14 Oct 09
Originally posted by sh76Well I wasn't talking about entitlements or benefits. I was talking about pay. You use the word "pay" in a way I don't recognize in the context I created with my little dichotomy. Apparently you assume this discussion is only about the USA, which is your prerogative of course. As you will be aware, your story about the Section 8 Housing Assistance guy has little relevance to about 190 countries in the world which face the question of govt intervention v "economic freedom" too. You've laid down your marker about what you presumably see as the 'undeserving poor', nevertheless. Maybe when someone chips in with tales of undeserving poor elsewhere in the world, you'll sense an ideological connection to them.
I'm not sure if I buy the argument that taxing the rich decreases their incentive to work, but I KNOW that I do buy the argument that paying the poor too much with no strings attached decreases their incentive to work.
I have dozens of clients that have told me that going to work doesn't pay for them. Just yesterday, a client told me that he's on Medicaid (f ...[text shortened]... rd to take a full time job that would pay him market wage based on his (limited) skill set.
14 Oct 09
Originally posted by FMFI was only relaying the story in relation to the underlying idea. I understand that in many countries, the poor are treated abysmally and in no way am I criticizing welfare in general.
Well I wasn't talking about entitlements or benefits. I was talking about pay. You use the word "pay" in a way I don't recognize in the context I created with my little dichotomy. Apparently you assume this discussion is only about the USA, which is your prerogative of course. As you will be aware, your story about the Section 8 Housing Assistance guy has little ...[text shortened]... deserving poor elsewhere in the world, you'll sense an ideological connection to them.
But I think that my experience does have relevance in western countries, especially since, at least by reputation, most western countries allocate at least as much assistance to the poor as does the United States, more so in many cases.
14 Oct 09
To keep things brief, I will first say that my position is very much in line with Pal's post. Government's role in an economy should be examined on a case by case basis. Most of us here (on this thread, certainly not the site in general) understand that there are cases where a market absent government intervention is particularly unlikely to deliver socially optimal allocations, judging by the same standard which shows markets to be beautifully efficient in other cases.
Personally, I lean toward markets, and I start with the supposition that a market solution is best. Then I look for the argument claiming that some feature is present which would drive private decisions away from a socially efficient outcome. Then the question is whether those features are strong enough to make the deviations from efficiency sufficiently large to justify government intervention (which I'm sure we all recognize to be wasteful to some degree). There is IMO good reason to be wary of government action, however I think libertarians often take this to the extreme.
Something which bothers me a bit about libertarianism is its equating free markets with individual freedom. That smacks too much of mixing religion or perhaps moral philosophy with economics. I prefer that economics keep the questions of what is or of what likely would be if seperate from the what "ought" to be.
There you go. I didn't even call you one name. 😉
I'll be quite busy the rest of the day and evening and the next day. It may be a while before I respond again.
14 Oct 09
Originally posted by sh76No I don't think you are. But there are those who extrapolate theories from the condition of, and circustances in, the Fourth World and then lay out their nostrums for elsewhere around the globe. You're not really an ideologue, so I don't sense that you do this.
I was only relaying the story in relation to the underlying idea. I understand that in many countries, the poor are treated abysmally and in no way am I criticizing welfare in general.
14 Oct 09
Originally posted by FMFThis goes to the heart of my critique of the libertarian position's consistency. By stating it in such generic maxima, they end up with inconsistencies.
What purpose can it serve if the definitions of it that various contributors bring to the discussion are different ?
Obtaining documentation from an Environment Ministry certifying that a commercial project will have an acceptably low negative impact on bio-diversity in its area of operation - is it paperwork and bureaucracy, so called "red tape", replete wit ...[text shortened]... se political safeguard that is prone to being casually dismissed by calling it "red tape"?
14 Oct 09
Originally posted by telerionGood post.
To keep things brief, I will first say that my position is very much in line with Pal's post. Government's role in an economy should be examined on a case by case basis. Most of us here (on this thread, certainly not the site in general) understand that there are cases where a market absent government intervention is particularly unlikely to deliver socia ...[text shortened]... rest of the day and evening and the next day. It may be a while before I respond again.
I also am bothered by economic libertarianism as an ideology, even though I agree with many of its underlying precepts.
To borrow a line from Jed Bartlett in The West Wing, what are the next ten words? Okay, the first ten words are: "Capitalism is a better driver of markets than government intervention." Fine. What comes next? Which industries does this apply to? Are there exceptions? What are they? What practical ramifications does this have in terms of the ideal level of taxation and spending? I don't think it makes sense to be inherently anti-government. Look at each individual action and expenditure that the government undertakes and judge them individually.
14 Oct 09
Originally posted by sh76And He named it Politics.
...what are the next ten words? Okay, the first ten words are: "Capitalism is a better driver of markets than government intervention." Fine. What comes next? Which industries does this apply to? Are there exceptions? What are they? What practical ramifications does this have in terms of the ideal level of taxation and spending? [...] Look at each individual action and expenditure that the government undertakes and judge them individually.
