to hire for $7? No. Most businesses try to pay their workers as good a wage as they can afford because it helps them keep their good workers, and as long as there are plenty of companies competing over workers, pay will rise.

All of my housekeepers are in their 40s or 50s. In the other hotels in the area I've been told this is the same. Maid services in the area also pay minimum wage, with a higher age discrepancy but still in the 30+ area.

Additionally, go to an area which is job scarce. Go to McDonalds, or Taco Bell, and see how many adults work there for minimum wage. Hell, go to a mall. Mine- the Freehold Raceway Mall in the smack dab of one of the richest areas in NJ, one of the richest states in the USA- has adult workers in every, EVERY restaurant/fast food place. There are indeed teenagers. But this is how many people earn their living for the rest of their life because there's nothing else to do.

Also, fun fact. People with criminal records are anyone who has ever been arrested. If you march and get arrested because you were there, it goes on it. If you are wrongly suspected of a crime, arrested for it, and are proven not guilty or have the charges dismissed because they found the other guy, you get a record. Criminal records are such nifty things, aren't they?

[Bob The Mercenary]

Doing this from a cell phone.

What about lower taxes on businesses bringing businesses back to the US? Is that fact or myth?

Also thanks for the responses so far, going to dole out some rep when I get home.

[AnonCastillo]

HAHAHAhaahahahahhahaaaaaaaaaaaaaaa

ITT we use statistics that measure peope who earn exactly 5.15 an hour or less, because people who get a $0.25 raise after three months are officially living the high life.

Glad to see you're just as condescending as ever.

Companies need a certain amount of workers in production. If they don't have these, they will go under. In addition production workers are a TINY fraction of the average businesses budget. There are far far far more losses that can be made at management/finance levels which will save a business unimaginably more than laying off workers.
If they do lay off workers they will simply go under and fail. They could pay workers less but that is why you regulate wages.
These regulations will do absolutely NOTHING to the ability of a company to create jobs. What they will do is curb the upper levels of management which can afford to be curbed.

And you guys accuse me of living in a fairy tale capitalist world. :P

When you raise the minimum wage, two things happen to varying degrees: companies raise prices to offset the loss of wages, and companies lay off their least productive workers and hire fewer workers from groups they tend to discriminate against (whether it be teenagers, the elderly, minorities, women, what have you). True, the cost of their own production workers is only a portion of their budget, but the cost of purchasing things produced by other businesses' workers, which will go up in price with an increase in minimum wage, stacks on top of that cost and drives prices up further.

You do realise that the rich/poor disparity is greater than any time in history that we can reasonably measure? And it's pretty much directly a result of capitalist economics?

The disparity is greater because the rich have more, not because the poor have less. You argue about this disparity as though it's a bad thing, as though all people should have an equal share of everything; why? Each person is different. Each person contributes a different amount to his or her fellow human beings, and what they receive back should be proportional to what they give. I agree that many of the rich today are there not because they are capable managers or because they contributed a good invention or discovery to humanity, but because they are able to manipulate our political system for their own gain, but I'm at least as strongly opposed to corporatism as you are. There should be disparity in society, so long as that disparity is based upon the contributions people have made to society. Also, just because the rich are getting richer much faster than the poor does not mean the poor are not getting richer (or weren't until recently); I know plenty of people who live in the ghetto and would be considered lower class who own cell phones with internet connections, big screen tvs, and have multiple cars per household. Are they poor relative to todays rich? Sure. Are they as poor as the poor of 50 years ago? Fuck no.

As for being the only economic model that is a historical reason. Capitalism has been tied into the development of democracy as the big movers in this field were generally the rising middle class who made thier fortunes in developing capitalist economies. Notice how the rise of democracy matches the rise in mercantilism? Yeah. In addition governments of today have a vested interest in capitalism as their wheels are greased by big business to avoid policies that help the little man and instead promulugate policies that help business.

God, capitalism was one of the forces that helped spread democracy by creating a middle class that fought for the rights of the non-aristocratic. It's also helped develop countries, first to industrial age levels and then to modern technological levels. What a horrible system of economics! Who wants voting rights and modern technology when we could all live off the land under a monarch?

I fail to see how capitalism being a driving force behind democracy is a bad thing, but I do see how the current corporatist investment in our democratic republic is harmful, but removing the influence of big business from government is another discussion altogether.

I don't know where to begin with this. Fifth's quote pretty much sums it up.
Let's start off with the ridiculous assumptions that you are making.
Firstly there is NO such thing as a free market in wages. Why? Because people aren't infinitely mobile. By the nature of the system the vast majority of people have to take jobs in thier surrounding area. This means that you get local fiefdoms of ridiculous wages. In addition people have to work to live, they can't wait around for jobs that pay them a correct amount.
Thirdly due to the nature of capitalism encouraging people to make the most ridiculous profits possible and because those up the top had the power to mandate wages and political connections vast wealth disparities have emerged in effective wages irregardless of the actual nature of the work. This has nothing to do with job effectiveness and everything to do with 19th century class prejudice and it can't really change.
Let's say, however, that a market does exist. A company wants the best production line staff. It offers a $1 more per hour than similar companies. So it gets the best staff. Guess what? Those production line people, however good they are, still earn wages not in the same stratsophere as the top level executives. This is why market forces can't cover such huge gaps. The people at the top set thier own wages.
As for hiring disabled people- this only happens in extreme levels of unemployment. I wonder what economic system ACTIVELY ENCOURAGES high levels of unemployment? (It's capitalism). In addition, under regulatory systems the government has far more money so it can spend that money helping the disabled FAR FAR more than in current systems.

