CoffeeCream wrote:PLAYER57832 wrote:You cannot continually lay off folks, cut wages to appease stockholders... raise prices ... and still expect folks to have money to buy things.
In this recession and downturn and time of poor business... the divide between the wealthy and the not wealthy (I don't say poor ... we are not truly poor in the US, despite all) is the highest it has ever been.
And, the percetage taxes they pay has never been lower ... though you would never know that listening to most of the news. (the "a bit above middle class" group, to contrast pay a great deal ... the truly wealthy don't).
I would like to look at the data supporting that idea. I'm a big believer in raising the minimum wage but the rest of that seems like back-handed socialism. The rich get richer and the poor get poorer. I can't think of a time when we haven't heard this charge leveled during an election year.
The data is hard to find. For a lot of reasons.
First, unemployment data in the US is based upon unemployment claims, which usually run out after 6 months (a few exceptions). Even the job data is skewed, again, by largely dismissing volumes of people who have basically just given up looking for work.
I answered some of this in my response to Nappy. I won't reiterate here, but just say that welfare to
employed people is really welfare to the employer as much as the employee. Can't afford to pay more? Then you cannot afford to do business. BUT, the reality is that so many of these companies that claim they "cannot" pay more, "cannot" pay medical insurance benefits, etc..... make their shareholders and execs huge profits.
Why was the chairman of GM allowed to take a hug bonus
at the same time he claimed they could "no longer afford" to pay medical for the retired workers ... who had been
promised they would get full coverage with retirement. Who, exactly do you think is supposed to pick up the tab? We, the taxpayers, of course. Adding insult to injury, GM has gotten tax break after tax break with the expectation that they would
maintain and create jobs. GM is just one example.
As for the rest...
It is very easy to see the top side of economics, but real economics takes the full circle into account. Employer pays worker wage so worker can go out and buy product, so employer can sell product and have money to pay worker ... etc.
The chain can break at any point. Right now, the point of breaking is the worker buying stuff. The only reason more people are not doing completely without right now is credit. THAT , and rising medical care costs, are the reasons for the rise in indeptedness in the US. Certainly, there is a lot of wasteful spending out there (though I will note, that "wasteful spending is EXACTLY what has kept our economy rolling and growing). BUT, I have only to look at my family, my neighbors to see how that is not always the case. We got into huge debt when my husband's insurance changed overnight and the next month my newborn son had to first, have some tests and second, had to be hospitilized with RSV (a serious respiratory infection). He is OK, now. BUT, we owed over $4000 in just a few short months. On top of that we had car troubles, heater issues ... etc. Friends and neighbors share similar stories.
AS for my source, I listen to NPR, watch/read Sue Ormon, and even my old college ecnomics professor.
This is even without getting into the issue many folks talking the "business" end try to forget ... externalities. These are NOT "free costs"... but they often are things the companies can ignore. Pollution is the best example. Two blocks from my house is what was a nice little trout stream. My father-in-law talks of bringing stringers home to eat. They needed them ... his father had died, leaving their mother to support the young kids. Then this stream became the dumping ground for several factories for years. The damage was, relative to other streams/rivers in our area (northwestern PA), actually little. Still, the trout and invertebrate populations coud not survive. Even in this MINIMALLY damaged creek, trout have only recently returned. (within 8 years). I would most definitely NOT advise you to eat them.
Head up north and there is this nice -- oops, better make that abandoned.... little community right next to a (almost empty) shopping center. What was the name?" Oh yes, Love Canal ...
Lakes Erie, Ontario, etc. all used to support huge fisheries. Now you are advised not to eat more than 1 fish a month. Less for infants and pregnant women. The companies are, for the most part long since gone. Superfund ... established to help towns and cities clean up these messes after companies are gone ... is basically bankrupt and expensive to use, at any rate. Cleaning up these messes costs far, far, FAR more than preventing them in the first place. BUT, try to impose legislation and you are "getting in the way of business".... introducing "ridiculous science" to support your cause (catch any of my creationist arguments ... note that the Bush administration is filled with strict Creationists ... the same "logic" is applied to dismissing these "crazy" claims of dangerous environmental impacts).
Anyway, that's starting to get off track. BUT, I just mentioned 1 example of externality and the most blatant, well-known at that. There are, of course, many, many others.
Employment is actually a direct cost ..BUT, ONLY IF THE EMPLOYER PAYS THE WORKER ENOUGH TO SURVIVE. IF they don't, then they are expecting society to pick up the rest of the tab ... and that makes it an externality. It also makes it corporate welfare.