14 Oct 09
6 edits
Originally posted by eljefejesusWhat makes you think public benefits like pensions are "generous"?
Iwhereas most governments of the world would do well to move much of their spending towards a more libertarian, non-interfearing direction and simply spend less, for example on generous public employee benefits like pensions.
.
The only way you can make this statement is if you are comparing public pensions to those of private pensions, have done an analysis, and have determined that public pensions are more generous than private ones.
I'd bet my grandmother's walking chair that you haven't, but let's assume you at least read a comparison online somewhere from a source that isn't funded by dubious sources.
Even if true, by some reliable measure, the difference between public and private pensions is NOT a case of the governments lavishing their workers with unreasonable perks. Let me repeat, IT'S NOT.
What it is, is simply a reflection of the DECLINE OR ORGANIZED LABOUR! You go on the street, or sit in a bar with your friends, and ask them one simple question..."Hey, what do you guys think of Unions?" Guaranteed all you'll hear is how unions are greedy and ask for way too much.
This wasn't the case back in the day. Back in the people were sick and tired of seeing their bosses reap huge rewards off the backs of their employees. Employees couldn't understand why they were making peanuts and living in crappy homes and dying from a lack of health care while their bosses lived a life of luxury while contributed virtually nothing to the profits of the company. So, labour organized and demanded their share of the profits, as they should have. Part of the share of profits was divided into pension plans for these private employees.
Partially as a response, or in parallel to the rise of labour, company owners took their companies public on the stock exchange and issued shares to shareholders. This meant a hefty payday to company owners and the profits of the company went to shareholders. Shareholders now demanded higher and continued profits and a reduction in labour costs was the easiest way to achieve this. When it came time to Collective bargaining time, the unions held fast and the companies had no choice but to continue sharing profits with their employees or else face a strike in which no profits would be realized and share prices would decline.
This worked great for employees until the advent of electronics and the rise of the internet provided shareholders with their silver bullet...OUTSOURCING. Outsourcing allowed the shareholders and company owners to reduce their labour costs. If a union wouldn't agree to lower labour costs, the company simply shut down and moved to mexico, or china, india etc. This would have been heavily taxed or even illegal under many national and international agrreements but private companies/shareholders pushed their elected governments to remove those barriers by signing free-trade agreements and agreements like GATT and NAFTA were enacted. Trade Barriers which used to discourage outsourcing were removed and the slaughter of the unionized worker was on.
This allowed companies to set up shop in a 3rd world country and sell their product back to the US for a fraction of the production cost, meaning cheaper prices, which meant that foreign based companies could make the same product and sell it for less in our stores. This meant companies that still had workers making products in our country were under pressure to either drop prices or lower their labour costs. Many companies couldnt' compete here with higher labour costs and outsourcing is now the standard.
Stupidly, people started to blame the unions for the job losses, instead of realizing the jobs were being moved in order to maintain or increase profits for shareholders.
Worse, the owners and management of companies are paid MASSIVE sums of money and benefits to ensure shareholders get their profits instead of distributing those profits to the workers.
Even worse, and here's the real rub, is that most of us have mutual funds or stocks or some kind of retirement fund that relies on the stockmarket/ bond market etc. It is to our own advantage to see other people make less money at their company. We WANT a company to outsource because it means our stock/mutual funds will go up. We are completely biased now; whether we understand this or not is a different matter.
Public employees never went through this. Governments haven't outsourced. They haven't had to cut labour costs in order to compete. The benefits given to public employees is on par with where private workers SHOULD be.
So, rather than complain that public workers have too "generous" a benefit package, why don't you go out and demand what should rightfully be yours?
Don't get mad just because someone is getting something you yourself should be getting. It's called Envy. If you don't do something about it, then it's your own fault.
ðŸ˜
14 Oct 09
Originally posted by uzlessactually - all economic growth ultimately is the result of businesses finding ways to reduce their costs -- and one of the big "costs" has always been labor.
What makes you think public benefits like pensions are "generous"?
The only way you can make this statement is if you are comparing public pensions to those of private pensions, have done an analysis, and have determined that public pensions are more generous than private ones.
I'd bet my grandmother's walking chair that you haven't, but let's assume yo ...[text shortened]... y. If you don't do something about it, then it's your own fault.
ðŸ˜
so businesses are always looking for some machine that will replace the jobs currently being done by humans -- or they're looking for ways to replaced skilled workers with unskilled ones (who can be paid a lot less) -- or just ways to tap into workers willing to do the same work for lower pay.
14 Oct 09
1 edit
Originally posted by uzlessYou make a good case from the union point of view. However, the other side of the coin is that the unions have to be realistic. You talk of this enormous pie (profits) and how all the workers want is a fair slice of the pie. Fine, but what about the converse? What about when there's no pie left because the company's doing badly? The unions still want pie, but the company doesn't have any more pie. So, the company either goes under or looks for other workers who will take mere bread instead of pie.