Due to capitalism, our workforce is more mobile today than it has been at any time in history, and was becoming more mobile every year for a while. Maybe it's peaked, but I think the work force would be continuing to become more mobile were it not for the failings of American auto makers as well as the current global economic crisis, both of which are the fault of corporatism for protecting failing businesses, not capitalism, which would let failing businesses die to make room for new ones. Do you sometimes get "feifdoms" of wages based on geographical economic conditions? Sure, but would more capitalism and less regulation still help those areas? Usually, yes.

I live in Nebraska, one of the reddest states in the country, a right to work/non-union state, and Taco Bell was hiring people at $8/hour when the minimum wage was $5.15. While our state is feeling a bit of the global economic crisis, we're feeling it a hell of a lot less than most of the rest of the country. The states feeling it the most are generally the most liberal, the west coast states and new england. In 2002, when we hit the first bush recession, what was the only state in the country to gain industrial sector jobs instead of losing them? Nevada, one of the states with the lowest taxes and fewest regulations on business.

On that subject, Odjn, what part of the country do you live in?

[Bob The Mercenary]

On that subject, Odjn, what part of the country do you live in?

The best part.

[Kepor]

What about lower taxes on businesses bringing businesses back to the US? Is that fact or myth?


Probably a myth, as a major factor in industry flight is cost of labor.

Also, as for the disparity in incomes, while it's a good thing that standard of living for the poor classes has risen from olden times, a wide gap between poor and rich tends to lead to economic stagnation.

[Fifthfiend]

Glad to see you're just as condescending as ever.

And you guys accuse me of living in a fairy tale capitalist world. :P

When you raise the minimum wage, two things happen to varying degrees: companies raise prices to offset the loss of wages, and companies lay off their least productive workers and hire fewer workers from groups they tend to discriminate against (whether it be teenagers, the elderly, minorities, women, what have you). True, the cost of their own production workers is only a portion of their budget, but the cost of purchasing things produced by other businesses' workers, which will go up in price with an increase in minimum wage, stacks on top of that cost and drives prices up further.



The disparity is greater because the rich have more, not because the poor have less. You argue about this disparity as though it's a bad thing, as though all people should have an equal share of everything; why? Each person is different. Each person contributes a different amount to his or her fellow human beings, and what they receive back should be proportional to what they give. I agree that many of the rich today are there not because they are capable managers or because they contributed a good invention or discovery to humanity, but because they are able to manipulate our political system for their own gain, but I'm at least as strongly opposed to corporatism as you are. There should be disparity in society, so long as that disparity is based upon the contributions people have made to society. Also, just because the rich are getting richer much faster than the poor does not mean the poor are not getting richer (or weren't until recently); I know plenty of people who live in the ghetto and would be considered lower class who own cell phones with internet connections, big screen tvs, and have multiple cars per household. Are they poor relative to todays rich? Sure. Are they as poor as the poor of 50 years ago? Fuck no.



God, capitalism was one of the forces that helped spread democracy by creating a middle class that fought for the rights of the non-aristocratic. It's also helped develop countries, first to industrial age levels and then to modern technological levels. What a horrible system of economics! Who wants voting rights and modern technology when we could all live off the land under a monarch?

I fail to see how capitalism being a driving force behind democracy is a bad thing, but I do see how the current corporatist investment in our democratic republic is harmful, but removing the influence of big business from government is another discussion altogether.



Due to capitalism, our workforce is more mobile today than it has been at any time in history, and was becoming more mobile every year for a while. Maybe it's peaked, but I think the work force would be continuing to become more mobile were it not for the failings of American auto makers as well as the current global economic crisis, both of which are the fault of corporatism for protecting failing businesses, not capitalism, which would let failing businesses die to make room for new ones. Do you sometimes get "feifdoms" of wages based on geographical economic conditions? Sure, but would more capitalism and less regulation still help those areas? Usually, yes.

I live in Nebraska, one of the reddest states in the country, a right to work/non-union state, and Taco Bell was hiring people at $8/hour when the minimum wage was $5.15. While our state is feeling a bit of the global economic crisis, we're feeling it a hell of a lot less than most of the rest of the country. The states feeling it the most are generally the most liberal, the west coast states and new england. In 2002, when we hit the first bush recession, what was the only state in the country to gain industrial sector jobs instead of losing them? Nevada, one of the states with the lowest taxes and fewest regulations on business.

On that subject, Odjn, what part of the country do you live in?

