Liberal tactics

Pay for a given skill should be set by the market. The market is what people are willing to pay. It does seem out of wack what professional athletes get paid, but the market sustains their salary. The same goes for doctors, lawyers, CEO's etc. I have never understood why so many get upset at a CEO making a bonus. It is their company, and their money. If I do not like it, I respond by not buying his product or service, not passing a law putting him under a burden of retaliatory regulations.

The market has set the order of skills and what they get paid. If I want to make more money, I either work two jobs, or improve my skills to make more for the given market. I do not pass a law making a owner of a company pay a certain amount.

I have no problem with laws that ensure a safe work environment, and the like. I doubt the existing minimum wage laws will ever be repealed under any administration. Now, minimum wage laws are not the only thing that warp the market. How about a custodian that works for NYC government making more than a teacher in Kentucky?

I think the best environment I have seen for a workplace is the Japanese model. In that environment, management and workers have complete trust in each other, and there is not the constant bickering and fighting that goes on in so many companies. They are union free, the company pays a high wage, management runs the company in an efficient manner, the benefits are good, and productivity and morale are very high. Usually profit is high.

 

:thumbsup::thumbsup: Toyota over in Scott County is exactly as you say.

 

Wish it were only econ they skipped. The biggest problem is that they skipped any class that remotely related to common sense.

 

Henry Ford claimed he got rich by paying his workers enough to buy his cars.
Something like that.

Should workers be paid enough to buy the products they manufacture?

 

>How about a custodian that works for NYC government making more than a teacher in Kentucky?

Because the cost of living in NYC is much higher than in Kentucky. As is the standard of living.

 

Everyone should be paid the highest wage the market will allow, and a reasonable profit for the company creating the jobs.

 

billionaire tells it like it is

http://roundtable.nationaljournal.com/2012/05/the-inequality-speech-that-ted-wont-show-you.php




It is astounding how significantly one idea can shape a society and its policies. Consider this one.

If taxes on the rich go up, job creation will go down.

This idea is an article of faith for republicans and seldom challenged by democrats and has shaped much of today's economic landscape.

But sometimes the ideas that we know to be true are dead wrong. For thousands of years people were sure that earth was at the center of the universe. It's not, and an astronomer who still believed that it was, would do some lousy astronomy.

In the same way, a policy maker who believed that the rich and businesses are "job creators" and therefore should not be taxed, would make equally bad policy.

I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.

That's why I can say with confidence that rich people don't create jobs, nor do businesses, large or small. What does lead to more employment is a "circle of life" like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it's a little like squirrels taking credit for creating evolution. In fact, it's the other way around.

Anyone who's ever run a business knows that hiring more people is a capitalists course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn't just inaccurate, it's disingenuous.

That's why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.

Since 1980 the share of income for the richest Americans has more than tripled while effective tax rates have declined by close to 50%.

If it were true that lower tax rates and more wealth for the wealthy would lead to more job creation, then today we would be drowning in jobs. And yet unemployment and under-employment is at record highs.

Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, we go out to eat with friends and family only occasionally.

I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new clothes or cars or enjoy any meals out. Or to make up for the decreasing consumption of the vast majority of American families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.
Here's an incredible fact. If the typical American family still got today the same share of income they earned in 1980, they would earn about 25% more and have an astounding $13,000 more a year. Where would the economy be if that were the case?

Significant privileges have come to capitalists like me for being perceived as "job creators" at the center of the economic universe, and the language and metaphors we use to defend the fairness of the current social and economic arrangements is telling. For instance, it is a small step from "job creator" to "The Creator". We did not accidentally choose this language. It is only honest to admit that calling oneself a "job creator" is both an assertion about how economics works and the a claim on status and privileges.

The extraordinary differential between a 15% tax rate on capital gains, dividends, and carried interest for capitalists, and the 35% top marginal rate on work for ordinary Americans is a privilege that is hard to justify without just a touch of deification

We've had it backward for the last 30 years. Rich businesspeople like me don't create jobs. Rather they are a consequence of an eco-systemic feedback loop animated by middle-class consumers, and when they thrive, businesses grow and hire, and owners profit. That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

So here's an idea worth spreading.

In a capitalist economy, the true job creators are consumers, the middle class. And taxing the rich to make investments that grow the middle class, is the single smartest thing we can do for the middle class, the poor and the rich.

 

The people I know who sold small businesses last year were very happy the cap gain tax was only 15% (Bush tax cuts). They were smart to sell last year because we never know what Congress is going to do. They weren't wealthy, they were small business owners.

I don't know what kinds of businesses you have had and how much money you made or your net worth, but if you are wanting to help redistribute the wealth, I'll give you my address and you can drop me a check in the mail. I will be happy to take even the IRS limit on a gift for this year. I can be your little sis! :laugh:

BTW, bill, that was the longest post I've ever seen you post here. While I don't agree with you, thank you for all the time and effort you put into it. :thumbs:

 

Thank you for this. My Dad would give you a hug, this is basically what he's been saying for years (and he's a 'yellow dog' democrat). He despises the 'trickle down' theory of economics, and he was raised in depression era Appalacia. You've given me much to think about, thanks again.