What makes you think public benefits like pensions are "generous"?
The only way you can make this statement is if you are comparing public pensions to those of private pensions, have done an analysis, and have determined that public pensions are more generous than private ones.
I'd bet my grandmother's walking chair that you haven't, but let's assume yo y. If you don't do something about it, then it's your own fault.
ðŸ˜
Obviously, the elephant in the room is General Motors. The unions wanted to share in GM's enormous profits in the 60s and 70s. That's fair. But the company did something stupid and promised enormous retirement benefits that would be guaranteed many decades into the future. The corporate negotiators either didn't foresee a time that GM wouldn't be doing well or they simply didn't care because they realized they weren't going to be around in 2009 to take the fall.
so, fast forward to 2008. GM is doing terribly. There's no pie for anyone. (And, yes, the CEO should make 80 million dollars in pie either; I agree with that.) But the unions are still guaranteed retirement benefits as though it were 1970. That's simply not sustainable, regardless of whether it's fair. At that point, it's virtually a given that failure to renegotiate union benefits is going to result in the company going under. Being intractable in that case may not be "greedy" or morally wrong, but it's stupid in the long run. Is it the union's fault any more than the fault of the idiots who negotiated with the union back in the 70s? Maybe not, but that doesn't change the fact that there's no pie left and demanding the pie you're entitled to under negotiated agreements simply is not a viable strategy for the company's future. It's also short sighted on the part of the union in many cases. (Let them eat cake instead!)
I also don't begrudge the entrepreneur making a lot of money taking the company public. He took the risk, he thought of and executed the good idea and there's no reason he shouldn't reap the rewards.
14 Oct 09
Originally posted by MelanerpesRight, and this isn't possible in a unionized environment. The general public has rejected unions so now we are seeing the result. Lower pay and lower benefits.
just ways to tap into workers willing to do the same work for lower pay.
But given that trade barriers have been removed, I don't see a way around this. The point is that it's not right to complain about the public sector when the private sector workers just rolled over and voted sucessive governements into power that essentially put them out of work.
This is progress. Don't get me wrong. But ENVY is not a legitimate reason to bash the public sector.
14 Oct 09
Originally posted by MelanerpesOnly if by "reducing costs", you mean productivity increases (reducing unit costs). Innovation is the only way to achieve long-term growth.
actually - all economic growth ultimately is the result of businesses finding ways to reduce their costs -- and one of the big "costs" has always been labor.
15 Oct 09
4 edits
I have a moment this evening to respond a bit. I want to say that I strongly agree with sh on this point about entrepreneurs. This could be considered a response to Rob's post about greatly increased profit sharing with workers in that other thread.
I think it is telling that when Rob or others propose this sort of thing they always see it as a great boon for workers. This is not at all apparent. The overwhelming majority of entrepreneurs (or capitalists) fail. Can you imagine telling a waitress at a new restaurant, "We're going to invest 90% of your wages (including tips) back into the business. If our restaurant succeeds we'll pay back your wages plus a large bonus. If it fails, we'll keep the money. Better luck next time.". Is this really the sort of thing that these guys advocate? Of course, it isn't. The problem with their thinking is that they only take into account the successes and then argue that the capitalist isn't doing much. Sure it doesn't look so important to be the capitalist when things work. If you take into account the very large risk of failure, you see that the firm is already giving the workers a cut. It's a guaranteed payout succeed or fail. If you think of that, suddenly their position doesn't seem so unfair.
What these guys want is for workers to have all of the upside and none of the downside. They hold none of the risk but get a large fraction of the reward. As an aside I'll point out that that is a recipe for greater unemployment because fewer people will want to be the entrepreneur under this scheme. But let's not get distracted with that. What Rob and others are really saying has nothing to do with workers being invested in the firm. They just want laborers to be paid more, end of story. Well, if that's the case why not argue for increased labor subsidies or increased after-tax transfers or eliminating labor taxes? In fact, I bet that they aren't even talking about all laborers. Are they really lobbying for the six and seven-figure earning workers? Or is this about the middle-income lower blue collar guys? In that case, why not subsidize them and reduce low income tax brackets? I think it's just muddled policy to couch this as giving out vested positions when what they really want is a handout.
15 Oct 09
Originally posted by telerionWhy do I bother? Maybe I should just stick to 'spirituality.'
I have a moment this evening to respond a bit. I want to say that I strongly agree with sh on this point about entrepreneurs. This could be considered a response to Rob's post about greatly increased profit sharing with workers in that other thread.
I think it is telling that when Rob or others propose this sort of thing they always see it as a great b ...[text shortened]... uch this as giving out vested positions when what they really want is a handout.
15 Oct 09
Originally posted by rwingettOr better yet, go out and build one of these businesses you're so fond of where everyone gets to vote on rate of pay, holidays, free health care, profit sharing and what color the office get's painted. If it's such a good idea it will be a huge success and businesses will follow the example everywhere.
Why do I bother? Maybe I should just stick to 'spirituality.'