Glad to see you're still justifying it http://i606.photobucket.com/albums/tt148/fifthfiend/emoticons/smug.gif

[Kurosen]

While our state is feeling a bit of the global economic crisis, we're feeling it a hell of a lot less than most of the rest of the country. The states feeling it the most are generally the most liberal, the west coast states and new england.
...Because the sharp decline in real estate value is a pretty big factor of the economic crisis and that's where the most real estate value is in the US, so of course they'll be hit harder than Nowhere, Midwest USA. It has nothing to do with how many blue or red states are in those regions. Good god.

[Kepor]

Concerning the point of industry flight and mobility of labor; it's not that the labor force isn't mobile, but that labor is much less mobile than capital. So then it's easier for business to move from place to place than it is for workers to move from place to place.

[Professor Smarmiarty]

Doing this from a cell phone.

What about lower taxes on businesses bringing businesses back to the US? Is that fact or myth?

Also thanks for the responses so far, going to dole out some rep when I get home.

That is a tricky issue and would depend on the industry. It might work for some but for most industries labour is far cheaper overseas so it's easier to get them to do it.
But mostly it seems unlikely.



When you raise the minimum wage, two things happen to varying degrees: companies raise prices to offset the loss of wages, and companies lay off their least productive workers and hire fewer workers from groups they tend to discriminate against (whether it be teenagers, the elderly, minorities, women, what have you). True, the cost of their own production workers is only a portion of their budget, but the cost of purchasing things produced by other businesses' workers, which will go up in price with an increase in minimum wage, stacks on top of that cost and drives prices up further.

Only true in the very short term. Not in the long term which is what actually counts.

And you still have no idea where business costs actually are. It's in management, it's in adminstration, it's in the offices. Factories are cheap as piss.



The disparity is greater because the rich have more, not because the poor have less. You argue about this disparity as though it's a bad thing, as though all people should have an equal share of everything; why? Each person is different. Each person contributes a different amount to his or her fellow human beings, and what they receive back should be proportional to what they give. I agree that many of the rich today are there not because they are capable managers or because they contributed a good invention or discovery to humanity, but because they are able to manipulate our political system for their own gain, but I'm at least as strongly opposed to corporatism as you are. There should be disparity in society, so long as that disparity is based upon the contributions people have made to society. Also, just because the rich are getting richer much faster than the poor does not mean the poor are not getting richer (or weren't until recently); I know plenty of people who live in the ghetto and would be considered lower class who own cell phones with internet connections, big screen tvs, and have multiple cars per household. Are they poor relative to todays rich? Sure. Are they as poor as the poor of 50 years ago? Fuck no.

You know where a lot of American corporations workers are? In Africa and Asia. And they are as poor as 50 years ago and live in tremendous poverty because of attitudes like that.
Why do we need disparity and diversity? It has been shown (though a bit tentaviely) that with our current technology and resources the entire world could be supported such that everyone can live a healthy life. I mean, really now, do you actually think the world we live in is better than that.

And contributions to the society? The 1930s called and wants its ideology back. The key determanent to how much someone to contribute to society is not their inherent personal characteristics, it is the environment that are born into it. So basically what you are saying is, If I'm born into immense poverty and therefore can't get an education, can't get enough to eat and thus spend my life on the streets not contributing to society my poverty is my own fault for not contributing to society?
The only way that view can possibly ever be justified is if everyone had exactly the same opportunities and lifestyle from birth. But that is antithetical to capitalism.



God, capitalism was one of the forces that helped spread democracy by creating a middle class that fought for the rights of the non-aristocratic. It's also helped develop countries, first to industrial age levels and then to modern technological levels. What a horrible system of economics! Who wants voting rights and modern technology when we could all live off the land under a monarch?

Complete rot. Capitalism helped develop our tremendously undemocratic systems of government which are about as democratic as dictatorship.
In addition the creation of the middle class was one of the forces which helped stunt democratic development, particularly in the US and England, and vest power in few hands.
And key democratic authours like Voltaire, like Payne, like Diderot- they complained about the exact same things back then. Voltaire saw what would happen with unrestrained development, just like Marx did a hundred years later.
I don't know how you can look upon the political systems that have developed alongside capitalism as a good thing.
I suggest you read A New American History by Eric Foner- a good introduction to this topic.



Due to capitalism, our workforce is more mobile today than it has been at any time in history, and was becoming more mobile every year for a while. Maybe it's peaked, but I think the work force would be continuing to become more mobile were it not for the failings of American auto makers as well as the current global economic crisis, both of which are the fault of corporatism for protecting failing businesses, not capitalism, which would let failing businesses die to make room for new ones. Do you sometimes get "feifdoms" of wages based on geographical economic conditions? Sure, but would more capitalism and less regulation still help those areas? Usually, yes.
Seriously?
You do realise capitalism is the very reason for the lack of mobility I was talking about. You realise that the car and airplane industries have been powerful enough that they have stopped any developments in transport technology because it would cost money to reoutfit thier factory.
We still drive in 1920s designs and fly in 1950s designs. People have designed vastly more efficient cars using electronic systems and people have designed jets which don't cost millions of dollars in airfuel every time you add a few extra seats.
Why haven't we seen any of these? Because the very lifeblood of capitalism is short-term profit. While these technologies might make money in the long run for the big corporations, it is far too expensive and hugely risky in the short run to produce them. So they stamped out anybody with ideas. Capitalism is inherentely reactionary as it is the way big business stays on top. And they can easily afford to shut down competitors.
The global recession is EXACTLY the fault of capitalism because it is BUILT INTO THE VERY SYSTEM OF CAPITALISM. What part of boom and bust don't you understand? People have been predicting this recession since the early 90s far before government protectionism was all the rage. Shit, Marx predicted the cycle of the recessions in the 1840s. The global recession is not only an outcome of capitalism but IS PART OF THE POINT OF CAPITALISM.
As for mobility, you are seriously deluding yourself. The average worker is no more mobile than he was in the 1950s. You can only work in your local area as you need to get to and from work every day. And these people often have to work multiple jobs which makes it even worse. There is only so far you can drive and thanks to the auto
As for selecting an area, they are far too poor to do that.
To get proper mobility not only do you need a state that can fund full public transport as well as invest in new technologies but you need people rich enough to move around. And that's a total fantasy land.


