Yikes, getting rid of the minimum wage is a terrible idea particularly if you were hoping those workers were going to be stimulating the economy by actually buying stuff. People cannot live on minimum wage alone and unfortunately that's where most of the new job are created. The lower income having extra discretionary income are actually more likely spend it rather than squirrel it away or invest in foreign markets.
But I get that raising minimum wage hurts small business. But I wonder, is it at all possible to raise minimum wages on the big box stores? That is if a company has over x amount of employees, they need to pay +y more and perhaps scale it again if the company reaches another threshold of employee numbers.
See the biggest problem with big business vs little business is that big business can drop prices like crazy, but can still make a profit because of the amount they sell. That's how it's supposed to work but the big businesses can drive it so far down that they can drive the price of labour down as well and to stay competitive, small businesses have to follow suit. My uncle ran a small grocery store and could buy produce from Superstore cheaper than he could buy from his suppliers. But Superstore has perhaps the weakest 'union' I've ever seen as all the working hours are kept just below full time to avoid paying benefits. And so you get the revolving door of employees. (10 cent raise after 6 months. Yay. You work 6 hours and get 60 extra cents. You can find that much in the parking lot.)
But if minimum wages were raised for bigger businesses, they would have to raise their prices a bit, but that would help small business to stay competitive and might give the employees on the lowest rung a little more money to spend on big or little business.
Well you're wrong. It's better to have a job than not have a job. In the end people will jump over the under -minimum wage jobs too the moment that minimum wages get repealed because like I said it's better to have a job than not have a job, and it's really hard for a business to be profitable at all, especially if it's new in these times, you have incredibly high standards for a business.
No one is making people work for under minimum wage jobs... the thing is that if these jobs were legal people would gladly take them.
Would abolishing the minimum wage raise employment rates? Obviously.
Would it raise the standard of living for people? No. Would it act to widen the wealth gap even further? Yes. Would it cause people that have jobs now have lower wages? Yes.
The second you get rid of the minimum wage is the second that people who are currently working for minimum wage take a massive pay-cut. Anyone who would be working near minimum wage would probably also take a massive pay-cut. And no, there is not necessarily a reason that the employer would hire more employees. There is not necessarily a reason why those employees would actually leave their jobs because a job is better than no job.
Low-wage employees will probably have to take a second (or third) low-wage job in order to compensate for the pay cut. No, abolishing the minimum wage does not help workers. The American minimum wage is already quite low to be honest.
On September 14 2011 09:24 Falling wrote: Yikes, getting rid of the minimum wage is a terrible idea particularly if you were hoping those workers were going to be stimulating the economy by actually buying stuff. People cannot live on minimum wage alone and unfortunately that's where most of the new job are created. The lower income having extra discretionary income are actually more likely spend it rather than squirrel it away or invest in foreign markets.
spending doesn't stimulate our economy anymore, it stimulates china's economy because we buy their stuff.
Getting rid of the minimum wage would help grow the economy, because businesses would be able to afford more workers, which would result in them having more productivity which in turn would result in them being able to provide higher wages.
But I get that raising minimum wage hurts small business. But I wonder, is it at all possible to raise minimum wages on the big box stores? That is if a company has over x amount of employees, they need to pay +y more and perhaps scale it again if the company reaches another threshold of employee numbers.
God damn it....... Watch
all these arbitrary rules and regulations are bad they're only hurting the employees in the end. Look at how much the government tries to favor the employees over the employers (obviously because employee votes far outnumber employers,) and then look how many people don't have a job.
See the biggest problem with big business vs little business is that big business can drop prices like crazy, but can still make a profit because of the amount they sell. That's how it's supposed to work but the big businesses can drive it so far down that they can drive the price of labour down as well and to stay competitive, small businesses have to follow suit. My uncle ran a small grocery store and could buy produce from Superstore cheaper than he could buy from his suppliers. But Superstore has perhaps the weakest 'union' I've ever seen as all the working hours are kept just below full time to avoid paying benefits. And so you get the revolving door of employees. (10 cent raise after 6 months. Yay. You work 6 hours and get 60 extra cents. You can find that much in the parking lot.)
But if minimum wages were raised for bigger businesses, they would have to raise their prices a bit, but that would help small business to stay competitive and might give the employees on the lowest rung a little more money to spend on big or little business.
I don't know. Am I way off with this?
Do you notice how all the jobs we're mentioning is working at a place that sells stuff rather than makes stuff? ... Yeah that's the problem. The truth is that in order to get economy back on track we will have to go through a massive contraction and tons of people that have jobs selling stuff will probably lose them. The stimulus saves the jobs of the salesmen which continue to sell our country into debt. There's not easy solution here at all.
You're not way off on this in the sense that there's really no good decision to make in the short term at all, but from the long term economic decision there is a RIGHT decision to make.
I miss the days when this thread was about bashing Republicans and not about people pretending they understand anything about economics.
Honestly, there's nothing wrong with saying "I support this policy because I think it is morally correct." You don't have to pretend or claim that it is also efficient or economical. Most moral policies aren't.
On September 14 2011 09:24 Falling wrote: Yikes, getting rid of the minimum wage is a terrible idea particularly if you were hoping those workers were going to be stimulating the economy by actually buying stuff. People cannot live on minimum wage alone and unfortunately that's where most of the new job are created. The lower income having extra discretionary income are actually more likely spend it rather than squirrel it away or invest in foreign markets.
spending doesn't stimulate our economy anymore, it stimulates china's economy because we buy their stuff.
Getting rid of the minimum wage would help grow the economy, because businesses would be able to afford more workers, which would result in them having more productivity which in turn would result in them being able to provide higher wages.
But I get that raising minimum wage hurts small business. But I wonder, is it at all possible to raise minimum wages on the big box stores? That is if a company has over x amount of employees, they need to pay +y more and perhaps scale it again if the company reaches another threshold of employee numbers.
all these arbitrary rules and regulations are bad they're only hurting the employees in the end. Look at how much the government tries to favor the employees over the employers (obviously because employee votes far outnumber employers,) and then look how many people don't have a job.
See the biggest problem with big business vs little business is that big business can drop prices like crazy, but can still make a profit because of the amount they sell. That's how it's supposed to work but the big businesses can drive it so far down that they can drive the price of labour down as well and to stay competitive, small businesses have to follow suit. My uncle ran a small grocery store and could buy produce from Superstore cheaper than he could buy from his suppliers. But Superstore has perhaps the weakest 'union' I've ever seen as all the working hours are kept just below full time to avoid paying benefits. And so you get the revolving door of employees. (10 cent raise after 6 months. Yay. You work 6 hours and get 60 extra cents. You can find that much in the parking lot.)
But if minimum wages were raised for bigger businesses, they would have to raise their prices a bit, but that would help small business to stay competitive and might give the employees on the lowest rung a little more money to spend on big or little business.
I don't know. Am I way off with this?
Do you notice how all the jobs we're mentioning is working at a place that sells stuff rather than makes stuff? ... Yeah that's the problem. The truth is that in order to get economy back on track we will have to go through a massive contraction and tons of people that have jobs selling stuff will probably lose them. The stimulus saves the jobs of the salesmen which continue to sell our country into debt. There's not easy solution here at all.
You're not way off on this in the sense that there's really no good decision to make in the short term at all, but from the long term economic decision there is a RIGHT decision to make.
Read his post again. Removing the minimum wage is an absolutely terrible idea.
Well you're wrong. It's better to have a job than not have a job. In the end people will jump over the under -minimum wage jobs too the moment that minimum wages get repealed because like I said it's better to have a job than not have a job, and it's really hard for a business to be profitable at all, especially if it's new in these times, you have incredibly high standards for a business.
No one is making people work for under minimum wage jobs... the thing is that if these jobs were legal people would gladly take them.
Would abolishing the minimum wage raise employment rates? Obviously.
Would it raise the standard of living for people? No. Would it act to widen the wealth gap even further? Yes. Would it cause people that have jobs now have lower wages? Yes.
Look right now, there are business that could maybe hire more people that currently don't have jobs at all to create more profit, and then gradually provide better compensation.
The sad truth is that with the unemployment so high it's gonna take a while before the unskilled laborer will have much bargaining power for his wages. He still has some, because even unskilled labor requires some skills, but at the very least all these people that have no jobs at all will have something to do.
The funny thing is that it could help the economy greatly, because remember wealth isn't about paper money but it is about creating stuff. Right now there are 15ish? (not sure about the correct number) % of all the people not doing anything, if they were allowed to be paid less, then in total a lot more stuff would be made which would drive prices on those things down, which would allow our local goods to compete in price/quality with the imported ones, which would allow our businesses to make more money which would allow these businesses to hire more people, or force them to increase the wages for the existing workers once the unemployment is considerably decreased.
You can say whatever you want about the wealth gap, because right now 15ish% of people are sitting with no wages which are 8 dollars an hour gap away from people with minimum wage jobs, when they could very well be equally competent to do them.
The second you get rid of the minimum wage is the second that people who are currently working for minimum wage take a massive pay-cut. Anyone who would be working near minimum wage would probably also take a massive pay-cut. And no, there is not necessarily a reason that the employer would hire more employees. There is not necessarily a reason why those employees would actually leave their jobs because a job is better than no job.
They take a massive pay-cut yes, but in favor of more people getting hired, at first probably more people getting hired for the same total labor cost, but this would higher the productivity which would lead to even more people getting hired at an even higher total labor cost, and then at some point unemployment will be shrunk, and the employees will have more bargaining power with employers on wages.
as of right now, the government is trying to protect the employees so much that no employer wants to hire them... how about that for protection?
But minimum wage really only effects the service industry. All the manufacturing jobs (that are still left) are old unions from an earlier time that first time cut throat capitalism kicked in. In that case, manufacturers could drive down price of labour indefinitely with the surplus labour due to mechanizing agriculture.
So, while I could see tackling the old unions to make manufacturing more competitive, I don't see why you would go after the college student or single parent working in the service industry for minimum wage.
In addition, there's the problem of not in my back yard, at least in western Canada. Our economy is built on primary resources and we just ship them away to other countries to manufacture. But even the primary industry became mechanized decreasing the amount of labour needed. But try and create a factory or manufacturing plant in BC? Oh, watch out for the environmental protesters. Better the pollution is in China then here. (Aesthetics as well.) Plus, there's no-way North America can compete with third world labour prices and lack of environmental protection.
Also, I think the North American work ethic has changed. Education gears everyone to university for some office job or something to do with the so-called information revolution. North America does not value manual labour/ getting dirty.
Heck, my neighbour has to hire Mexicans to pick rocks and black berries for their winery. Farmers have a very hard time finding hired help around here these days.
On September 14 2011 09:24 Falling wrote: Yikes, getting rid of the minimum wage is a terrible idea particularly if you were hoping those workers were going to be stimulating the economy by actually buying stuff. People cannot live on minimum wage alone and unfortunately that's where most of the new job are created. The lower income having extra discretionary income are actually more likely spend it rather than squirrel it away or invest in foreign markets.
spending doesn't stimulate our economy anymore, it stimulates china's economy because we buy their stuff.
Getting rid of the minimum wage would help grow the economy, because businesses would be able to afford more workers, which would result in them having more productivity which in turn would result in them being able to provide higher wages.
But I get that raising minimum wage hurts small business. But I wonder, is it at all possible to raise minimum wages on the big box stores? That is if a company has over x amount of employees, they need to pay +y more and perhaps scale it again if the company reaches another threshold of employee numbers.
all these arbitrary rules and regulations are bad they're only hurting the employees in the end. Look at how much the government tries to favor the employees over the employers (obviously because employee votes far outnumber employers,) and then look how many people don't have a job.
See the biggest problem with big business vs little business is that big business can drop prices like crazy, but can still make a profit because of the amount they sell. That's how it's supposed to work but the big businesses can drive it so far down that they can drive the price of labour down as well and to stay competitive, small businesses have to follow suit. My uncle ran a small grocery store and could buy produce from Superstore cheaper than he could buy from his suppliers. But Superstore has perhaps the weakest 'union' I've ever seen as all the working hours are kept just below full time to avoid paying benefits. And so you get the revolving door of employees. (10 cent raise after 6 months. Yay. You work 6 hours and get 60 extra cents. You can find that much in the parking lot.)
But if minimum wages were raised for bigger businesses, they would have to raise their prices a bit, but that would help small business to stay competitive and might give the employees on the lowest rung a little more money to spend on big or little business.
I don't know. Am I way off with this?
Do you notice how all the jobs we're mentioning is working at a place that sells stuff rather than makes stuff? ... Yeah that's the problem. The truth is that in order to get economy back on track we will have to go through a massive contraction and tons of people that have jobs selling stuff will probably lose them. The stimulus saves the jobs of the salesmen which continue to sell our country into debt. There's not easy solution here at all.
You're not way off on this in the sense that there's really no good decision to make in the short term at all, but from the long term economic decision there is a RIGHT decision to make.
Read his post again. Removing the minimum wage is an absolutely terrible idea.
Read it again... he's on track but has the wrong conclusion.
He doesn't understand that there's no way that the total money that gets paid to the minimum and below wage workers will actually decrease if the law would be removed.
Minimum wages are pricing the employees out of work. If they were decreased, then businesses would higher more people at first for the same total money (worst case scenario, as some could just hire extras for less pay without cutting the others' wages,) but since this would improve the productivity the businesses would be able to hire even more people since they'd make a larger profit.
On September 13 2011 23:50 Whitewing wrote: [quote]
You're so wrong it's astounding.
Reaganomics were so full of shit it's not even funny. BTW, Reagan increased taxes when he was in office. Surprise!
The housing bubble? Yeah, that's a result of the repeal of the Glass-Steagall act. Yes, Clinton did sign it, but it was also passed under a Republican congress. And again, we had a surplus under Clinton as a direct result of his policies. Don't make shit up. And yeah, to get out of a hole, you need to promote economic growth. Economic growth only occurs in times of increased demand for consumption. Increased demand for consumption only occurs when people have more disposable income. In other words, the only way to promote economic growth is to make sure people have more money to spend, which is what the stimulus bill did. And according to a number of institutions (including the Princeton Review), the stimulus was a great idea that wasn't big enough to work because it got cut down repeatedly due to demands from the Republicans in congress, because Obama wanted to compromise and work with them instead of telling them to go fuck themselves.
