More economics questions

[Professor Smarmiarty]

Originally Posted by 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 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 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]

Originally Posted by Odjn

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]

Originally Posted by Odjn

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.

Originally Posted by AnonCastillo

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]

Originally Posted by AnonCastillo

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.

Originally Posted by AnonCastillo

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.

Originally Posted by AnonCastillo

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]

Originally Posted by Fifthfiend

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.

Originally Posted by Smarty McBarrelpants

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?