I live in Nebraska, one of the reddest states in the country, a right to work/non-union state, and Taco Bell was hiring people at $8/hour when the minimum wage was $5.15. While our state is feeling a bit of the global economic crisis, we're feeling it a hell of a lot less than most of the rest of the country. The states feeling it the most are generally the most liberal, the west coast states and new england. In 2002, when we hit the first bush recession, what was the only state in the country to gain industrial sector jobs instead of losing them? Nevada, one of the states with the lowest taxes and fewest regulations on business.


Did you miss my entire point? Sure they may pay you $3 an hour more to attract you but that is completely irrelevant. It is still not in the same galaxy as what the upper levels earn. That will do ABSOLUTELY NOTHING to cover a poverty gap.
You know, only looking at US states is not a particularly effective sample. Notice how the US is being hit harder by the recession than pratically any other country while also being one of the most unregulated, tax exempt countries around. See I can make examples that prove my point to.
And the phenomenon you are talking about is well known. It is called the economics of fear where during a recession business flees to tax-havens to keep maintaining short-term profit.
Edit: Or what Brian said. I don'tknow the exact details of state by state economies in the US.

[Odjn]

God, capitalism was one of the forces that helped spread democracy by creating a middle class that fought for the rights of the non-aristocratic. It's also helped develop countries, first to industrial age levels and then to modern technological levels. What a horrible system of economics! Who wants voting rights and modern technology when we could all live off the land under a monarch?

Ironically the biggest proponents of capitalism were the merchants who quickly became royalty by having so much money. See the Medicis. While capitalism took power away from the nobles and eventually the monarchs, it was just handed to the merchants.

Due to capitalism, our workforce is more mobile today than it has been at any time in history, and was becoming more mobile every year for a while. Maybe it's peaked, but I think the work force would be continuing to become more mobile were it not for the failings of American auto makers as well as the current global economic crisis, both of which are the fault of corporatism for protecting failing businesses, not capitalism, which would let failing businesses die to make room for new ones. Do you sometimes get "feifdoms" of wages based on geographical economic conditions? Sure, but would more capitalism and less regulation still help those areas? Usually, yes.

I live in Nebraska, one of the reddest states in the country, a right to work/non-union state, and Taco Bell was hiring people at $8/hour when the minimum wage was $5.15. While our state is feeling a bit of the global economic crisis, we're feeling it a hell of a lot less than most of the rest of the country. The states feeling it the most are generally the most liberal, the west coast states and new england. In 2002, when we hit the first bush recession, what was the only state in the country to gain industrial sector jobs instead of losing them? Nevada, one of the states with the lowest taxes and fewest regulations on business.

On that subject, Odjn, what part of the country do you live in?

Proper regulation is a good thing, in the same way saying don't kill people is a good regulation. Anyone who thinks business, especially business in America, should be completely unregulated is giving a registered pedophile the key to a nursery. Anyone who knows what's going on is screaming NO DON'T DO IT.

I've lived in New Jersey and parts of New York. Mentioned this already, as well as the name of the big mall near me.

The mobile workforce is only the middle class. I can afford to drive 30 to 45 minutes to work and back because I make a truly ridiculous amount of money when people are at the bar. The same housekeepers literally go two to five a car and the managers have to organize shifts so they can all drive together.
Gas in NJ is actually cheaper than anything, but you can't really afford to drive somewhere that costs even a gallon of gas when the cheapest apartments run from 650-700 for a studio with a bathroom to 800-900 for a single bed and bath, let alone for a family!

[Jagos]

Proper regulation is a good thing, in the same way saying don't kill people is a good regulation. Anyone who thinks business, especially business in America, should be completely unregulated is giving a registered pedophile the key to a nursery. Anyone who knows what's going on is screaming NO DON'T DO IT.

Hate to say, that's a horrible analogy. I don't think anyone necessarily wants business to have unfettered freedom to charge willy nilly (besides, most people won't afford the prices a business wants until it hits equilibrium) but that's part of the political process.

And the phenomenon you are talking about is well known. It is called the economics of fear where during a recession business flees to tax-havens to keep maintaining short-term profit.