BTW, Obamacare? Yeah, another word made up by Republicans to make it sound like something really bad and dangerous. Surprise surprise, it's actually amazingly good for insurance companies, and it's not at all a liberal policy.
Get your shit together.
the second half of Reagan's presidency wasn't as good as his first I agree.
of course there was surplus during Clinton that was the bubble growing.
Stimulus doesn't fucking work, how can it. You're taking money from people and giving it back to them but less of it.
The economy doesn't grow from increased consumption... Consuming more than producing leads to debt... What people need to start doing is consuming less than we're producing, then export our excess, pay off our debt, then save real capital, and then invest that money so that we can produce more... There needs to be a recession because continuously giving people money to buy shit doesn't improve our economy, because buying shit doesn't increase the total number of shit to go around it simply redistributes it, and continues to send false signals to business that consumers can still afford more.
health care bill is longer to type than obama care, and it's terrible either way.
It's called the money multiplier. Person A is given $100 from the government. Government spending? $100. He then turns around and saves $20, but spends $80 of it. Person B gets that $80 now has $80 to spend. He saves 20% of it like person A, and now spends $64 of it. Person C gets $64 and saves 20%, spending the rest. $51.2 goes to person D who then spends some. End result? The government spent $100, net gain in production and consumption is MUCH HIGHER. This spending is also taxed, so the government gets some of it back.
The two reasons why the stimulus bill didn't work are as follows: One, the stimulus bill wasn't big enough, they underestimated people's tendency to save money rather than spend, and it needed to be larger. To be fair, Obama's original plan was much bigger, but it was cut down in size drastically in compromise with the Republicans. Secondly, a lot of the jobs it did create went overseas because nobody seems to be interested in making the companies doing business in America hire Americans. This is the biggest problem with our economy right now, all the money goes out of country, and unemployment is high because companies find cheaper labor elsewhere. We need to do something about THIS, but it's not high on anybodies agenda.
To be honest, I don't much like Obama either, but it's important to give credit where credit is due and not make stuff up.
Where does the government get this money? They're already in huge deficit. They either print the money in which case there's inflation, or they go further into debt which also weakens the dollar.
The weakened dollar loses people their purchasing power, so of course people spend less. Especially since they're already in debt.
The solution isn't to spend it's to save... the principle of global economics dictates that if you're consuming more than you're producing you're going to be falling into debt. Either literal debt, or it loses purchasing power of the currency with respect to other currencies. In the end you can't make something out of nothing, and the efficiency of this obviously sucks because whenever money goes through the government tons of it gets stuck.
By giving people money to spend we're not improving our economic fundamentals, our production or industry, and the artificially low interest rates aren't helping. There's an obvious arbitrage going on with the US dollar which makes it foolish to save currency (which is why commodities and precious metals have kept going up in price as they're a way to hedge inflation.) How can money be so cheap (low rates) when everyone is in debt, it doesn't make sense.
The spending doesn't create any more products or wealth it simply allows some people to keep jobs that provide americans with goods and services that the americans shouldn't be able to afford in the middle of a recession. The market needs to go through a contraction to pay off its debt, and the more we keep spending the harder the contraction will be to deal with when it comes.
Short term debt is unimportant, long term debt is. Think about the long run, not the short run. Yes, deficit spending while in debt increases your debt in the short run, but if it increases employment, it leads to a long term recovery. Unfortunately, it won't do that now, because all the jobs that get created still are going overseas, and nobody fucking wants to do anything about it. Nothing pisses me off more than watching big companies get tax breaks to create new jobs and then hire people outside the country because it's cheaper. Hilariously, if this were fixed, it'd be the biggest factor in helping the economy, but not a single candidate has it on their agenda at all. Go fucking figure. (Yes, I'm legitimately angry about this, and it's almost the only thing that has me actually pissed off rather than irritated).
You need real savings to create jobs. While interest rates are kept low savings will be minimum. all the money that gets saved will only be used to pay the interest on the current debt, which is basically just another form of spending. But if the government stops controlling the interest rates like they should, then all of a sudden this short term debt that you say is unimportant will become incredibly important.
and it doesn't lead to long term economy growth, because the money is still originally coming out of the private sector or out of the printing press. The government doesn't create any products (well technically it does like roads and some infrastructure, but it's not that significant on this scale.)
Money is meant to represent wealth which is the ownership of actual stuff. Whenever money is in the hands of the government it's already money that the government forced from the people/businesses, because it's the people that create the products. They are redistributing money amongst those that are most likely to spend it because yes it keeps more people in their jobs, but it also sends a false signal to the businesses. Businesses that are creating services that the american people shouldn't be able to afford SHOULD be contracting. That's why it's called a recession. The more stimulus there is the more people will be able to get the wrong type of jobs, so in the end when the government decides to stop borrowing money and debasing our currency, almost everyone will be in a non-essential job, and they will have to lose their jobs, and then even more people would suffer than if the recession would have been allowed to occur sooner. It's the standard boom and bust cycle.
What are you suggesting they do about companies hiring overseas? You can't stop the companies from hiring where they want to hire. If the american employee has lost his competitive advantage perhaps he's demanding too much of a compensation? minimum wage laws need to be abolished.
Also, right now, inflation isn't a bad thing at all, we're below our target inflation number. I'm not sure why people keep bringing this up as a negative. Also, a lot of people can't afford to wait during a contraction period for the economy to recover: people are losing their homes because they can't find a job due to high unemployment.
It IS a negative, the longer it continues the worse things are gonna get if recession is allowed to hit fully, and if it's not then we'll eventually hit hyper-inflation.
What do you think is gonna happen if China stops inflating their currency along with ours? all of a sudden all the cheap chinese shit we buy will be completely unaffordable because they have so much more exports to us than we have exports to them, that their currency should actually be worth way more than ours, sure they'll lose us as customers, but their quality of living would jump the hell up if they stopped buying our treasury, because their purchasing power would considerably.
Disband minimum wage laws? Are you serious? Do you know how low minimum wage already is in this country? Do you realize how poor the poor actually are? It's not like they can take another salary hit.
Why don't we abolish other so called entitlements then? How about repealing the Fair Labor Standards Act? I mean, kids need to work too, right? And we shouldn't have regulations about what we're allowed to pay them, cause that'd be socialism.
Minimum wage law destroys jobs. Let's be serious now. Businesses need to make a profit. They aren't gonna hire someone for 8 dollars an hour if that person isn't able to produce more than 8 dollars an hour worth of profit to the business... Its not like employers maliciously hate giving people jobs, no... they just don't want to lose money and go out of business.
8 hour work days? Pshhhh, profits will be higher if we make them work 10 or 12 hours a day.
No they won't be. people will get tired and make mistakes.
Time and a half for working overtime? Wow, did Marx himself come up with that one? We can surely do without that.
The weekend? If they want a job they can learn to come in on Saturday and Sunday too.
Overtime pay is terrible for the workers. In fact right now employers don't want people to work overtime even when they can (see example above except for the person didn't get tired and is still needed on the job.)
You will get clocked out when your shift is done, because he'd rather have someone else do that job without having to pay you extra money.
Sick days? Whatever, just replace sick workers. They're risking their jobs having the audacity to want a few days off to recover.
Terrible idea. Workers need training to be efficient.
Safety standards? Look I know the machine sometimes backfires and occasionally takes a thumb or two with it, but honestly it's all part of the risk. They'll get over it.
Some safety liabilities that get put on the employers by the government can be pretty stupid but in the end, it is in the employer's favor to maintain a safe environment for his workers, because once again having to hire new un-experienced employees will end up costing him more.
Please please please have a look at the numerous charts/graphs I posted probably more than once earlier in this thread. The wealth disparity in our nation is unforgivable. Our worker benefits pale in comparison to other civilized nations. And you seriously want to remove minimum wage laws all together? You seem to be advocating some crazy form of neo-feudalism.
I'm not advocating feudalism. The point is right now if your work isn't bringing in more than 8 dollars worth of profit an hour you won't get hired anyways, so if you're in a job chances are you are useful on your job and a pay-cut isn't as likely as you think it is, because you're pulling your weight.
a lot of minimum wage jobs are provided by small businesses... I like how you think that small business owners are some kind of sick freaks that are rolling in cash and are just licking their lips at the idea of cutting their workers' pay even more....
actually if you get rid of minimum wages a kid out of high school with like no skills instead of running up a huge debt going to college and coming out with a degree with which it's still incredibly hard to find a job nowadays can get a very low paying job doing something as simple as passing tools to a mechanic at a car service center, and learn actual valuable marketplace skills that are actually useful, and then he will be able to do a job that's actually worth a higher pay, and he will be able to get hired because he's not totally useless at stuff.
Frankly, you're wrong on many counts, and history has proven it multiple times.
As for what we could do to stop companies from outsourcing jobs, there are multiple things you could do. For one, you could give tax breaks to companies that hire U.S. employees and charge companies a tax for hiring non-Americans, We're basically the largest consumer market on the planet, companies aren't going to leave America because they don't get to hire overseas. *Bam* problem solved.
And no, eliminating minimum wages would be possibly the dumbest thing I've heard on the internet in a long time. Do you want to increase the wealth gap beyond the already ridiculous amount it is? I hear having 50% of the country controlling 2% of the wealth isn't good enough, we need to lower it by making the poor poorer! They don't deserve 2% anyway, they don't work hard and they don't deserve money.
WOW. That's exactly the point... we're the largest consuming market in the world... but no one wants to pay for people to produce here because it's too expensive because we consume so much... so we have the government constantly stimulate our spending with low interest rates, and stimuli, and this keeps devaluing our currency... Until people realize that all this shit that they send here... we will never be able to repay them for it with anything other than paper, because our own private sector isn't capable of competing anymore, so then they'll stop sending us stuff, and there will be absolutely NOTHING left in this country.
edit:
also, if companies are taxed heavily for hiring outside the US they'll move away and just export their stuff here...
You want to isolate ourselves from all the imports with high taxes? Well okay, all outside currencies will go up, as all of a sudden they'll have an abundance of stuff they're not selling to us, and we'll be stuck with the wreckage that is our post-stimulus economy. By the way all the bullshit service sector jobs that are only there to get the foreign products into american homes are also all gonna go poof. at least then it will be blindingly obvious that our economic fundamentals are shit, and we should have been promoting saving by the private sector to rebuild them in the future rather than trying to spend our way out of this situation.
You really know how to add to political and economic discourse.
Economics is not a perfect science, obviously, or there wouldn't be people still looking to discover new things. There are hard problems that existing models are unable to completely explain and the very nature of what is "obvious" or "rational" (rational expectations) in economics breaks down when different people have different internal models of the world.
The biggest problem with "people like you" is that just because someone says they "believe in keynes", you bucket it into the stupidest possible interpretation of Keynes possible. Many supply side economists think (from what I can gather) they Keynesians just want the government to spend infinite money to boost living standards for everyone (or something to that effect).... but Keynesians in America are still Capitalists (in the sense that anyone that doesn't want to abolish social security is a capitalist if they believe in all the other capitalist-type things), still believe that free markets are generally more efficient than the public sector, still believe that unsustainable deficits are bad and require a change in policy, etc, etc, etc
The way you argue economics/politics would be like a Keynesian saying that all supply side economists want 0 tax rates for everyone. Just a stupid exaggeration to try and make the other person look stupid without really coming to any real solution.
of course all supply side economists want 0 tax rates for everyone, but that's not possible. Neither is the spending of infinity money on consumption, but what it comes down to is that it's better to minimize the size of the government and therefore taxes and government spending.
obviously neither absolutes work, but working towards one leads to prosperity, and working towards the other doesn't.
That's not true either, China is deliberately following a policy of keeping their currency worthless compared to ours and lowering theirs in response to ours, because they don't want to consume. Even if ours dropped to the pits they'd still be exporting to us, because the last thing their leaders want right now is for their citizens to spend money on comforts. They're basically stocking up on as many investments and as much money as they can while increasing the size of their production until they eventually hit the maximum point, then they'll stabilize and start spending.
Exchange rates aren't actually that important generally speaking, until the difference becomes extraordinary.
and when they start spending then our money will be worthless in comparison and since all the producing jobs have moved overseas we will have nothing... result of? continuous spending, as opposed of saving to rebuild the economy.
EDIT:
to Whitewing:
The employees are massively over protected... you act like businesses can exist without workers. There's a reason why people aren't hiring, if it was profitable to hire they would... see the video I posted please.
If employees weren't over-protected, why wouldn't everyone hire a bunch of them and bully them around? It doesn't work like that. am I saying that employers should be able to bully their employees? no, but since there's unemployment so high it's obvious that they're protected so much that it's not worth hiring them anymore.
And you tax their imports too if they leave and just try to export here. It's a lose-lose for them, since there will be companies willing to fill in the gap if they just bail. People aren't hiring here in the U.S. not because it isn't profitable to do so, but because it isn't the MOST profitable thing they could do: they can hire elsewhere. Make it less profitable to hire elsewhere, and they'll hire here. Also, companies like a high unemployment rate, it makes the cost of unemployment extremely high and allows them to get away with terrorizing their employees and make unreasonable demands of them. High unemployment rates allow companies to bully them, it's the opposite of being protected.
Contracting the economy solves nothing. It doesn't fix the problem, it leaves millions of people screwed over and winds us up way behind where we should be. What we need to do is increase taxes on the extremely wealthy (yeah, $700 billion isn't nearly enough by itself, but it sure as hell is a great step in the right direction), make the right budget cuts to the right programs (primarily defense spending, but cut back on some of the entitlement programs too), stop the jobs from going overseas and promote hiring here, encourage consumption of products made in the U.S. over overseas products (if we have to, tariff imports more than we do), and keep people spending so we have a reason to keep producing and keep people employed.