 

It's obamacare. If obama loses the election, the next morning stocks will soar. And birds will sing. There will be a pot of gold at the end of every rainbow. And business will sigh a sigh of relief and make plans to expand, create more jobs, open branches, put Americans to work. There will be real Hope and real Change in America and a brighter tomorrow. (sigh) :applause:

 

Not to mention that when minimum wage is raised, the supply of jobs reduces. The cost of labor artificially goes up, causing businesses to make cuts by laying off staff that can no longer work to suit the new wage requirements. Teenagers looking for jobs to pay for college and other poor people find the number of available jobs dwindle because companies cannot afford to hire more.

The whole idea of a minimum wage is an artificial restriction on the ability of an employer and employee to negotiate freely.

Central. Economic. Planning. Does. Not. Work... Period.

Understand, bleeding heart liberals?

Inflation is an increase in the supply of money, and that happens from the Fed through borrowing and "open market" operations. Raising the minimum wage causes supply shortages, which has effects similar to inflation just like the famine in Egypt during Joseph's time caused "the money [to] fail." Inflation does provide political excuses to raise the minimum wage perpetually.

 

They should be paid whatever they and their employer can agree on for mutual benefit. There does not need to be a meddling third party with a gun telling one side of a transaction what to do.

 

Many products on the market require a chain of production that must begin with capital formation. This capital formation begins with investment in capital goods--a scarce resource--and leads down the chain to consumer goods. The time differential between consumer demand and capital formation of capital goods does not allow for the demand-side utopia that socialists imagine.

Also, most disruptive technologies that lead to higher standards of living for everyone do not come from consumer demand, but rather from the minds of inventors who desire to make new products and services that cut costs and/or increase supplies. One cannot demand what does not exist in reality. Demand does not create supply, it can only indicate the marginal utility of capital goods.

Ever watch Shark Tank?

Jobs can only come from those who have saved and invested enough capital to supply the tools.

Let's say grandma makes the best apple pie you have ever tasted. She decides to sell her pies in a mall. Some shoppers see her store and try her pies and agree that they are the best they have ever tasted. They become loyal customers and tell their friends and family about these tasty pies.

Did demand for grandma's pies create supply? No. The demand did not exist before the supply. There was no demand for grandma's pies until she supplied them as an entrepreneur. The increased demand can increase the profit motive leading to shifting resources into further capital formation, but demand itself does not create supply. If a drought causes a bad apple season, all the demand in the world cannot create grandma's pies. The demand is dependent on the supply.

I can demand a yacht for $10,000 as loudly as I can muster and I can get my friends to do so as well. All the demand in the world will not get me what I want if the supply of the capital, capital goods, labor, and incentive does not match the demand.

Maybe the problem is that we are overburdening businesses in regulations and tax loopholes. The ones that profit the most from all this red tape garbage are lawyers. No wonder so many companies are moving overseas to countries that are embracing free enterprise more so that the U.S.

You cannot tax and regulate an economy into prosperity. Your view about the state of business in America is complete fiction.

Most rich people do not have "things" proportional to their total wealth the same way poor people do. If some rich people spent their money on things the way many poor do, they would be poor as well. Rich people desire security over "stuff." They want to save for a rainy day, and from this savings amass capital for risk-taking investments to attempt to increase their wealth by meeting more needs of others.

Perhaps because the marginal utility of such vehicles for personal use is negative. The only reason you would own 3,000 cars is if you ran a fleet for some venture. Your stereotype of rich people is flawed.

Because most wealthy people want to be smarter with their capital. The reason many people are poor (who don't have to be) is that they think they are entitled to a lifestyle beyond their means that does not lend itself to what a rich person does anyway.

Maybe the problem is too much consumption in a bubble economy that is not conducive to actual wealth. People throw away perfectly good smart phones to pay $600 for today's model, and then complain that they are poor. Instead of saving, people buy things they don't need with credit, then get up to their eyeballs in debt, and complain that their problem is that they are not rich like the Wall Street fat cats. The problem with many people is that their priorities are out of whack.

Sure, the engine of an economy requires both producers and consumers. The most efficient means of growth, then, is to let these two parties reach a mutual agreement for their benefit without a coercive third party getting their grubby mitts in the way.

How about a simple flat or consumption tax system that doesn't discriminate?

Those who need and pay for the work "create" the jobs. If there were not an offer of a job, there would be no job.

So, let's consume our way to prosperity. Let's take Paul Krugman's advice and amass a massing defense portfolio against a false threat of an alien invasion only to find out there is no threat. Look at all the jobs that created. Look at all the scarce capital goods that were diverted from otherwise productive use into nonproductive use. While we are at it, let's entice more consumers to buy new houses, new cars, big TVs, and better smart phones that they don't need and get into more debt. That way, when the bills come due, the lenders can fail and whine for bailouts. Then, we can tax the successful savers and producers to bail them out.

We would be so much better off.

 

Where does government get the authority to set wages? They take it!