Funny, because when recessions come up, it's the USD that most investors in other countries fall back on. That, and gold.

Only true in the very short term. Not in the long term which is what actually counts.

And you still have no idea where business costs actually are. It's in management, it's in adminstration, it's in the offices. Factories are cheap as piss.

Source?

Because the sharp decline in real estate value is a pretty big factor of the economic crisis and that's where the most real estate value is in the US, so of course they'll be hit harder than Nowhere, Midwest USA.

To add:
California, Nevada and Florida are the hardest hit for taxes on housing.

There's more than one reason people are moving OUT of Cali. Nevada had people moving into a desert town to make it big. People retired in Florida. But notice that these three states didn't really have property taxes, so speculators could go nuts on flipping houses.

So basically what you are saying is, If I'm born into immense poverty and therefore can't get an education, can't get enough to eat and thus spend my life on the streets not contributing to society my poverty is my own fault for not contributing to society?

Or volunteer for the military, do your 20 years and focus on an end objective of a house, children and being well traveled. That's what a lot of guys and girls do to get out of the ghettos of LA or wherever they are. Doesn't work for everyone but honestly, how many people can be kings or high society under a monarchy?

[Fifthfiend]

Or volunteer for the military, do your 20 years and focus on an end objective of a house, children and being well traveled. That's what a lot of guys and girls do to get out of the ghettos of LA or wherever they are. Doesn't work for everyone but honestly, how many people can be kings or high society under a monarchy?

This was a great comment and then I realized you weren't being sarcastic.

[Jagos]

Honestly, you got PTSD, gangsta Marines, and trigger happy kids with SAWs watching your back. Where can you not find comedy?

[Kepor]

Actually, concerning the profitability of manufacturing. It's known as the smiley curve, and plots profitability on the y-axis and stage of production on the x-axis.

The first stage is initial concept, and high in profitability. The next stage is design, a bit further along the x-axis, and a bit down in profitability. In the middle is resources and manufacturing, the least profitable stage in the process. Finally, at the end, is marketing and distribution, also high profitability. It's why China wants to shift from having products "made in China" to "designed, made, and sold in China."

[Odjn]

Hate to say, that's a horrible analogy. I don't think anyone necessarily wants business to have unfettered freedom to charge willy nilly (besides, most people won't afford the prices a business wants until it hits equilibrium) but that's part of the political process.


You know what, you're right. A better metaphor would be we would give him the keys BECAUSE he loves them so very, very much he knows exactly what they need. Next up, rapists in charge of women's shelters!

[Eldezar]

When you raise the minimum wage, two things happen to varying degrees: companies raise prices to offset the loss of wages, and companies lay off their least productive workers and hire fewer workers from groups they tend to discriminate against (whether it be teenagers, the elderly, minorities, women, what have you). True, the cost of their own production workers is only a portion of their budget, but the cost of purchasing things produced by other businesses' workers, which will go up in price with an increase in minimum wage, stacks on top of that cost and drives prices up further.

Like it was said before, this only happens in the short run. First example I have is a business in my area called Youngs Jersey Dairy, a dairy farm with homemade ice cream, mini-golf, corn maze and other farm-themed attractions. Mr. Young gave hell when minimum wage was going to go from $5.35 to $6.85, claiming he would go out of business, have to lay people off, etc. all the things you think will happen with increased wages.

2 1/2 years later, Ohio now has a minimum wage of $7.30. I drove by the place two weeks ago and the place was packed with cars and school buses. I will also be in the area this weekend, so I'll be sure to stop by and report on what I am sure is a full staff of employees next week.

Next example, I used to work at Wendy's. Shortly after minimum wage went up to 6.85, most items on their menu went up by .20 cents. We still had a lot of employees, most of them getting full time. I myself even managed to get 20 hours overtime for quite a few weeks in a row. This was all right after minimum wage went up. Again, 2 1/2 years later, minimum wage is $7.30, and most of the prices are back down to what they used to be, and if not back to the orignal price, they still dropped to only .05 to .10 cents more than the original.

The disparity is greater because the rich have more, not because the poor have less. You argue about this disparity as though it's a bad thing, as though all people should have an equal share of everything; why? Each person is different. Each person contributes a different amount to his or her fellow human beings, and what they receive back should be proportional to what they give. I agree that many of the rich today are there not because they are capable managers or because they contributed a good invention or discovery to humanity, but because they are able to manipulate our political system for their own gain, but I'm at least as strongly opposed to corporatism as you are. There should be disparity in society, so long as that disparity is based upon the contributions people have made to society. Also, just because the rich are getting richer much faster than the poor does not mean the poor are not getting richer (or weren't until recently); I know plenty of people who live in the ghetto and would be considered lower class who own cell phones with internet connections, big screen tvs, and have multiple cars per household. Are they poor relative to todays rich? Sure. Are they as poor as the poor of 50 years ago? Fuck no.

Disregarding the contradictions within this comment, how do you think the rich got richer? They steal, lie and cheat in order to take from the poor. (i.e. the recent bailouts.)