And no, our currency won't be worthless, it'll increase in value once our economy starts growing again. It's a short run loss for a long run gain, wheras what you are suggesting is a short run gain for a long run loss.
On September 14 2011 09:45 Falling wrote: But minimum wage really only effects the service industry. All the manufacturing jobs (that are still left) are old unions from an earlier time that first time cut throat capitalism kicked in. In that case, manufacturers could drive down price of labour indefinitely with the surplus labour due to mechanizing agriculture.
So, while I could see tackling the old unions to make manufacturing more competitive, I don't see why you would go after the college student or single parent working in the service industry for minimum wage.
In addition, there's the problem of not in my back yard, at least in western Canada. Our economy is built on primary resources and we just ship them away to other countries to manufacture. But even the primary industry became mechanized decreasing the amount of labour needed. But try and create a factory or manufacturing plant in BC? Oh, watch out for the environmental protesters. Better the pollution is in China then here. (Aesthetics as well.) Plus, there's no-way North America can compete with third world labour prices and lack of environmental protection.
While this is true, not all service industry jobs are empty for the economy, it's the ones that help deliver foreign products are. If the food is grown in america then having an extra person help move it isn't necessarily an empty job. But yes, the unions are a huge reason why our manufacturing isn't competitive in labor cost, and that's why there's a bunch of Labor Laws supporting them that need to be repealed as well because they got there with the hard work of the union lobbyists.
labor laws in general destroy jobs. If we need jobs we need to get rid of labor laws as one of the first things we do... When we're ever in a situation that people would prefer to not work and starve to death as opposed to working for his living (obviously after wellfare is considerably reduced,) it will make sense to wonder whether the employers have too much power, as for now the employers aren't even willing to 90% of the population because of how much the labor laws taxes them.
On September 14 2011 09:24 Falling wrote: Yikes, getting rid of the minimum wage is a terrible idea particularly if you were hoping those workers were going to be stimulating the economy by actually buying stuff. People cannot live on minimum wage alone and unfortunately that's where most of the new job are created. The lower income having extra discretionary income are actually more likely spend it rather than squirrel it away or invest in foreign markets.
spending doesn't stimulate our economy anymore, it stimulates china's economy because we buy their stuff.
Getting rid of the minimum wage would help grow the economy, because businesses would be able to afford more workers, which would result in them having more productivity which in turn would result in them being able to provide higher wages.
But I get that raising minimum wage hurts small business. But I wonder, is it at all possible to raise minimum wages on the big box stores? That is if a company has over x amount of employees, they need to pay +y more and perhaps scale it again if the company reaches another threshold of employee numbers.
all these arbitrary rules and regulations are bad they're only hurting the employees in the end. Look at how much the government tries to favor the employees over the employers (obviously because employee votes far outnumber employers,) and then look how many people don't have a job.
See the biggest problem with big business vs little business is that big business can drop prices like crazy, but can still make a profit because of the amount they sell. That's how it's supposed to work but the big businesses can drive it so far down that they can drive the price of labour down as well and to stay competitive, small businesses have to follow suit. My uncle ran a small grocery store and could buy produce from Superstore cheaper than he could buy from his suppliers. But Superstore has perhaps the weakest 'union' I've ever seen as all the working hours are kept just below full time to avoid paying benefits. And so you get the revolving door of employees. (10 cent raise after 6 months. Yay. You work 6 hours and get 60 extra cents. You can find that much in the parking lot.)
But if minimum wages were raised for bigger businesses, they would have to raise their prices a bit, but that would help small business to stay competitive and might give the employees on the lowest rung a little more money to spend on big or little business.
I don't know. Am I way off with this?
Do you notice how all the jobs we're mentioning is working at a place that sells stuff rather than makes stuff? ... Yeah that's the problem. The truth is that in order to get economy back on track we will have to go through a massive contraction and tons of people that have jobs selling stuff will probably lose them. The stimulus saves the jobs of the salesmen which continue to sell our country into debt. There's not easy solution here at all.
You're not way off on this in the sense that there's really no good decision to make in the short term at all, but from the long term economic decision there is a RIGHT decision to make.
Read his post again. Removing the minimum wage is an absolutely terrible idea.
Read it again... he's on track but has the wrong conclusion.
He doesn't understand that there's no way that the total money that gets paid to the minimum and below wage workers will actually decrease if the law would be removed.
Minimum wages are pricing the employees out of work. If they were decreased, then businesses would higher more people at first for the same total money (worst case scenario, as some could just hire extras for less pay without cutting the others' wages,) but since this would improve the productivity the businesses would be able to hire even more people since they'd make a larger profit.
Again, who is going to take those other jobs? How about the people who had a massive pay cut because they can't live on such a low wage. So they take a third job. All it does it make people work more for the same amount of money.
Also, that movie was weird. Specifically his point on discrimination. Really the issue isn't race as much as it is gender. There were tons of companies that would only hire women as secretaries and receptionists. The women were also often treated badly. Or only hire pretty women. When you're talking about 50% of the population like that, it's a problem.
Also, the government is spending money on infrastructure and things like that. Even right-wing economists think this is a good idea. When the government spends money on anything, they're paying people to do something. "Printing money" is obviously bad, but that's not actually what the government is doing in this case so I didn't understand his point on that.
the second half of Reagan's presidency wasn't as good as his first I agree.
of course there was surplus during Clinton that was the bubble growing.
Stimulus doesn't fucking work, how can it. You're taking money from people and giving it back to them but less of it.
The economy doesn't grow from increased consumption... Consuming more than producing leads to debt... What people need to start doing is consuming less than we're producing, then export our excess, pay off our debt, then save real capital, and then invest that money so that we can produce more... There needs to be a recession because continuously giving people money to buy shit doesn't improve our economy, because buying shit doesn't increase the total number of shit to go around it simply redistributes it, and continues to send false signals to business that consumers can still afford more.
health care bill is longer to type than obama care, and it's terrible either way.
It's called the money multiplier. Person A is given $100 from the government. Government spending? $100. He then turns around and saves $20, but spends $80 of it. Person B gets that $80 now has $80 to spend. He saves 20% of it like person A, and now spends $64 of it. Person C gets $64 and saves 20%, spending the rest. $51.2 goes to person D who then spends some. End result? The government spent $100, net gain in production and consumption is MUCH HIGHER. This spending is also taxed, so the government gets some of it back.
The two reasons why the stimulus bill didn't work are as follows: One, the stimulus bill wasn't big enough, they underestimated people's tendency to save money rather than spend, and it needed to be larger. To be fair, Obama's original plan was much bigger, but it was cut down in size drastically in compromise with the Republicans. Secondly, a lot of the jobs it did create went overseas because nobody seems to be interested in making the companies doing business in America hire Americans. This is the biggest problem with our economy right now, all the money goes out of country, and unemployment is high because companies find cheaper labor elsewhere. We need to do something about THIS, but it's not high on anybodies agenda.
To be honest, I don't much like Obama either, but it's important to give credit where credit is due and not make stuff up.
Where does the government get this money? They're already in huge deficit. They either print the money in which case there's inflation, or they go further into debt which also weakens the dollar.
The weakened dollar loses people their purchasing power, so of course people spend less. Especially since they're already in debt.
The solution isn't to spend it's to save... the principle of global economics dictates that if you're consuming more than you're producing you're going to be falling into debt. Either literal debt, or it loses purchasing power of the currency with respect to other currencies. In the end you can't make something out of nothing, and the efficiency of this obviously sucks because whenever money goes through the government tons of it gets stuck.
By giving people money to spend we're not improving our economic fundamentals, our production or industry, and the artificially low interest rates aren't helping. There's an obvious arbitrage going on with the US dollar which makes it foolish to save currency (which is why commodities and precious metals have kept going up in price as they're a way to hedge inflation.) How can money be so cheap (low rates) when everyone is in debt, it doesn't make sense.
The spending doesn't create any more products or wealth it simply allows some people to keep jobs that provide americans with goods and services that the americans shouldn't be able to afford in the middle of a recession. The market needs to go through a contraction to pay off its debt, and the more we keep spending the harder the contraction will be to deal with when it comes.
Short term debt is unimportant, long term debt is. Think about the long run, not the short run. Yes, deficit spending while in debt increases your debt in the short run, but if it increases employment, it leads to a long term recovery. Unfortunately, it won't do that now, because all the jobs that get created still are going overseas, and nobody fucking wants to do anything about it. Nothing pisses me off more than watching big companies get tax breaks to create new jobs and then hire people outside the country because it's cheaper. Hilariously, if this were fixed, it'd be the biggest factor in helping the economy, but not a single candidate has it on their agenda at all. Go fucking figure. (Yes, I'm legitimately angry about this, and it's almost the only thing that has me actually pissed off rather than irritated).
You need real savings to create jobs. While interest rates are kept low savings will be minimum. all the money that gets saved will only be used to pay the interest on the current debt, which is basically just another form of spending. But if the government stops controlling the interest rates like they should, then all of a sudden this short term debt that you say is unimportant will become incredibly important.
and it doesn't lead to long term economy growth, because the money is still originally coming out of the private sector or out of the printing press. The government doesn't create any products (well technically it does like roads and some infrastructure, but it's not that significant on this scale.)
Money is meant to represent wealth which is the ownership of actual stuff. Whenever money is in the hands of the government it's already money that the government forced from the people/businesses, because it's the people that create the products. They are redistributing money amongst those that are most likely to spend it because yes it keeps more people in their jobs, but it also sends a false signal to the businesses. Businesses that are creating services that the american people shouldn't be able to afford SHOULD be contracting. That's why it's called a recession. The more stimulus there is the more people will be able to get the wrong type of jobs, so in the end when the government decides to stop borrowing money and debasing our currency, almost everyone will be in a non-essential job, and they will have to lose their jobs, and then even more people would suffer than if the recession would have been allowed to occur sooner. It's the standard boom and bust cycle.
What are you suggesting they do about companies hiring overseas? You can't stop the companies from hiring where they want to hire. If the american employee has lost his competitive advantage perhaps he's demanding too much of a compensation? minimum wage laws need to be abolished.
Also, right now, inflation isn't a bad thing at all, we're below our target inflation number. I'm not sure why people keep bringing this up as a negative. Also, a lot of people can't afford to wait during a contraction period for the economy to recover: people are losing their homes because they can't find a job due to high unemployment.
It IS a negative, the longer it continues the worse things are gonna get if recession is allowed to hit fully, and if it's not then we'll eventually hit hyper-inflation.
What do you think is gonna happen if China stops inflating their currency along with ours? all of a sudden all the cheap chinese shit we buy will be completely unaffordable because they have so much more exports to us than we have exports to them, that their currency should actually be worth way more than ours, sure they'll lose us as customers, but their quality of living would jump the hell up if they stopped buying our treasury, because their purchasing power would considerably.
Disband minimum wage laws? Are you serious? Do you know how low minimum wage already is in this country? Do you realize how poor the poor actually are? It's not like they can take another salary hit.
Why don't we abolish other so called entitlements then? How about repealing the Fair Labor Standards Act? I mean, kids need to work too, right? And we shouldn't have regulations about what we're allowed to pay them, cause that'd be socialism.
Minimum wage law destroys jobs. Let's be serious now. Businesses need to make a profit. They aren't gonna hire someone for 8 dollars an hour if that person isn't able to produce more than 8 dollars an hour worth of profit to the business... Its not like employers maliciously hate giving people jobs, no... they just don't want to lose money and go out of business.
8 hour work days? Pshhhh, profits will be higher if we make them work 10 or 12 hours a day.
No they won't be. people will get tired and make mistakes.
Time and a half for working overtime? Wow, did Marx himself come up with that one? We can surely do without that.
The weekend? If they want a job they can learn to come in on Saturday and Sunday too.
Overtime pay is terrible for the workers. In fact right now employers don't want people to work overtime even when they can (see example above except for the person didn't get tired and is still needed on the job.)
You will get clocked out when your shift is done, because he'd rather have someone else do that job without having to pay you extra money.
Sick days? Whatever, just replace sick workers. They're risking their jobs having the audacity to want a few days off to recover.
Terrible idea. Workers need training to be efficient.
Safety standards? Look I know the machine sometimes backfires and occasionally takes a thumb or two with it, but honestly it's all part of the risk. They'll get over it.
Some safety liabilities that get put on the employers by the government can be pretty stupid but in the end, it is in the employer's favor to maintain a safe environment for his workers, because once again having to hire new un-experienced employees will end up costing him more.
Please please please have a look at the numerous charts/graphs I posted probably more than once earlier in this thread. The wealth disparity in our nation is unforgivable. Our worker benefits pale in comparison to other civilized nations. And you seriously want to remove minimum wage laws all together? You seem to be advocating some crazy form of neo-feudalism.
I'm not advocating feudalism. The point is right now if your work isn't bringing in more than 8 dollars worth of profit an hour you won't get hired anyways, so if you're in a job chances are you are useful on your job and a pay-cut isn't as likely as you think it is, because you're pulling your weight.
a lot of minimum wage jobs are provided by small businesses... I like how you think that small business owners are some kind of sick freaks that are rolling in cash and are just licking their lips at the idea of cutting their workers' pay even more....
actually if you get rid of minimum wages a kid out of high school with like no skills instead of running up a huge debt going to college and coming out with a degree with which it's still incredibly hard to find a job nowadays can get a very low paying job doing something as simple as passing tools to a mechanic at a car service center, and learn actual valuable marketplace skills that are actually useful, and then he will be able to do a job that's actually worth a higher pay, and he will be able to get hired because he's not totally useless at stuff.
Frankly, you're wrong on many counts, and history has proven it multiple times.
As for what we could do to stop companies from outsourcing jobs, there are multiple things you could do. For one, you could give tax breaks to companies that hire U.S. employees and charge companies a tax for hiring non-Americans, We're basically the largest consumer market on the planet, companies aren't going to leave America because they don't get to hire overseas. *Bam* problem solved.