There is only so much money in the system. Therefore, in order for the rich to get richer, some group has to become poorer. Why not the poor, they already have so little? Since they can't do anything with what little they already have, let's give it to those who already have more than they need.

The bold statement can still be true, but not in the context that you think. That is by putting more money into the system. If we create money, and all of that new money goes to the rich, then the richer get richer because they have more, but the poor have no more or less than they already did. HOWEVER, creating more money means that the money that is out there becomes less valuable, meaning the poor still become poorer even though they still have the same amount they had before.


God, capitalism was one of the forces that helped spread democracy by creating a middle class that fought for the rights of the non-aristocratic. It's also helped develop countries, first to industrial age levels and then to modern technological levels. What a horrible system of economics! Who wants voting rights and modern technology when we could all live off the land under a monarch?

You know how well Capitalism has 'helped' developed countries? The World Bank, which is actually a private business where there has never been a non-American executive and highly unlikely to have a non-American employee aside from janitors, helps developing countries by giving them loans. These loans help the country. They get some businesses started up, decent infrastructure, a few schools, everything is nice. Then, they call in the interest, which just so happens to be just enough to put the newly developed nation back into the developing stage. Rinse and repeat.

I fail to see how capitalism being a driving force behind democracy is a bad thing, but I do see how the current corporatist investment in our democratic republic is harmful, but removing the influence of big business from government is another discussion altogether.

That actually ties in with this conversation extremely well, because it is the big businesses that 'contribute' to both the left and the right so that they can persuade them to come to a middle-grounds which best benefits the businesses. McCain was originally anti-oil, but in just one night, he had a closed door meeting with some oil executives. The next day, he was pro-oil and had a nice fat check from the oil companies donated to his campaign. This kind of thing can be found throughout history and even today with most Senators and Representatives, red and blue.

So, if businesses are able to influence politicians, don't you think they would influence them in a way that best supports their business? Therefore, lower taxes, lower minimum wage, anything for less regulation.

[ZAKtheGeek]

The disparity is greater because the rich have more, not because the poor have less. You argue about this disparity as though it's a bad thing, as though all people should have an equal share of everything; why? Each person is different. Each person contributes a different amount to his or her fellow human beings, and what they receive back should be proportional to what they give. I agree that many of the rich today are there not because they are capable managers or because they contributed a good invention or discovery to humanity, but because they are able to manipulate our political system for their own gain, but I'm at least as strongly opposed to corporatism as you are. There should be disparity in society, so long as that disparity is based upon the contributions people have made to society. Also, just because the rich are getting richer much faster than the poor does not mean the poor are not getting richer (or weren't until recently); I know plenty of people who live in the ghetto and would be considered lower class who own cell phones with internet connections, big screen tvs, and have multiple cars per household. Are they poor relative to todays rich? Sure. Are they as poor as the poor of 50 years ago? Fuck no.
A big disparity is considered to be a bad thing because it implies a system where those with money are able to exploit those without; that they can accumulate wealth off of their labor without actually paying them much. A growing gap illustrates a counterexample to the common claim that "what's good for business is good for everyone;" supposedly, businesses having more money means new products, more jobs, more spending, more money cycling around, etc, resulting in cheaper and better products and services for everyone; yet what we see is that money seems to just go to the top and stay there.

[Jagos]

These loans help the country. They get some businesses started up, decent infrastructure, a few schools, everything is nice. Then, they call in the interest, which just so happens to be just enough to put the newly developed nation back into the developing stage. Rinse and repeat.

So places like Somalia, with few natural resources or Haiti with plenty of people but nothing to really develop are only third world countries because the US screwed them over?

A growing gap illustrates a counterexample to the common claim that "what's good for business is good for everyone;" supposedly, businesses having more money means new products, more jobs, more spending, more money cycling around, etc, resulting in cheaper and better products and services for everyone; yet what we see is that money seems to just go to the top and stay there.

Actually more businesses mean more jobs and spending and all that. Monopolies (Microsoft) only come up when they can control a niche market. You want the new products, and better services, have businesses fight each other. That usually does a LOT to drive down prices on things. Kinda like a $300 GB hard drive used to be ~$1500 3 or four years ago when only a few manufacturers made it.

A better metaphor would be we would give him the keys BECAUSE he loves them so very, very much he knows exactly what they need. Next up, rapists in charge of women's shelters!

Tell them don't forget the KY.

[Fifthfiend]

Disregarding the contradictions within this comment, how do you think the rich got richer? They steal, lie and cheat in order to take from the poor. (i.e. the recent bailouts.)

There is only so much money in the system. Therefore, in order for the rich to get richer, some group has to become poorer. Why not the poor, they already have so little? Since they can't do anything with what little they already have, let's give it to those who already have more than they need.

The bold statement can still be true, but not in the context that you think. That is by putting more money into the system. If we create money, and all of that new money goes to the rich, then the richer get richer because they have more, but the poor have no more or less than they already did. HOWEVER, creating more money means that the money that is out there becomes less valuable, meaning the poor still become poorer even though they still have the same amount they had before.

TBF what he mainly means - and which is true - society does create new wealth over time in terms of creating like, new life-saving technologies and consumer goods and more efficient this and better that. And his argument is more that poor people aren't so much getting more poor over time as that rich people are just taking ALL the fucking benefit of EVERYTHING NEW that anybody comes up with. And the poor are even better off because eventually the rich chew up and digest some of that wealth and shit a little of it back out onto the shit-classes!

Which is only a problem if you 1. maybe think society should share more its benefits with more than a tiny handful of people, and 2. think that having a cell phone or some shitty thirdhand-used rustbucket isn't necessarily a complete replacement for things like shittier access to medical care or needing that shitty rustbucket out of economic necessity because public transit in this country is a sick joke. Which aren't at all things that Castle is worried about, so it's all good I guess.

[Eldezar]

So places like Somalia, with few natural resources or Haiti with plenty of people but nothing to really develop are only third world countries because the US screwed them over?

No, that would be a stupid thing to say. I am saying that the U.S. (along with most other developed nations) is exploiting the weak economies of these nations. Because of this, they are hindering and negating any progress that could be made otherwise. Sure, if these nations were left alone, they would still be unlikely to develop on their own, but they still aren't receiving any substantial help.

TBF what he mainly means - and which is true - society does create new wealth over time in terms of creating like, new life-saving technologies and consumer goods and more efficient this and better that. And his argument is more that poor people aren't so much getting more poor over time as that rich people are just taking ALL the fucking benefit of EVERYTHING NEW that anybody comes up with. And the poor are even better off because eventually the rich chew up and digest some of that wealth and shit a little of it back out onto the shit-classes!

Which is only a problem if you 1. maybe think society should share more its benefits with more than a tiny handful of people, and 2. think that having a cell phone or some shitty thirdhand-used rustbucket isn't necessarily a complete replacement for things like shittier access to medical care or needing that shitty rustbucket out of economic necessity because public transit in this country is a sick joke. Which aren't at all things that Castle is worried about, so it's all good I guess.

I agree with the first paragraph, could you make the second less confusing, though? It might be because it is bedtime, but just in case it still doesn't make sense tomorrow.

[Professor Smarmiarty]

Funny, because when recessions come up, it's the USD that most investors in other countries fall back on. That, and gold.[ /QUOTE]
How is that even related to my point? The reason people go back to the US dollar is because pretty a lot of other countries economies are backed against the US dollar. So if everyone is falling, the balance of profit lies with the US dollar. It has nothing to do with taxes and regulation.

It's not really related but in addition the US economy is a gigantic tax haven if you are a large business.

[QUOTE]
Source?

Every large corporation ever.



Or volunteer for the military, do your 20 years and focus on an end objective of a house, children and being well traveled. That's what a lot of guys and girls do to get out of the ghettos of LA or wherever they are. Doesn't work for everyone but honestly, how many people can be kings or high society under a monarchy?

...... I really don't even know what to say to this. This is one of the most ridiculous arguments I've ever heard.

So places like Somalia, with few natural resources or Haiti with plenty of people but nothing to really develop are only third world countries because the US screwed them over?
Mostly the US but others had a hand too. But yes this is pretty much exactly the reason they are poor.
It was called mercantilism and through the 19th century exploitation of these countries to fund the mainlands pretty much stripped every country that wasn't in Europe or America to the bone.


Actually more businesses mean more jobs and spending and all that. Monopolies (Microsoft) only come up when they can control a niche market. You want the new products, and better services, have businesses fight each other. That usually does a LOT to drive down prices on things. Kinda like a $300 GB hard drive used to be ~$1500 3 or four years ago when only a few manufacturers made it.
And if we didn't have a monopoly, combined with the inefficient seperation of production and management, they would cost a few dollars to buy. What exactly is your point?
Also those things are much cheaper back home in one of the most isolated countries in the world with higher shipping costs. That is totally a monopoly right there.

[Bob The Mercenary]

Disregarding the contradictions within this comment, how do you think the rich got richer? They steal, lie and cheat in order to take from the poor. (i.e. the recent bailouts.)

All of them? One of my mottos is "generalizing will kill us all". Not sure why I've been defending big business, it just seems like a rather large blanket statement you're making.

[Jagos]

Or volunteer for the military, do your 20 years and focus on an end objective of a house, children and being well traveled. That's what a lot of guys and girls do to get out of the ghettos of LA or wherever they are. Doesn't work for everyone but honestly, how many people can be kings or high society under a monarchy?

Honestly, you got PTSD, gangsta Marines, and trigger happy kids with SAWs watching your back. Where can you not find comedy?
...... I really don't even know what to say to this. This is one of the most ridiculous arguments I've ever heard.

If more people actually did that, it wouldn't be funny. *Thumbs up*

It's not really related but in addition the US economy is a gigantic tax haven if you are a large business.

Somehow, I'm not quite getting the "US is tax haven" thing when the article is saying that even Microsoft may move out of the US if Obama decides to tax them heavier. Especially when Europe is 10 points lower in corporate taxes.

What exactly is your point?
Also those things are much cheaper back home in one of the most isolated countries in the world with higher shipping costs. That is totally a monopoly right there.