And no, eliminating minimum wages would be possibly the dumbest thing I've heard on the internet in a long time. Do you want to increase the wealth gap beyond the already ridiculous amount it is? I hear having 50% of the country controlling 2% of the wealth isn't good enough, we need to lower it by making the poor poorer! They don't deserve 2% anyway, they don't work hard and they don't deserve money.
WOW. That's exactly the point... we're the largest consuming market in the world... but no one wants to pay for people to produce here because it's too expensive because we consume so much... so we have the government constantly stimulate our spending with low interest rates, and stimuli, and this keeps devaluing our currency... Until people realize that all this shit that they send here... we will never be able to repay them for it with anything other than paper, because our own private sector isn't capable of competing anymore, so then they'll stop sending us stuff, and there will be absolutely NOTHING left in this country.
edit:
also, if companies are taxed heavily for hiring outside the US they'll move away and just export their stuff here...
You want to isolate ourselves from all the imports with high taxes? Well okay, all outside currencies will go up, as all of a sudden they'll have an abundance of stuff they're not selling to us, and we'll be stuck with the wreckage that is our post-stimulus economy. By the way all the bullshit service sector jobs that are only there to get the foreign products into american homes are also all gonna go poof. at least then it will be blindingly obvious that our economic fundamentals are shit, and we should have been promoting saving by the private sector to rebuild them in the future rather than trying to spend our way out of this situation.
You really know how to add to political and economic discourse.
Economics is not a perfect science, obviously, or there wouldn't be people still looking to discover new things. There are hard problems that existing models are unable to completely explain and the very nature of what is "obvious" or "rational" (rational expectations) in economics breaks down when different people have different internal models of the world.
The biggest problem with "people like you" is that just because someone says they "believe in keynes", you bucket it into the stupidest possible interpretation of Keynes possible. Many supply side economists think (from what I can gather) they Keynesians just want the government to spend infinite money to boost living standards for everyone (or something to that effect).... but Keynesians in America are still Capitalists (in the sense that anyone that doesn't want to abolish social security is a capitalist if they believe in all the other capitalist-type things), still believe that free markets are generally more efficient than the public sector, still believe that unsustainable deficits are bad and require a change in policy, etc, etc, etc
The way you argue economics/politics would be like a Keynesian saying that all supply side economists want 0 tax rates for everyone. Just a stupid exaggeration to try and make the other person look stupid without really coming to any real solution.
of course all supply side economists want 0 tax rates for everyone, but that's not possible. Neither is the spending of infinity money on consumption, but what it comes down to is that it's better to minimize the size of the government and therefore taxes and government spending.
obviously neither absolutes work, but working towards one leads to prosperity, and working towards the other doesn't.
That's not true either, China is deliberately following a policy of keeping their currency worthless compared to ours and lowering theirs in response to ours, because they don't want to consume. Even if ours dropped to the pits they'd still be exporting to us, because the last thing their leaders want right now is for their citizens to spend money on comforts. They're basically stocking up on as many investments and as much money as they can while increasing the size of their production until they eventually hit the maximum point, then they'll stabilize and start spending.
Exchange rates aren't actually that important generally speaking, until the difference becomes extraordinary.
and when they start spending then our money will be worthless in comparison and since all the producing jobs have moved overseas we will have nothing... result of? continuous spending, as opposed of saving to rebuild the economy.
EDIT:
to Whitewing:
The employees are massively over protected... you act like businesses can exist without workers. There's a reason why people aren't hiring, if it was profitable to hire they would... see the video I posted please.
If employees weren't over-protected, why wouldn't everyone hire a bunch of them and bully them around? It doesn't work like that. am I saying that employers should be able to bully their employees? no, but since there's unemployment so high it's obvious that they're protected so much that it's not worth hiring them anymore.
And you tax their imports too if they leave and just try to export here. It's a lose-lose for them, since there will be companies willing to fill in the gap if they just bail. People aren't hiring here in the U.S. not because it isn't profitable to do so, but because it isn't the MOST profitable thing they could do: they can hire elsewhere. Make it less profitable to hire elsewhere, and they'll hire here. Also, companies like a high unemployment rate, it makes the cost of unemployment extremely high and allows them to get away with terrorizing their employees and make unreasonable demands of them. High unemployment rates allow companies to bully them, it's the opposite of being protected.
Contracting the economy solves nothing. It doesn't fix the problem, it leaves millions of people screwed over and winds us up way behind where we should be. What we need to do is increase taxes on the extremely wealthy (yeah, $700 billion isn't nearly enough by itself, but it sure as hell is a great step in the right direction), make the right budget cuts to the right programs (primarily defense spending, but cut back on some of the entitlement programs too), stop the jobs from going overseas and promote hiring here, encourage consumption of products made in the U.S. over overseas products (if we have to, tariff imports more than we do), and keep people spending so we have a reason to keep producing and keep people employed.
And no, our currency won't be worthless, it'll increase in value once our economy starts growing again. It's a short run loss for a long run gain, wheras what you are suggesting is a short run gain for a long run loss.
all the jobs that spending protects are the jobs of people selling foreign products... I've said this 5 billion times.
You wonna kick out the imports? ok, well then all the people with the service sector jobs selling chinese stuff here will lose their jobs, If you give people more money to spend via debasing our currency.... Well then they'll still buy Chinese goods, the moment that our goods become cheaper than chinese goods all the people selling will lose jobs because we're no longer capable to produce as much as we want to consume.
The contraction is inevitable in your scenario as well, except that in my scenario we can start to curb the inflation, while in yours it's running wild.
On September 14 2011 09:24 Falling wrote: Yikes, getting rid of the minimum wage is a terrible idea particularly if you were hoping those workers were going to be stimulating the economy by actually buying stuff. People cannot live on minimum wage alone and unfortunately that's where most of the new job are created. The lower income having extra discretionary income are actually more likely spend it rather than squirrel it away or invest in foreign markets.
spending doesn't stimulate our economy anymore, it stimulates china's economy because we buy their stuff.
Getting rid of the minimum wage would help grow the economy, because businesses would be able to afford more workers, which would result in them having more productivity which in turn would result in them being able to provide higher wages.
But I get that raising minimum wage hurts small business. But I wonder, is it at all possible to raise minimum wages on the big box stores? That is if a company has over x amount of employees, they need to pay +y more and perhaps scale it again if the company reaches another threshold of employee numbers.
all these arbitrary rules and regulations are bad they're only hurting the employees in the end. Look at how much the government tries to favor the employees over the employers (obviously because employee votes far outnumber employers,) and then look how many people don't have a job.
See the biggest problem with big business vs little business is that big business can drop prices like crazy, but can still make a profit because of the amount they sell. That's how it's supposed to work but the big businesses can drive it so far down that they can drive the price of labour down as well and to stay competitive, small businesses have to follow suit. My uncle ran a small grocery store and could buy produce from Superstore cheaper than he could buy from his suppliers. But Superstore has perhaps the weakest 'union' I've ever seen as all the working hours are kept just below full time to avoid paying benefits. And so you get the revolving door of employees. (10 cent raise after 6 months. Yay. You work 6 hours and get 60 extra cents. You can find that much in the parking lot.)
But if minimum wages were raised for bigger businesses, they would have to raise their prices a bit, but that would help small business to stay competitive and might give the employees on the lowest rung a little more money to spend on big or little business.
I don't know. Am I way off with this?
Do you notice how all the jobs we're mentioning is working at a place that sells stuff rather than makes stuff? ... Yeah that's the problem. The truth is that in order to get economy back on track we will have to go through a massive contraction and tons of people that have jobs selling stuff will probably lose them. The stimulus saves the jobs of the salesmen which continue to sell our country into debt. There's not easy solution here at all.
You're not way off on this in the sense that there's really no good decision to make in the short term at all, but from the long term economic decision there is a RIGHT decision to make.
Read his post again. Removing the minimum wage is an absolutely terrible idea.
Read it again... he's on track but has the wrong conclusion.
He doesn't understand that there's no way that the total money that gets paid to the minimum and below wage workers will actually decrease if the law would be removed.
Minimum wages are pricing the employees out of work. If they were decreased, then businesses would higher more people at first for the same total money (worst case scenario, as some could just hire extras for less pay without cutting the others' wages,) but since this would improve the productivity the businesses would be able to hire even more people since they'd make a larger profit.
Again, who is going to take those other jobs? How about the people who had a massive pay cut because they can't live on such a low wage. So they take a third job. All it does it make people work more for the same amount of money.
Them, or maybe the people who have no jobs at all? Of course more work will be done for less amount of money, but maybe the problem is that there's not enough jobs out there which warrant 8 dollars an hour?
There maybe jobs that can be given for 5 dollars an hour, but those are illegal to offer to people...
Also, that movie was weird. Specifically his point on discrimination.
Depends on where you live, race is an issue, an insanely high employer liability is a huge issue.
Really the issue isn't race as much as it is gender. There were tons of companies that would only hire women as secretaries and receptionists. The women were also often treated badly. Or only hire pretty women. When you're talking about 50% of the population like that, it's a problem.
Yeah... and a large reason why women don't get other jobs is the mandatory provided maternal leave, and other labor laws encouraging racism.
Also, the government is spending money on infrastructure and things like that. Even right-wing economists think this is a good idea. When the government spends money on anything, they're paying people to do something. "Printing money" is obviously bad, but that's not actually what the government is doing in this case so I didn't understand his point on that.
Where does the government get money? The problem with government is that when it contracts stuff it doesn't need to worry about minimizing the cost. When a business does it instead it does minimize the cost so it's more efficient. I'll give you the roads thing, because this is no time for a dramatic reform of roads being funded privately, and maybe it will never be the time for that, but what about the stimulus itself? Yeah... that's clearly wrong.
On September 14 2011 00:48 Whitewing wrote: [quote]
It's called the money multiplier. Person A is given $100 from the government. Government spending? $100. He then turns around and saves $20, but spends $80 of it. Person B gets that $80 now has $80 to spend. He saves 20% of it like person A, and now spends $64 of it. Person C gets $64 and saves 20%, spending the rest. $51.2 goes to person D who then spends some. End result? The government spent $100, net gain in production and consumption is MUCH HIGHER. This spending is also taxed, so the government gets some of it back.
The two reasons why the stimulus bill didn't work are as follows: One, the stimulus bill wasn't big enough, they underestimated people's tendency to save money rather than spend, and it needed to be larger. To be fair, Obama's original plan was much bigger, but it was cut down in size drastically in compromise with the Republicans. Secondly, a lot of the jobs it did create went overseas because nobody seems to be interested in making the companies doing business in America hire Americans. This is the biggest problem with our economy right now, all the money goes out of country, and unemployment is high because companies find cheaper labor elsewhere. We need to do something about THIS, but it's not high on anybodies agenda.
To be honest, I don't much like Obama either, but it's important to give credit where credit is due and not make stuff up.
Where does the government get this money? They're already in huge deficit. They either print the money in which case there's inflation, or they go further into debt which also weakens the dollar.
The weakened dollar loses people their purchasing power, so of course people spend less. Especially since they're already in debt.
The solution isn't to spend it's to save... the principle of global economics dictates that if you're consuming more than you're producing you're going to be falling into debt. Either literal debt, or it loses purchasing power of the currency with respect to other currencies. In the end you can't make something out of nothing, and the efficiency of this obviously sucks because whenever money goes through the government tons of it gets stuck.
By giving people money to spend we're not improving our economic fundamentals, our production or industry, and the artificially low interest rates aren't helping. There's an obvious arbitrage going on with the US dollar which makes it foolish to save currency (which is why commodities and precious metals have kept going up in price as they're a way to hedge inflation.) How can money be so cheap (low rates) when everyone is in debt, it doesn't make sense.
The spending doesn't create any more products or wealth it simply allows some people to keep jobs that provide americans with goods and services that the americans shouldn't be able to afford in the middle of a recession. The market needs to go through a contraction to pay off its debt, and the more we keep spending the harder the contraction will be to deal with when it comes.
Short term debt is unimportant, long term debt is. Think about the long run, not the short run. Yes, deficit spending while in debt increases your debt in the short run, but if it increases employment, it leads to a long term recovery. Unfortunately, it won't do that now, because all the jobs that get created still are going overseas, and nobody fucking wants to do anything about it. Nothing pisses me off more than watching big companies get tax breaks to create new jobs and then hire people outside the country because it's cheaper. Hilariously, if this were fixed, it'd be the biggest factor in helping the economy, but not a single candidate has it on their agenda at all. Go fucking figure. (Yes, I'm legitimately angry about this, and it's almost the only thing that has me actually pissed off rather than irritated).
You need real savings to create jobs. While interest rates are kept low savings will be minimum. all the money that gets saved will only be used to pay the interest on the current debt, which is basically just another form of spending. But if the government stops controlling the interest rates like they should, then all of a sudden this short term debt that you say is unimportant will become incredibly important.
and it doesn't lead to long term economy growth, because the money is still originally coming out of the private sector or out of the printing press. The government doesn't create any products (well technically it does like roads and some infrastructure, but it's not that significant on this scale.)
Money is meant to represent wealth which is the ownership of actual stuff. Whenever money is in the hands of the government it's already money that the government forced from the people/businesses, because it's the people that create the products. They are redistributing money amongst those that are most likely to spend it because yes it keeps more people in their jobs, but it also sends a false signal to the businesses. Businesses that are creating services that the american people shouldn't be able to afford SHOULD be contracting. That's why it's called a recession. The more stimulus there is the more people will be able to get the wrong type of jobs, so in the end when the government decides to stop borrowing money and debasing our currency, almost everyone will be in a non-essential job, and they will have to lose their jobs, and then even more people would suffer than if the recession would have been allowed to occur sooner. It's the standard boom and bust cycle.
What are you suggesting they do about companies hiring overseas? You can't stop the companies from hiring where they want to hire. If the american employee has lost his competitive advantage perhaps he's demanding too much of a compensation? minimum wage laws need to be abolished.