Point was more competition, not less. That's what gives an incentive to create newer products. Some areas can't be regulated so the government has to step in (To my Knowledge, insulin for example).

[Odjn]

[/b]


If more people actually did that, it wouldn't be funny. *Thumbs up*



Somehow, I'm not quite getting the "US is tax haven" thing when the article is saying that even Microsoft may move out of the US if Obama decides to tax them heavier. Especially when Europe is 10 points lower in corporate taxes.



Point was more competition, not less. That's what gives an incentive to create newer products. Some areas can't be regulated so the government has to step in (To my Knowledge, insulin for example).

For European countries. IIRC Sweden for example has a flat 30% tax or something like that?

[The Wizard Who Did It]

All of them? One of my mottos is "generalizing will kill us all". Not sure why I've been defending big business, it just seems like a rather large blanket statement you're making.
Yes.

If you describe stealing and cheating as taking a disproportionate amount of wealth for the amount of effort you put in, and lying as saying that this system benefits everyone then all rich people have.

EDIT: To Kepor: True, I'm just saying. Actually, I could rephrase to "how much the work is valued" and still feel that my point is justified.

[Kepor]

Yes.

If you describe stealing and cheating as taking a disproportionate amount of wealth for the amount of effort you put in, and lying as saying that this system benefits everyone then all rich people have.

Well, price and wage have never been about how much effort is put in, but about how much value is attached to your work.

[Eldezar]

All of them? One of my mottos is "generalizing will kill us all". Not sure why I've been defending big business, it just seems like a rather large blanket statement you're making.

Generalizing works in quite a few economic situations. And yes, there are always exceptions, but very very few. Just check out Bilderburg. The 150-300 wealthiest people in the world get together at least once a year to discuss how they can manipulate to their benefit. Some of the biggest discussions have been mass genocide.

One of the biggest factors in getting to the top of a business is that you have to be like the people above you. If your superiors like golf, you better buy a set of clubs. If they dress a certain way, then you may want to dress that way, too. Those are just the examples given in just about every supervision and leadership textbook. However, this also applies to your morals in a way as well. If your boss in an honest person, they will look for other honest people to work alongside them. Similarly, if your boss stepped on others and got ahead by cheating, then odds are they want people that will do the best thing for the company, or do something that makes the boss look good, regardless of who they hurt along the way.

The thing about this, is that he honest person can only get ahead with an honest boss, whereas the dishonest person can pretend to be honest and still trick people into getting to the top. It's those people that are pretty much ruling the world today.

[Bob The Mercenary]

Generalizing works in quite a few economic situations. And yes, there are always exceptions, but very very few. Just check out Bilderburg. The 150-300 wealthiest people in the world get together at least once a year to discuss how they can manipulate to their benefit. Some of the biggest discussions have been mass genocide.

Seeing as everyone's against me on this one, there logically must be something to it. But, I think the premise in your post is flawed by grouping U.S. white collars with genocide. That and the fact that I'm usually very skeptical when it comes to conspiracy theories.

[Si Civa]

For European countries. IIRC Sweden for example has a flat 30% tax or something like that?

Sweden and other Nordic countries are different from other European contries when talking about taxing and other economy things as they are (supposed to be anyway) somewhat social democratic (or social liberalistic?) and the biggesst political party in Sweden is Swedish Social Democratic Party (http://en.wikipedia.org/wiki/Swedish_Social_Democratic_Party) which ideology little bit tells about the tax ration.
There has been discussion in Finland (and probably Sweden too) though that those, who have high education, will move to other European countries because it's not profitable to work here because of taxes.
Left party is also losing step everywhere in European, so things can really be different in future.

Some other European countries are more liberal in enocomic fashion, Great-Britain being pretty good example. And really, European is very diverse continent all things consired.

Sorry about the interruption.

[ZAKtheGeek]

Actually more businesses mean more jobs and spending and all that. Monopolies (Microsoft) only come up when they can control a niche market. You want the new products, and better services, have businesses fight each other. That usually does a LOT to drive down prices on things. Kinda like a $300 GB hard drive used to be ~$1500 3 or four years ago when only a few manufacturers made it.
Okay, I need to revise my statement. I should have written "the rich" (top 1% or whatever) instead of "businesses." They are supposed to do the things I wrote largely via the businesses they own or have power in. My point being, "tax cuts for the rich/big business" is flawed based on this because money can just pool at the top without trickling down any. Anyway, what kind of policy is supposed to "make businesses fight each other?"

There's stuff to say about monopolies but I don't really want to get into it since that's a whole other discussion.

[Eldezar]

Seeing as everyone's against me on this one, there logically must be something to it. But, I think the premise in your post is flawed by grouping U.S. white collars with genocide. That and the fact that I'm usually very skeptical when it comes to conspiracy theories.

That's probably because you associate conspiracy theorists with tin foil helmets so the government can't lock on to your brain waves. However, it is strange that you take to conspiracy with such skepticism when conspiracies have been uncovered very frequently throughout history. And really, you honestly believe that that government, which controls the media, won't use their power to conspire with each other? People are greedy, there is no doubt about it. Power corrupts most people. Greedy plus corruption equals conspiracies.