Also, right now, inflation isn't a bad thing at all, we're below our target inflation number. I'm not sure why people keep bringing this up as a negative. Also, a lot of people can't afford to wait during a contraction period for the economy to recover: people are losing their homes because they can't find a job due to high unemployment.
It IS a negative, the longer it continues the worse things are gonna get if recession is allowed to hit fully, and if it's not then we'll eventually hit hyper-inflation.
What do you think is gonna happen if China stops inflating their currency along with ours? all of a sudden all the cheap chinese shit we buy will be completely unaffordable because they have so much more exports to us than we have exports to them, that their currency should actually be worth way more than ours, sure they'll lose us as customers, but their quality of living would jump the hell up if they stopped buying our treasury, because their purchasing power would considerably.
Disband minimum wage laws? Are you serious? Do you know how low minimum wage already is in this country? Do you realize how poor the poor actually are? It's not like they can take another salary hit.
Why don't we abolish other so called entitlements then? How about repealing the Fair Labor Standards Act? I mean, kids need to work too, right? And we shouldn't have regulations about what we're allowed to pay them, cause that'd be socialism.
Minimum wage law destroys jobs. Let's be serious now. Businesses need to make a profit. They aren't gonna hire someone for 8 dollars an hour if that person isn't able to produce more than 8 dollars an hour worth of profit to the business... Its not like employers maliciously hate giving people jobs, no... they just don't want to lose money and go out of business.
8 hour work days? Pshhhh, profits will be higher if we make them work 10 or 12 hours a day.
No they won't be. people will get tired and make mistakes.
Time and a half for working overtime? Wow, did Marx himself come up with that one? We can surely do without that.
The weekend? If they want a job they can learn to come in on Saturday and Sunday too.
Overtime pay is terrible for the workers. In fact right now employers don't want people to work overtime even when they can (see example above except for the person didn't get tired and is still needed on the job.)
You will get clocked out when your shift is done, because he'd rather have someone else do that job without having to pay you extra money.
Sick days? Whatever, just replace sick workers. They're risking their jobs having the audacity to want a few days off to recover.
Terrible idea. Workers need training to be efficient.
Safety standards? Look I know the machine sometimes backfires and occasionally takes a thumb or two with it, but honestly it's all part of the risk. They'll get over it.
Some safety liabilities that get put on the employers by the government can be pretty stupid but in the end, it is in the employer's favor to maintain a safe environment for his workers, because once again having to hire new un-experienced employees will end up costing him more.
Please please please have a look at the numerous charts/graphs I posted probably more than once earlier in this thread. The wealth disparity in our nation is unforgivable. Our worker benefits pale in comparison to other civilized nations. And you seriously want to remove minimum wage laws all together? You seem to be advocating some crazy form of neo-feudalism.
I'm not advocating feudalism. The point is right now if your work isn't bringing in more than 8 dollars worth of profit an hour you won't get hired anyways, so if you're in a job chances are you are useful on your job and a pay-cut isn't as likely as you think it is, because you're pulling your weight.
a lot of minimum wage jobs are provided by small businesses... I like how you think that small business owners are some kind of sick freaks that are rolling in cash and are just licking their lips at the idea of cutting their workers' pay even more....
actually if you get rid of minimum wages a kid out of high school with like no skills instead of running up a huge debt going to college and coming out with a degree with which it's still incredibly hard to find a job nowadays can get a very low paying job doing something as simple as passing tools to a mechanic at a car service center, and learn actual valuable marketplace skills that are actually useful, and then he will be able to do a job that's actually worth a higher pay, and he will be able to get hired because he's not totally useless at stuff.
Frankly, you're wrong on many counts, and history has proven it multiple times.
As for what we could do to stop companies from outsourcing jobs, there are multiple things you could do. For one, you could give tax breaks to companies that hire U.S. employees and charge companies a tax for hiring non-Americans, We're basically the largest consumer market on the planet, companies aren't going to leave America because they don't get to hire overseas. *Bam* problem solved.
And no, eliminating minimum wages would be possibly the dumbest thing I've heard on the internet in a long time. Do you want to increase the wealth gap beyond the already ridiculous amount it is? I hear having 50% of the country controlling 2% of the wealth isn't good enough, we need to lower it by making the poor poorer! They don't deserve 2% anyway, they don't work hard and they don't deserve money.
WOW. That's exactly the point... we're the largest consuming market in the world... but no one wants to pay for people to produce here because it's too expensive because we consume so much... so we have the government constantly stimulate our spending with low interest rates, and stimuli, and this keeps devaluing our currency... Until people realize that all this shit that they send here... we will never be able to repay them for it with anything other than paper, because our own private sector isn't capable of competing anymore, so then they'll stop sending us stuff, and there will be absolutely NOTHING left in this country.
edit:
also, if companies are taxed heavily for hiring outside the US they'll move away and just export their stuff here...
You want to isolate ourselves from all the imports with high taxes? Well okay, all outside currencies will go up, as all of a sudden they'll have an abundance of stuff they're not selling to us, and we'll be stuck with the wreckage that is our post-stimulus economy. By the way all the bullshit service sector jobs that are only there to get the foreign products into american homes are also all gonna go poof. at least then it will be blindingly obvious that our economic fundamentals are shit, and we should have been promoting saving by the private sector to rebuild them in the future rather than trying to spend our way out of this situation.
You really know how to add to political and economic discourse.
Economics is not a perfect science, obviously, or there wouldn't be people still looking to discover new things. There are hard problems that existing models are unable to completely explain and the very nature of what is "obvious" or "rational" (rational expectations) in economics breaks down when different people have different internal models of the world.
The biggest problem with "people like you" is that just because someone says they "believe in keynes", you bucket it into the stupidest possible interpretation of Keynes possible. Many supply side economists think (from what I can gather) they Keynesians just want the government to spend infinite money to boost living standards for everyone (or something to that effect).... but Keynesians in America are still Capitalists (in the sense that anyone that doesn't want to abolish social security is a capitalist if they believe in all the other capitalist-type things), still believe that free markets are generally more efficient than the public sector, still believe that unsustainable deficits are bad and require a change in policy, etc, etc, etc
The way you argue economics/politics would be like a Keynesian saying that all supply side economists want 0 tax rates for everyone. Just a stupid exaggeration to try and make the other person look stupid without really coming to any real solution.
of course all supply side economists want 0 tax rates for everyone, but that's not possible. Neither is the spending of infinity money on consumption, but what it comes down to is that it's better to minimize the size of the government and therefore taxes and government spending.
obviously neither absolutes work, but working towards one leads to prosperity, and working towards the other doesn't.
That's not true either, China is deliberately following a policy of keeping their currency worthless compared to ours and lowering theirs in response to ours, because they don't want to consume. Even if ours dropped to the pits they'd still be exporting to us, because the last thing their leaders want right now is for their citizens to spend money on comforts. They're basically stocking up on as many investments and as much money as they can while increasing the size of their production until they eventually hit the maximum point, then they'll stabilize and start spending.
Exchange rates aren't actually that important generally speaking, until the difference becomes extraordinary.
and when they start spending then our money will be worthless in comparison and since all the producing jobs have moved overseas we will have nothing... result of? continuous spending, as opposed of saving to rebuild the economy.
EDIT:
to Whitewing:
The employees are massively over protected... you act like businesses can exist without workers. There's a reason why people aren't hiring, if it was profitable to hire they would... see the video I posted please.
If employees weren't over-protected, why wouldn't everyone hire a bunch of them and bully them around? It doesn't work like that. am I saying that employers should be able to bully their employees? no, but since there's unemployment so high it's obvious that they're protected so much that it's not worth hiring them anymore.
And you tax their imports too if they leave and just try to export here. It's a lose-lose for them, since there will be companies willing to fill in the gap if they just bail. People aren't hiring here in the U.S. not because it isn't profitable to do so, but because it isn't the MOST profitable thing they could do: they can hire elsewhere. Make it less profitable to hire elsewhere, and they'll hire here. Also, companies like a high unemployment rate, it makes the cost of unemployment extremely high and allows them to get away with terrorizing their employees and make unreasonable demands of them. High unemployment rates allow companies to bully them, it's the opposite of being protected.
Contracting the economy solves nothing. It doesn't fix the problem, it leaves millions of people screwed over and winds us up way behind where we should be. What we need to do is increase taxes on the extremely wealthy (yeah, $700 billion isn't nearly enough by itself, but it sure as hell is a great step in the right direction), make the right budget cuts to the right programs (primarily defense spending, but cut back on some of the entitlement programs too), stop the jobs from going overseas and promote hiring here, encourage consumption of products made in the U.S. over overseas products (if we have to, tariff imports more than we do), and keep people spending so we have a reason to keep producing and keep people employed.
And no, our currency won't be worthless, it'll increase in value once our economy starts growing again. It's a short run loss for a long run gain, wheras what you are suggesting is a short run gain for a long run loss.
all the jobs that spending protects are the jobs of people selling foreign products... I've said this 5 billion times.
You wonna kick out the imports? ok, well then all the people with the service sector jobs selling chinese stuff here will lose their jobs, If you give people more money to spend via debasing our currency.... Well then they'll still buy Chinese goods, the moment that our goods become cheaper than chinese goods all the people selling will lose jobs because we're no longer capable to produce as much as we want to consume.
The contraction is inevitable in your scenario as well, except that in my scenario we can start to curb the inflation, while in yours it's running wild.
I didn't say kick out the imports: I said tax them. Yes, it will mean people who have a job only selling chinese goods will lose them, but the gain in american manufacturing jobs will be about equal, and be of more long term benefit to us.
BTW, I don't know how many times I have to say this: stop bringing up inflation. It's lower now than we want it to be, and it won't be a serious issue. We actually want higher inflation, only we can't get it because we're in a liquidity trap right now.
And no, contraction isn't inevitable in the way you are referring to it. Yes, government spending has to decrease in the long run, but that's not the same thing as an economic contraction, which is what you are suggesting.
On September 14 2011 06:55 Kiarip wrote: Where does the government get this money? They're already in huge deficit. They either print the money in which case there's inflation, or they go further into debt which also weakens the dollar.
Inflation is bad, but a lot of people forget that deflation is worse... that is until you have hyperinflation, then you're totally fucked. Although peoples' idea of how close the US is to hyperinflation is, well, drastically inflated.
On September 14 2011 06:55 Kiarip wrote: The weakened dollar loses people their purchasing power, so of course people spend less. Especially since they're already in debt.
The average household is in debt though, you could argue that inflation effectively lowers the dollar-adjusted burden of that debt because that debt is denominated in dollars, and lowers the purchasing power of people that are not in debt. There ARE benefits to inflation, there ARE benefits to long term low inflation, and there ARE consequences for deflation (which no one seems to mention). I'm NOT saying slay the rich people and take their money, i'm NOT saying this is any kind of long term solution.
Low rates are not necessarily bad (especially if it doesn't actually cause inflation) and high rates are not necessarily good. Low rates incentivizes people/businesses with money to not put their money in treasuries and instead look for other places to find returns like investing in businesses, infrastructure, etc. It DOES hurt financial institutions that make money off the difference between the interest they give you and the interest that get from the government.
On September 14 2011 06:55 Kiarip wrote: By giving people money to spend we're not improving our economic fundamentals, our production or industry, and the artificially low interest rates aren't helping. There's an obvious arbitrage going on with the US dollar which makes it foolish to save currency (which is why commodities and precious metals have kept going up in price as they're a way to hedge inflation.)
I'm an arbitrageur by profession and I am interested in what you believe this "obvious arbitrage" is. Actually, I'm not, its just clear you don't know the definition of arbitrage (risk free profit), or you do and you don't understand the definition of risk.
Your saying that commodities and previous metals are going up because of "obvious arbitrage" is false and is similar to someone else saying that we should buy Apple stock because of "obviously outcompeting". There is no guaranteed risk free profit here, but if you still believe so, I suggest you register on a commodities exchange such that we can trade in size with each other :p
On September 14 2011 06:55 Kiarip wrote: How can money be so cheap (low rates) when everyone is in debt, it doesn't make sense.
The "how" is via low interest rates set by the fed. But you knew that. The "Why" is to try and kickstart spending(demand) so that the economic potential goes to shit (via laborers not getting new skills, businesses not investing in new infrastructure [and this is because they won't invest if no one is buying product anyway]). Is this the right solution to our current problems? I'm not sure. Probably not cheap money by itself. But even despite that I'm smart enough to know that NO ONE on either side actually has a fucking clue what is going to happen, and anyone that says that they know something will work for sure is full of shit.
Where does the government get money? The problem with government is that when it contracts stuff it doesn't need to worry about minimizing the cost. When a business does it instead it does minimize the cost so it's more efficient. I'll give you the roads thing, because this is no time for a dramatic reform of roads being funded privately, and maybe it will never be the time for that, but what about the stimulus itself? Yeah... that's clearly wrong.
The government does pretty much everything through private contractors. It's literally paying private companies to do stuff.
Yeah... and a large reason why women don't get other jobs is the mandatory provided maternal leave, and other labor laws encouraging racism.
Sorry but this made me lol out of confusion. Maternal leave is so racist!
Where does the government get this money? They're already in huge deficit. They either print the money in which case there's inflation, or they go further into debt which also weakens the dollar.
The weakened dollar loses people their purchasing power, so of course people spend less. Especially since they're already in debt.
The solution isn't to spend it's to save... the principle of global economics dictates that if you're consuming more than you're producing you're going to be falling into debt. Either literal debt, or it loses purchasing power of the currency with respect to other currencies. In the end you can't make something out of nothing, and the efficiency of this obviously sucks because whenever money goes through the government tons of it gets stuck.
By giving people money to spend we're not improving our economic fundamentals, our production or industry, and the artificially low interest rates aren't helping. There's an obvious arbitrage going on with the US dollar which makes it foolish to save currency (which is why commodities and precious metals have kept going up in price as they're a way to hedge inflation.) How can money be so cheap (low rates) when everyone is in debt, it doesn't make sense.
The spending doesn't create any more products or wealth it simply allows some people to keep jobs that provide americans with goods and services that the americans shouldn't be able to afford in the middle of a recession. The market needs to go through a contraction to pay off its debt, and the more we keep spending the harder the contraction will be to deal with when it comes.
Short term debt is unimportant, long term debt is. Think about the long run, not the short run. Yes, deficit spending while in debt increases your debt in the short run, but if it increases employment, it leads to a long term recovery. Unfortunately, it won't do that now, because all the jobs that get created still are going overseas, and nobody fucking wants to do anything about it. Nothing pisses me off more than watching big companies get tax breaks to create new jobs and then hire people outside the country because it's cheaper. Hilariously, if this were fixed, it'd be the biggest factor in helping the economy, but not a single candidate has it on their agenda at all. Go fucking figure. (Yes, I'm legitimately angry about this, and it's almost the only thing that has me actually pissed off rather than irritated).
You need real savings to create jobs. While interest rates are kept low savings will be minimum. all the money that gets saved will only be used to pay the interest on the current debt, which is basically just another form of spending. But if the government stops controlling the interest rates like they should, then all of a sudden this short term debt that you say is unimportant will become incredibly important.
and it doesn't lead to long term economy growth, because the money is still originally coming out of the private sector or out of the printing press. The government doesn't create any products (well technically it does like roads and some infrastructure, but it's not that significant on this scale.)
Money is meant to represent wealth which is the ownership of actual stuff. Whenever money is in the hands of the government it's already money that the government forced from the people/businesses, because it's the people that create the products. They are redistributing money amongst those that are most likely to spend it because yes it keeps more people in their jobs, but it also sends a false signal to the businesses. Businesses that are creating services that the american people shouldn't be able to afford SHOULD be contracting. That's why it's called a recession. The more stimulus there is the more people will be able to get the wrong type of jobs, so in the end when the government decides to stop borrowing money and debasing our currency, almost everyone will be in a non-essential job, and they will have to lose their jobs, and then even more people would suffer than if the recession would have been allowed to occur sooner. It's the standard boom and bust cycle.
What are you suggesting they do about companies hiring overseas? You can't stop the companies from hiring where they want to hire. If the american employee has lost his competitive advantage perhaps he's demanding too much of a compensation? minimum wage laws need to be abolished.
Also, right now, inflation isn't a bad thing at all, we're below our target inflation number. I'm not sure why people keep bringing this up as a negative. Also, a lot of people can't afford to wait during a contraction period for the economy to recover: people are losing their homes because they can't find a job due to high unemployment.
It IS a negative, the longer it continues the worse things are gonna get if recession is allowed to hit fully, and if it's not then we'll eventually hit hyper-inflation.
What do you think is gonna happen if China stops inflating their currency along with ours? all of a sudden all the cheap chinese shit we buy will be completely unaffordable because they have so much more exports to us than we have exports to them, that their currency should actually be worth way more than ours, sure they'll lose us as customers, but their quality of living would jump the hell up if they stopped buying our treasury, because their purchasing power would considerably.
Disband minimum wage laws? Are you serious? Do you know how low minimum wage already is in this country? Do you realize how poor the poor actually are? It's not like they can take another salary hit.
Why don't we abolish other so called entitlements then? How about repealing the Fair Labor Standards Act? I mean, kids need to work too, right? And we shouldn't have regulations about what we're allowed to pay them, cause that'd be socialism.
Minimum wage law destroys jobs. Let's be serious now. Businesses need to make a profit. They aren't gonna hire someone for 8 dollars an hour if that person isn't able to produce more than 8 dollars an hour worth of profit to the business... Its not like employers maliciously hate giving people jobs, no... they just don't want to lose money and go out of business.
8 hour work days? Pshhhh, profits will be higher if we make them work 10 or 12 hours a day.
No they won't be. people will get tired and make mistakes.
Time and a half for working overtime? Wow, did Marx himself come up with that one? We can surely do without that.
The weekend? If they want a job they can learn to come in on Saturday and Sunday too.
Overtime pay is terrible for the workers. In fact right now employers don't want people to work overtime even when they can (see example above except for the person didn't get tired and is still needed on the job.)
You will get clocked out when your shift is done, because he'd rather have someone else do that job without having to pay you extra money.
Sick days? Whatever, just replace sick workers. They're risking their jobs having the audacity to want a few days off to recover.
Terrible idea. Workers need training to be efficient.
Safety standards? Look I know the machine sometimes backfires and occasionally takes a thumb or two with it, but honestly it's all part of the risk. They'll get over it.
Some safety liabilities that get put on the employers by the government can be pretty stupid but in the end, it is in the employer's favor to maintain a safe environment for his workers, because once again having to hire new un-experienced employees will end up costing him more.
Please please please have a look at the numerous charts/graphs I posted probably more than once earlier in this thread. The wealth disparity in our nation is unforgivable. Our worker benefits pale in comparison to other civilized nations. And you seriously want to remove minimum wage laws all together? You seem to be advocating some crazy form of neo-feudalism.
I'm not advocating feudalism. The point is right now if your work isn't bringing in more than 8 dollars worth of profit an hour you won't get hired anyways, so if you're in a job chances are you are useful on your job and a pay-cut isn't as likely as you think it is, because you're pulling your weight.
a lot of minimum wage jobs are provided by small businesses... I like how you think that small business owners are some kind of sick freaks that are rolling in cash and are just licking their lips at the idea of cutting their workers' pay even more....
actually if you get rid of minimum wages a kid out of high school with like no skills instead of running up a huge debt going to college and coming out with a degree with which it's still incredibly hard to find a job nowadays can get a very low paying job doing something as simple as passing tools to a mechanic at a car service center, and learn actual valuable marketplace skills that are actually useful, and then he will be able to do a job that's actually worth a higher pay, and he will be able to get hired because he's not totally useless at stuff.
Frankly, you're wrong on many counts, and history has proven it multiple times.
As for what we could do to stop companies from outsourcing jobs, there are multiple things you could do. For one, you could give tax breaks to companies that hire U.S. employees and charge companies a tax for hiring non-Americans, We're basically the largest consumer market on the planet, companies aren't going to leave America because they don't get to hire overseas. *Bam* problem solved.
And no, eliminating minimum wages would be possibly the dumbest thing I've heard on the internet in a long time. Do you want to increase the wealth gap beyond the already ridiculous amount it is? I hear having 50% of the country controlling 2% of the wealth isn't good enough, we need to lower it by making the poor poorer! They don't deserve 2% anyway, they don't work hard and they don't deserve money.
WOW. That's exactly the point... we're the largest consuming market in the world... but no one wants to pay for people to produce here because it's too expensive because we consume so much... so we have the government constantly stimulate our spending with low interest rates, and stimuli, and this keeps devaluing our currency... Until people realize that all this shit that they send here... we will never be able to repay them for it with anything other than paper, because our own private sector isn't capable of competing anymore, so then they'll stop sending us stuff, and there will be absolutely NOTHING left in this country.
edit:
also, if companies are taxed heavily for hiring outside the US they'll move away and just export their stuff here...
You want to isolate ourselves from all the imports with high taxes? Well okay, all outside currencies will go up, as all of a sudden they'll have an abundance of stuff they're not selling to us, and we'll be stuck with the wreckage that is our post-stimulus economy. By the way all the bullshit service sector jobs that are only there to get the foreign products into american homes are also all gonna go poof. at least then it will be blindingly obvious that our economic fundamentals are shit, and we should have been promoting saving by the private sector to rebuild them in the future rather than trying to spend our way out of this situation.
You really know how to add to political and economic discourse.
Economics is not a perfect science, obviously, or there wouldn't be people still looking to discover new things. There are hard problems that existing models are unable to completely explain and the very nature of what is "obvious" or "rational" (rational expectations) in economics breaks down when different people have different internal models of the world.
The biggest problem with "people like you" is that just because someone says they "believe in keynes", you bucket it into the stupidest possible interpretation of Keynes possible. Many supply side economists think (from what I can gather) they Keynesians just want the government to spend infinite money to boost living standards for everyone (or something to that effect).... but Keynesians in America are still Capitalists (in the sense that anyone that doesn't want to abolish social security is a capitalist if they believe in all the other capitalist-type things), still believe that free markets are generally more efficient than the public sector, still believe that unsustainable deficits are bad and require a change in policy, etc, etc, etc
The way you argue economics/politics would be like a Keynesian saying that all supply side economists want 0 tax rates for everyone. Just a stupid exaggeration to try and make the other person look stupid without really coming to any real solution.
of course all supply side economists want 0 tax rates for everyone, but that's not possible. Neither is the spending of infinity money on consumption, but what it comes down to is that it's better to minimize the size of the government and therefore taxes and government spending.
obviously neither absolutes work, but working towards one leads to prosperity, and working towards the other doesn't.
That's not true either, China is deliberately following a policy of keeping their currency worthless compared to ours and lowering theirs in response to ours, because they don't want to consume. Even if ours dropped to the pits they'd still be exporting to us, because the last thing their leaders want right now is for their citizens to spend money on comforts. They're basically stocking up on as many investments and as much money as they can while increasing the size of their production until they eventually hit the maximum point, then they'll stabilize and start spending.
Exchange rates aren't actually that important generally speaking, until the difference becomes extraordinary.
and when they start spending then our money will be worthless in comparison and since all the producing jobs have moved overseas we will have nothing... result of? continuous spending, as opposed of saving to rebuild the economy.
EDIT:
to Whitewing:
The employees are massively over protected... you act like businesses can exist without workers. There's a reason why people aren't hiring, if it was profitable to hire they would... see the video I posted please.
If employees weren't over-protected, why wouldn't everyone hire a bunch of them and bully them around? It doesn't work like that. am I saying that employers should be able to bully their employees? no, but since there's unemployment so high it's obvious that they're protected so much that it's not worth hiring them anymore.
And you tax their imports too if they leave and just try to export here. It's a lose-lose for them, since there will be companies willing to fill in the gap if they just bail. People aren't hiring here in the U.S. not because it isn't profitable to do so, but because it isn't the MOST profitable thing they could do: they can hire elsewhere. Make it less profitable to hire elsewhere, and they'll hire here. Also, companies like a high unemployment rate, it makes the cost of unemployment extremely high and allows them to get away with terrorizing their employees and make unreasonable demands of them. High unemployment rates allow companies to bully them, it's the opposite of being protected.
Contracting the economy solves nothing. It doesn't fix the problem, it leaves millions of people screwed over and winds us up way behind where we should be. What we need to do is increase taxes on the extremely wealthy (yeah, $700 billion isn't nearly enough by itself, but it sure as hell is a great step in the right direction), make the right budget cuts to the right programs (primarily defense spending, but cut back on some of the entitlement programs too), stop the jobs from going overseas and promote hiring here, encourage consumption of products made in the U.S. over overseas products (if we have to, tariff imports more than we do), and keep people spending so we have a reason to keep producing and keep people employed.
And no, our currency won't be worthless, it'll increase in value once our economy starts growing again. It's a short run loss for a long run gain, wheras what you are suggesting is a short run gain for a long run loss.
all the jobs that spending protects are the jobs of people selling foreign products... I've said this 5 billion times.
You wonna kick out the imports? ok, well then all the people with the service sector jobs selling chinese stuff here will lose their jobs, If you give people more money to spend via debasing our currency.... Well then they'll still buy Chinese goods, the moment that our goods become cheaper than chinese goods all the people selling will lose jobs because we're no longer capable to produce as much as we want to consume.
The contraction is inevitable in your scenario as well, except that in my scenario we can start to curb the inflation, while in yours it's running wild.
I didn't say kick out the imports: I said tax them. Yes, it will mean people who have a job only selling chinese goods will lose them, but the gain in american manufacturing jobs will be about equal, and be of more long term benefit to us.
...
If you tax them to the point that their goods become more expensive than ours it's almost synonymous with kicking them out.
How are you going to get a gain in the american manufactoring jobs? you need people with money to invest in building and supporting factories, your spending will make it hard for our businesses to even keep up with the ever rising costs of raw materials (one of the reasons inflation is terrible) and your suggested policies punish saving... who is gonna have the money to invest in factories here?...
It's gonna be the same thing... if you think the competition for jobs is high now (15% true unemployment,) think about how high it will be when walmart is gonna start shutting down their stores because 80% of their stuff is imports from china...
There will be huge unemployment, competition for jobs will be even higher, and your spending policies will prevent people from accumulating capital to invest in manufactoring infrastructure.
You have it half way right, but you are still ignoring the fact that hyper inflation is a giant threat, especially when you combine taxing imports with stimulus spending.
BTW, I don't know how many times I have to say this: stop bringing up inflation. It's lower now than we want it to be, and it won't be a serious issue. We actually want higher inflation, only we can't get it because we're in a liquidity trap right now.
are you serious? inflation is a huge issue, we don't want inflation, because inflation makes it hard for us to buy stuff...
On September 14 2011 07:02 Whitewing wrote: [quote]
Short term debt is unimportant, long term debt is. Think about the long run, not the short run. Yes, deficit spending while in debt increases your debt in the short run, but if it increases employment, it leads to a long term recovery. Unfortunately, it won't do that now, because all the jobs that get created still are going overseas, and nobody fucking wants to do anything about it. Nothing pisses me off more than watching big companies get tax breaks to create new jobs and then hire people outside the country because it's cheaper. Hilariously, if this were fixed, it'd be the biggest factor in helping the economy, but not a single candidate has it on their agenda at all. Go fucking figure. (Yes, I'm legitimately angry about this, and it's almost the only thing that has me actually pissed off rather than irritated).
You need real savings to create jobs. While interest rates are kept low savings will be minimum. all the money that gets saved will only be used to pay the interest on the current debt, which is basically just another form of spending. But if the government stops controlling the interest rates like they should, then all of a sudden this short term debt that you say is unimportant will become incredibly important.
and it doesn't lead to long term economy growth, because the money is still originally coming out of the private sector or out of the printing press. The government doesn't create any products (well technically it does like roads and some infrastructure, but it's not that significant on this scale.)
Money is meant to represent wealth which is the ownership of actual stuff. Whenever money is in the hands of the government it's already money that the government forced from the people/businesses, because it's the people that create the products. They are redistributing money amongst those that are most likely to spend it because yes it keeps more people in their jobs, but it also sends a false signal to the businesses. Businesses that are creating services that the american people shouldn't be able to afford SHOULD be contracting. That's why it's called a recession. The more stimulus there is the more people will be able to get the wrong type of jobs, so in the end when the government decides to stop borrowing money and debasing our currency, almost everyone will be in a non-essential job, and they will have to lose their jobs, and then even more people would suffer than if the recession would have been allowed to occur sooner. It's the standard boom and bust cycle.
What are you suggesting they do about companies hiring overseas? You can't stop the companies from hiring where they want to hire. If the american employee has lost his competitive advantage perhaps he's demanding too much of a compensation? minimum wage laws need to be abolished.
Also, right now, inflation isn't a bad thing at all, we're below our target inflation number. I'm not sure why people keep bringing this up as a negative. Also, a lot of people can't afford to wait during a contraction period for the economy to recover: people are losing their homes because they can't find a job due to high unemployment.
It IS a negative, the longer it continues the worse things are gonna get if recession is allowed to hit fully, and if it's not then we'll eventually hit hyper-inflation.
What do you think is gonna happen if China stops inflating their currency along with ours? all of a sudden all the cheap chinese shit we buy will be completely unaffordable because they have so much more exports to us than we have exports to them, that their currency should actually be worth way more than ours, sure they'll lose us as customers, but their quality of living would jump the hell up if they stopped buying our treasury, because their purchasing power would considerably.
Disband minimum wage laws? Are you serious? Do you know how low minimum wage already is in this country? Do you realize how poor the poor actually are? It's not like they can take another salary hit.
Why don't we abolish other so called entitlements then? How about repealing the Fair Labor Standards Act? I mean, kids need to work too, right? And we shouldn't have regulations about what we're allowed to pay them, cause that'd be socialism.
Minimum wage law destroys jobs. Let's be serious now. Businesses need to make a profit. They aren't gonna hire someone for 8 dollars an hour if that person isn't able to produce more than 8 dollars an hour worth of profit to the business... Its not like employers maliciously hate giving people jobs, no... they just don't want to lose money and go out of business.
8 hour work days? Pshhhh, profits will be higher if we make them work 10 or 12 hours a day.
No they won't be. people will get tired and make mistakes.
Time and a half for working overtime? Wow, did Marx himself come up with that one? We can surely do without that.
The weekend? If they want a job they can learn to come in on Saturday and Sunday too.
Overtime pay is terrible for the workers. In fact right now employers don't want people to work overtime even when they can (see example above except for the person didn't get tired and is still needed on the job.)
You will get clocked out when your shift is done, because he'd rather have someone else do that job without having to pay you extra money.
Sick days? Whatever, just replace sick workers. They're risking their jobs having the audacity to want a few days off to recover.
Terrible idea. Workers need training to be efficient.
Safety standards? Look I know the machine sometimes backfires and occasionally takes a thumb or two with it, but honestly it's all part of the risk. They'll get over it.
Some safety liabilities that get put on the employers by the government can be pretty stupid but in the end, it is in the employer's favor to maintain a safe environment for his workers, because once again having to hire new un-experienced employees will end up costing him more.
Please please please have a look at the numerous charts/graphs I posted probably more than once earlier in this thread. The wealth disparity in our nation is unforgivable. Our worker benefits pale in comparison to other civilized nations. And you seriously want to remove minimum wage laws all together? You seem to be advocating some crazy form of neo-feudalism.
I'm not advocating feudalism. The point is right now if your work isn't bringing in more than 8 dollars worth of profit an hour you won't get hired anyways, so if you're in a job chances are you are useful on your job and a pay-cut isn't as likely as you think it is, because you're pulling your weight.
a lot of minimum wage jobs are provided by small businesses... I like how you think that small business owners are some kind of sick freaks that are rolling in cash and are just licking their lips at the idea of cutting their workers' pay even more....
actually if you get rid of minimum wages a kid out of high school with like no skills instead of running up a huge debt going to college and coming out with a degree with which it's still incredibly hard to find a job nowadays can get a very low paying job doing something as simple as passing tools to a mechanic at a car service center, and learn actual valuable marketplace skills that are actually useful, and then he will be able to do a job that's actually worth a higher pay, and he will be able to get hired because he's not totally useless at stuff.
Frankly, you're wrong on many counts, and history has proven it multiple times.
As for what we could do to stop companies from outsourcing jobs, there are multiple things you could do. For one, you could give tax breaks to companies that hire U.S. employees and charge companies a tax for hiring non-Americans, We're basically the largest consumer market on the planet, companies aren't going to leave America because they don't get to hire overseas. *Bam* problem solved.
And no, eliminating minimum wages would be possibly the dumbest thing I've heard on the internet in a long time. Do you want to increase the wealth gap beyond the already ridiculous amount it is? I hear having 50% of the country controlling 2% of the wealth isn't good enough, we need to lower it by making the poor poorer! They don't deserve 2% anyway, they don't work hard and they don't deserve money.
WOW. That's exactly the point... we're the largest consuming market in the world... but no one wants to pay for people to produce here because it's too expensive because we consume so much... so we have the government constantly stimulate our spending with low interest rates, and stimuli, and this keeps devaluing our currency... Until people realize that all this shit that they send here... we will never be able to repay them for it with anything other than paper, because our own private sector isn't capable of competing anymore, so then they'll stop sending us stuff, and there will be absolutely NOTHING left in this country.
edit:
also, if companies are taxed heavily for hiring outside the US they'll move away and just export their stuff here...
You want to isolate ourselves from all the imports with high taxes? Well okay, all outside currencies will go up, as all of a sudden they'll have an abundance of stuff they're not selling to us, and we'll be stuck with the wreckage that is our post-stimulus economy. By the way all the bullshit service sector jobs that are only there to get the foreign products into american homes are also all gonna go poof. at least then it will be blindingly obvious that our economic fundamentals are shit, and we should have been promoting saving by the private sector to rebuild them in the future rather than trying to spend our way out of this situation.
You really know how to add to political and economic discourse.
Economics is not a perfect science, obviously, or there wouldn't be people still looking to discover new things. There are hard problems that existing models are unable to completely explain and the very nature of what is "obvious" or "rational" (rational expectations) in economics breaks down when different people have different internal models of the world.
The biggest problem with "people like you" is that just because someone says they "believe in keynes", you bucket it into the stupidest possible interpretation of Keynes possible. Many supply side economists think (from what I can gather) they Keynesians just want the government to spend infinite money to boost living standards for everyone (or something to that effect).... but Keynesians in America are still Capitalists (in the sense that anyone that doesn't want to abolish social security is a capitalist if they believe in all the other capitalist-type things), still believe that free markets are generally more efficient than the public sector, still believe that unsustainable deficits are bad and require a change in policy, etc, etc, etc
The way you argue economics/politics would be like a Keynesian saying that all supply side economists want 0 tax rates for everyone. Just a stupid exaggeration to try and make the other person look stupid without really coming to any real solution.
of course all supply side economists want 0 tax rates for everyone, but that's not possible. Neither is the spending of infinity money on consumption, but what it comes down to is that it's better to minimize the size of the government and therefore taxes and government spending.
obviously neither absolutes work, but working towards one leads to prosperity, and working towards the other doesn't.
That's not true either, China is deliberately following a policy of keeping their currency worthless compared to ours and lowering theirs in response to ours, because they don't want to consume. Even if ours dropped to the pits they'd still be exporting to us, because the last thing their leaders want right now is for their citizens to spend money on comforts. They're basically stocking up on as many investments and as much money as they can while increasing the size of their production until they eventually hit the maximum point, then they'll stabilize and start spending.
Exchange rates aren't actually that important generally speaking, until the difference becomes extraordinary.
and when they start spending then our money will be worthless in comparison and since all the producing jobs have moved overseas we will have nothing... result of? continuous spending, as opposed of saving to rebuild the economy.
EDIT:
to Whitewing:
The employees are massively over protected... you act like businesses can exist without workers. There's a reason why people aren't hiring, if it was profitable to hire they would... see the video I posted please.
If employees weren't over-protected, why wouldn't everyone hire a bunch of them and bully them around? It doesn't work like that. am I saying that employers should be able to bully their employees? no, but since there's unemployment so high it's obvious that they're protected so much that it's not worth hiring them anymore.
And you tax their imports too if they leave and just try to export here. It's a lose-lose for them, since there will be companies willing to fill in the gap if they just bail. People aren't hiring here in the U.S. not because it isn't profitable to do so, but because it isn't the MOST profitable thing they could do: they can hire elsewhere. Make it less profitable to hire elsewhere, and they'll hire here. Also, companies like a high unemployment rate, it makes the cost of unemployment extremely high and allows them to get away with terrorizing their employees and make unreasonable demands of them. High unemployment rates allow companies to bully them, it's the opposite of being protected.
Contracting the economy solves nothing. It doesn't fix the problem, it leaves millions of people screwed over and winds us up way behind where we should be. What we need to do is increase taxes on the extremely wealthy (yeah, $700 billion isn't nearly enough by itself, but it sure as hell is a great step in the right direction), make the right budget cuts to the right programs (primarily defense spending, but cut back on some of the entitlement programs too), stop the jobs from going overseas and promote hiring here, encourage consumption of products made in the U.S. over overseas products (if we have to, tariff imports more than we do), and keep people spending so we have a reason to keep producing and keep people employed.
And no, our currency won't be worthless, it'll increase in value once our economy starts growing again. It's a short run loss for a long run gain, wheras what you are suggesting is a short run gain for a long run loss.
all the jobs that spending protects are the jobs of people selling foreign products... I've said this 5 billion times.
You wonna kick out the imports? ok, well then all the people with the service sector jobs selling chinese stuff here will lose their jobs, If you give people more money to spend via debasing our currency.... Well then they'll still buy Chinese goods, the moment that our goods become cheaper than chinese goods all the people selling will lose jobs because we're no longer capable to produce as much as we want to consume.
The contraction is inevitable in your scenario as well, except that in my scenario we can start to curb the inflation, while in yours it's running wild.
I didn't say kick out the imports: I said tax them. Yes, it will mean people who have a job only selling chinese goods will lose them, but the gain in american manufacturing jobs will be about equal, and be of more long term benefit to us.
...
If you tax them to the point that their goods become more expensive than ours it's almost synonymous with kicking them out.
How are you going to get a gain in the american manufactoring jobs? you need people with money to invest in building and supporting factories, your spending will make it hard for our businesses to even keep up with the ever rising costs of raw materials (one of the reasons inflation is terrible) and your suggested policies punish saving... who is gonna have the money to invest in factories here?...
It's gonna be the same thing... if you think the competition for jobs is high now (15% true unemployment,) think about how high it will be when walmart is gonna start shutting down their stores because 80% of their stuff is imports from china...
There will be huge unemployment, competition for jobs will be even higher, and your spending policies will prevent people from accumulating capital to invest in manufactoring infrastructure.
You have it half way right, but you are still ignoring the fact that hyper inflation is a giant threat, especially when you combine taxing imports with stimulus spending.
BTW, I don't know how many times I have to say this: stop bringing up inflation. It's lower now than we want it to be, and it won't be a serious issue. We actually want higher inflation, only we can't get it because we're in a liquidity trap right now.
are you serious? inflation is a huge issue, we don't want inflation, because inflation makes it hard for us to buy stuff...
On September 14 2011 06:55 Kiarip wrote: Where does the government get this money? They're already in huge deficit. They either print the money in which case there's inflation, or they go further into debt which also weakens the dollar.
Inflation is bad, but a lot of people forget that deflation is worse... that is until you have hyperinflation, then you're totally fucked. Although peoples' idea of how close the US is to hyperinflation is, well, drastically inflated.
How do you figure? China is artificially inflating their currency. If they stop we get massive inflation, but their "deflation" doesn't hurt them, because they have all the goods necessary to spend money on, and tons of people to consume them. Deflation is only bad when it destroys jobs, but it won't necessarily destroy jobs in China, because their own goods can substantially raise their standard of living.
On September 14 2011 06:55 Kiarip wrote: The weakened dollar loses people their purchasing power, so of course people spend less. Especially since they're already in debt.
The average household is in debt though, you could argue that inflation effectively lowers the dollar-adjusted burden of that debt because that debt is denominated in dollars, and lowers the purchasing power of people that are not in debt. There ARE benefits to inflation, there ARE benefits to long term low inflation, and there ARE consequences for deflation (which no one seems to mention). I'm NOT saying slay the rich people and take their money, i'm NOT saying this is any kind of long term solution.
Low rates are not necessarily bad (especially if it doesn't actually cause inflation) and high rates are not necessarily good. Low rates incentivizes people/businesses with money to not put their money in treasuries and instead look for other places to find returns like investing in businesses, infrastructure, etc. It DOES hurt financial institutions that make money off the difference between the interest they give you and the interest that get from the government.
The problem is that when people are already in debt you want them to save money and repay their debts and not spend more. Let's not pretend that the stimulus causes any real investing, it simply increases consumption, which let's people selling stuff that's produced outside the US keep their jobs.
On September 14 2011 06:55 Kiarip wrote: By giving people money to spend we're not improving our economic fundamentals, our production or industry, and the artificially low interest rates aren't helping. There's an obvious arbitrage going on with the US dollar which makes it foolish to save currency (which is why commodities and precious metals have kept going up in price as they're a way to hedge inflation.)
I'm an arbitrageur by profession and I am interested in what you believe this "obvious arbitrage" is. Actually, I'm not, its just clear you don't know the definition of arbitrage (risk free profit), or you do and you don't understand the definition of risk.
Your saying that commodities and previous metals are going up because of "obvious arbitrage" is false and is similar to someone else saying that we should buy Apple stock because of "obviously outcompeting". There is no guaranteed risk free profit here, but if you still believe so, I suggest you register on a commodities exchange such that we can trade in size with each other :p
Well the arbitrage is obviously speculating in commodities and precious, and non-precious metals, all the things that retain their value, because the inflation is absolutely 100% predictable with the government policy that forces interest rates low even when the country is in debt, and money by all sound economic reasoning should be hard to come by.
On September 14 2011 06:55 Kiarip wrote: How can money be so cheap (low rates) when everyone is in debt, it doesn't make sense.
The "how" is via low interest rates set by the fed. But you knew that. The "Why" is to try and kickstart spending(demand) so that the economic potential goes to shit (via laborers not getting new skills, businesses not investing in new infrastructure [and this is because they won't invest if no one is buying product anyway]). Is this the right solution to our current problems? I'm not sure. Probably not cheap money by itself. But even despite that I'm smart enough to know that NO ONE on either side actually has a fucking clue what is going to happen, and anyone that says that they know something will work for sure is full of shit.
[/quote]
Yeah.. there's no short term solution at all, but the long term solution is that you need to cut the inflation and go through a recession, once individuals can once again build up capital they will be able to invest in industry.
Yes, recession sounds scary at this point in time, but I think it's obvious that the longer the stimulus goes on the scarier the recession will be, and since the stimulus itself isn't actually improving the economy, but simply avoiding the recession through decrease of the average person's purchasing power, we're probably heading in the wrong direction.
You need real savings to create jobs. While interest rates are kept low savings will be minimum. all the money that gets saved will only be used to pay the interest on the current debt, which is basically just another form of spending. But if the government stops controlling the interest rates like they should, then all of a sudden this short term debt that you say is unimportant will become incredibly important.
and it doesn't lead to long term economy growth, because the money is still originally coming out of the private sector or out of the printing press. The government doesn't create any products (well technically it does like roads and some infrastructure, but it's not that significant on this scale.)
Money is meant to represent wealth which is the ownership of actual stuff. Whenever money is in the hands of the government it's already money that the government forced from the people/businesses, because it's the people that create the products. They are redistributing money amongst those that are most likely to spend it because yes it keeps more people in their jobs, but it also sends a false signal to the businesses. Businesses that are creating services that the american people shouldn't be able to afford SHOULD be contracting. That's why it's called a recession. The more stimulus there is the more people will be able to get the wrong type of jobs, so in the end when the government decides to stop borrowing money and debasing our currency, almost everyone will be in a non-essential job, and they will have to lose their jobs, and then even more people would suffer than if the recession would have been allowed to occur sooner. It's the standard boom and bust cycle.
What are you suggesting they do about companies hiring overseas? You can't stop the companies from hiring where they want to hire. If the american employee has lost his competitive advantage perhaps he's demanding too much of a compensation? minimum wage laws need to be abolished.
[quote]
It IS a negative, the longer it continues the worse things are gonna get if recession is allowed to hit fully, and if it's not then we'll eventually hit hyper-inflation.
What do you think is gonna happen if China stops inflating their currency along with ours? all of a sudden all the cheap chinese shit we buy will be completely unaffordable because they have so much more exports to us than we have exports to them, that their currency should actually be worth way more than ours, sure they'll lose us as customers, but their quality of living would jump the hell up if they stopped buying our treasury, because their purchasing power would considerably.
Disband minimum wage laws? Are you serious? Do you know how low minimum wage already is in this country? Do you realize how poor the poor actually are? It's not like they can take another salary hit.
Why don't we abolish other so called entitlements then? How about repealing the Fair Labor Standards Act? I mean, kids need to work too, right? And we shouldn't have regulations about what we're allowed to pay them, cause that'd be socialism.
Minimum wage law destroys jobs. Let's be serious now. Businesses need to make a profit. They aren't gonna hire someone for 8 dollars an hour if that person isn't able to produce more than 8 dollars an hour worth of profit to the business... Its not like employers maliciously hate giving people jobs, no... they just don't want to lose money and go out of business.
8 hour work days? Pshhhh, profits will be higher if we make them work 10 or 12 hours a day.
No they won't be. people will get tired and make mistakes.
Time and a half for working overtime? Wow, did Marx himself come up with that one? We can surely do without that.
The weekend? If they want a job they can learn to come in on Saturday and Sunday too.
Overtime pay is terrible for the workers. In fact right now employers don't want people to work overtime even when they can (see example above except for the person didn't get tired and is still needed on the job.)
You will get clocked out when your shift is done, because he'd rather have someone else do that job without having to pay you extra money.
Sick days? Whatever, just replace sick workers. They're risking their jobs having the audacity to want a few days off to recover.
Terrible idea. Workers need training to be efficient.
Safety standards? Look I know the machine sometimes backfires and occasionally takes a thumb or two with it, but honestly it's all part of the risk. They'll get over it.
Some safety liabilities that get put on the employers by the government can be pretty stupid but in the end, it is in the employer's favor to maintain a safe environment for his workers, because once again having to hire new un-experienced employees will end up costing him more.
Please please please have a look at the numerous charts/graphs I posted probably more than once earlier in this thread. The wealth disparity in our nation is unforgivable. Our worker benefits pale in comparison to other civilized nations. And you seriously want to remove minimum wage laws all together? You seem to be advocating some crazy form of neo-feudalism.
I'm not advocating feudalism. The point is right now if your work isn't bringing in more than 8 dollars worth of profit an hour you won't get hired anyways, so if you're in a job chances are you are useful on your job and a pay-cut isn't as likely as you think it is, because you're pulling your weight.
a lot of minimum wage jobs are provided by small businesses... I like how you think that small business owners are some kind of sick freaks that are rolling in cash and are just licking their lips at the idea of cutting their workers' pay even more....
actually if you get rid of minimum wages a kid out of high school with like no skills instead of running up a huge debt going to college and coming out with a degree with which it's still incredibly hard to find a job nowadays can get a very low paying job doing something as simple as passing tools to a mechanic at a car service center, and learn actual valuable marketplace skills that are actually useful, and then he will be able to do a job that's actually worth a higher pay, and he will be able to get hired because he's not totally useless at stuff.
Frankly, you're wrong on many counts, and history has proven it multiple times.
As for what we could do to stop companies from outsourcing jobs, there are multiple things you could do. For one, you could give tax breaks to companies that hire U.S. employees and charge companies a tax for hiring non-Americans, We're basically the largest consumer market on the planet, companies aren't going to leave America because they don't get to hire overseas. *Bam* problem solved.
And no, eliminating minimum wages would be possibly the dumbest thing I've heard on the internet in a long time. Do you want to increase the wealth gap beyond the already ridiculous amount it is? I hear having 50% of the country controlling 2% of the wealth isn't good enough, we need to lower it by making the poor poorer! They don't deserve 2% anyway, they don't work hard and they don't deserve money.
WOW. That's exactly the point... we're the largest consuming market in the world... but no one wants to pay for people to produce here because it's too expensive because we consume so much... so we have the government constantly stimulate our spending with low interest rates, and stimuli, and this keeps devaluing our currency... Until people realize that all this shit that they send here... we will never be able to repay them for it with anything other than paper, because our own private sector isn't capable of competing anymore, so then they'll stop sending us stuff, and there will be absolutely NOTHING left in this country.
edit:
also, if companies are taxed heavily for hiring outside the US they'll move away and just export their stuff here...
You want to isolate ourselves from all the imports with high taxes? Well okay, all outside currencies will go up, as all of a sudden they'll have an abundance of stuff they're not selling to us, and we'll be stuck with the wreckage that is our post-stimulus economy. By the way all the bullshit service sector jobs that are only there to get the foreign products into american homes are also all gonna go poof. at least then it will be blindingly obvious that our economic fundamentals are shit, and we should have been promoting saving by the private sector to rebuild them in the future rather than trying to spend our way out of this situation.
You really know how to add to political and economic discourse.
Economics is not a perfect science, obviously, or there wouldn't be people still looking to discover new things. There are hard problems that existing models are unable to completely explain and the very nature of what is "obvious" or "rational" (rational expectations) in economics breaks down when different people have different internal models of the world.
The biggest problem with "people like you" is that just because someone says they "believe in keynes", you bucket it into the stupidest possible interpretation of Keynes possible. Many supply side economists think (from what I can gather) they Keynesians just want the government to spend infinite money to boost living standards for everyone (or something to that effect).... but Keynesians in America are still Capitalists (in the sense that anyone that doesn't want to abolish social security is a capitalist if they believe in all the other capitalist-type things), still believe that free markets are generally more efficient than the public sector, still believe that unsustainable deficits are bad and require a change in policy, etc, etc, etc
The way you argue economics/politics would be like a Keynesian saying that all supply side economists want 0 tax rates for everyone. Just a stupid exaggeration to try and make the other person look stupid without really coming to any real solution.
of course all supply side economists want 0 tax rates for everyone, but that's not possible. Neither is the spending of infinity money on consumption, but what it comes down to is that it's better to minimize the size of the government and therefore taxes and government spending.
obviously neither absolutes work, but working towards one leads to prosperity, and working towards the other doesn't.
That's not true either, China is deliberately following a policy of keeping their currency worthless compared to ours and lowering theirs in response to ours, because they don't want to consume. Even if ours dropped to the pits they'd still be exporting to us, because the last thing their leaders want right now is for their citizens to spend money on comforts. They're basically stocking up on as many investments and as much money as they can while increasing the size of their production until they eventually hit the maximum point, then they'll stabilize and start spending.
Exchange rates aren't actually that important generally speaking, until the difference becomes extraordinary.
and when they start spending then our money will be worthless in comparison and since all the producing jobs have moved overseas we will have nothing... result of? continuous spending, as opposed of saving to rebuild the economy.
EDIT:
to Whitewing:
The employees are massively over protected... you act like businesses can exist without workers. There's a reason why people aren't hiring, if it was profitable to hire they would... see the video I posted please.
If employees weren't over-protected, why wouldn't everyone hire a bunch of them and bully them around? It doesn't work like that. am I saying that employers should be able to bully their employees? no, but since there's unemployment so high it's obvious that they're protected so much that it's not worth hiring them anymore.
And you tax their imports too if they leave and just try to export here. It's a lose-lose for them, since there will be companies willing to fill in the gap if they just bail. People aren't hiring here in the U.S. not because it isn't profitable to do so, but because it isn't the MOST profitable thing they could do: they can hire elsewhere. Make it less profitable to hire elsewhere, and they'll hire here. Also, companies like a high unemployment rate, it makes the cost of unemployment extremely high and allows them to get away with terrorizing their employees and make unreasonable demands of them. High unemployment rates allow companies to bully them, it's the opposite of being protected.
Contracting the economy solves nothing. It doesn't fix the problem, it leaves millions of people screwed over and winds us up way behind where we should be. What we need to do is increase taxes on the extremely wealthy (yeah, $700 billion isn't nearly enough by itself, but it sure as hell is a great step in the right direction), make the right budget cuts to the right programs (primarily defense spending, but cut back on some of the entitlement programs too), stop the jobs from going overseas and promote hiring here, encourage consumption of products made in the U.S. over overseas products (if we have to, tariff imports more than we do), and keep people spending so we have a reason to keep producing and keep people employed.
And no, our currency won't be worthless, it'll increase in value once our economy starts growing again. It's a short run loss for a long run gain, wheras what you are suggesting is a short run gain for a long run loss.
all the jobs that spending protects are the jobs of people selling foreign products... I've said this 5 billion times.
You wonna kick out the imports? ok, well then all the people with the service sector jobs selling chinese stuff here will lose their jobs, If you give people more money to spend via debasing our currency.... Well then they'll still buy Chinese goods, the moment that our goods become cheaper than chinese goods all the people selling will lose jobs because we're no longer capable to produce as much as we want to consume.
The contraction is inevitable in your scenario as well, except that in my scenario we can start to curb the inflation, while in yours it's running wild.
I didn't say kick out the imports: I said tax them. Yes, it will mean people who have a job only selling chinese goods will lose them, but the gain in american manufacturing jobs will be about equal, and be of more long term benefit to us.
...
If you tax them to the point that their goods become more expensive than ours it's almost synonymous with kicking them out.
How are you going to get a gain in the american manufactoring jobs? you need people with money to invest in building and supporting factories, your spending will make it hard for our businesses to even keep up with the ever rising costs of raw materials (one of the reasons inflation is terrible) and your suggested policies punish saving... who is gonna have the money to invest in factories here?...
It's gonna be the same thing... if you think the competition for jobs is high now (15% true unemployment,) think about how high it will be when walmart is gonna start shutting down their stores because 80% of their stuff is imports from china...
There will be huge unemployment, competition for jobs will be even higher, and your spending policies will prevent people from accumulating capital to invest in manufactoring infrastructure.
You have it half way right, but you are still ignoring the fact that hyper inflation is a giant threat, especially when you combine taxing imports with stimulus spending.
BTW, I don't know how many times I have to say this: stop bringing up inflation. It's lower now than we want it to be, and it won't be a serious issue. We actually want higher inflation, only we can't get it because we're in a liquidity trap right now.
are you serious? inflation is a huge issue, we don't want inflation, because inflation makes it hard for us to buy stuff...
Yeah, some inflation is a good thing. We are currently in a state where we want more inflation than we have.
I disagree... what do you think the inflation rate is at right now, and why do you think we need it to be higher?
sry I meant higher not lower, why do you think it needs to be higher?
EDIT:
I guess it's because you want people to save less of the stimulus money?
but then the inflation will drive the middle-class under the bus, and them you're gonna have to give them stimulus too...
I just don't understand your reasoning...
you want higher inflation because it will make your stimulus work "better" (let's ignore that if the money is printed, then the stimulus is also creating inflation in it of itself.)
The stimulus takes the money out of the private sector, and directs it towards consumer spending.
Consumer spending on foreign products drives us further into debt.
Debt makes people want to save money because it limits the effectiveness of your stimulus...
EPT
