Third Party & Independents Archives

Please, Do Consume

I suppose any of us could do as well. It just ain’t that hard to give away somebody else’s money. There are always more than a sufficient number of Karsi’s, needy corporations, failing gov’ts, Chinese banks, needy immigrants and people needing help with their revolutions to keep the working middle class too poor to consume loudly.>1=33032

And, because they refuse to consume, they have dragged the country, indeed, the world into this ugly economy. And, we wouldn’t have had to endure the great recession if the middle class would have realized their destiny and willingly have taken some pay cuts. The mfctring corp’s say their profits are back to pre-recession levels and that most benefits have conferred to the corporations with productivity growth outpacing wage growth.

The jobless recovery was going great, just great, but because several in the middle class can’t find work or don’t want to work this bunch is now starting to drag down the stock market.>1=33002>1=33002

Just yesterday I watched a congressional committee discuss US manufacturing and all agreed that to bring manufacturing jobs back we need the ‘free movement of ‘capital and labor’ or, a ‘gimme’ for shorthand. Gist was that Germany has done well throughout the recession with the average mfctring wage at around $48 while in the US it’s around $32. Still far too high, and they can’t find the skills they need in the mfctring industries.

It appears the ‘gimme’ is that manufacturer’s will move offshored money back to the US for investment if the gov’t will lower the cost of distribution and transportation, reduce regulations, lower margins and the corporate tax rate, and support sovereign investing allowing corporations to pursue overseas investments and foreign corporations to pursue inbound investments. And, when an immigrant receives a degree an automatic visa should be conferred at that time. Also, corp’s want a deal with universities where they can have input, influence and make the call on training programs. The committee seemed to be in full agreement with this ‘gimme’.

A committee member asked if anyone present had any feelings other than support for the free movement of capital and labor and nary a voice was heard. Magnanimous that the corp’s would like to drive it all, make the laws, self regulate, labor dump in the marketplace, set worker wages and control their training.

Would it not be more cost productive to just turn gov’t over to the corp’s as they have the financial depth and the where with all to handle that task as an aside?

Otherwise, we have the Corpocracy we deserve.

Posted by Roy Ellis at June 23, 2011 4:13 PM
Comment #324892

The problem is demand. The American consumer is tapped out. No equity to borrow against. Stagnant wages. Unemployment. The productivity gains of the past few decades have accrued to capital with almost nothing going to labor, the great consumer pool.

Corporations aren’t going to invest if there is no ability to consume the products that they could produce. Currently, there is a significant output gap. We can produce far more than can be purchased or consumed.

It is, therefore, not surprising that capital and corporations are seeking further reductions in taxes. That allows them to squeeze a bit more profit out of a stagnant growth environment. If you can’t sell more products, then cut the cost of production (labor) and reduce the taxes.

The idea that they will use the saved tax money for new investments production and jobs is absurd. They haven’t over the past decade. Why would they now?

Henry Ford understood the problem. There is a demand side to the supply-demand equation. A consumer driven economy with high productivity requires that the vast consumer market (labor) has sufficient income to purchase the products. He led the development of a modern consumer economy by increasing wages. He understood that it was penny wise but pound foolish to attempt to squeeze profits out of labor. This is exactly what has happened over the past few decades. Corporate profits have remained high but at the expense of labor and ultimately their consumer pool. There is a need for re-distribution of income from capital to labor and the great consumer base. Call it welfare capitalism, the term applied to Ford’s approach, if you will.

Posted by: Rich at June 23, 2011 11:06 PM
Comment #324918
Please do consume

I want to Roy but I can’t. Commodities are taking all my paycheck. I can’t buy consumer items or afford to go places, but I would like to.

Would it not be more cost productive to just turn gov’t over to the corp’s as they have the financial depth and the where with all to handle that task as an aside?

Haven’t we done that already? For the most part capitalism have won out over democracy, the politicians may claim to work for those that vote but in fact they work for those that get them the votes.

Posted by: j2t2 at June 24, 2011 10:19 AM
Comment #325008

Wash Post article relates that some 81 major companies have formed a group that is lobbying against new rules that would force disclosure of wage comparisons. The companies and congressional allies are saying that comparisons between the chief and everyone else is ‘useless’ information.

On Wednesday a House committee approved a bill that would repeal the disclosure requirement. According to Rep. Nan A.S. Hayworth (R-NY), who filed the bill to repeal said ‘it created heat but sheds no light’ and that calculation of the ratio would be a burden for companies, especially those with ‘global’ operations.

Executive compensation has more than quadrupled in real terms since the 1970’s and with the era of ‘greed is good’. In 1970 exec pay was 28 times the average worker wage and by 2005 had jumped to 158 times. Currently, the disparity is something like 436% or close to that.

The Center on Exec Compensation has led the repeal effort through the group, HR Policy Association, which represents the HR resources execs at 325 large corps. Last year the group paid the law firm ‘McGuiness & Yager, $1.5M for lobbying, according to

Several religious organizations have requested wage comparison info from large corps and see the transparency as meaningful information. Whole Foods is one corp that limits cash compensation to 19 times the average pay. In 2010 the avg annual wage was at $37K which dictated a salary cap at Whole Foods of $705K. However, the limit doesn’t apply to stock and options and a couple of top officials earned as much as $4.6M.

Few seem to be bothered over such disparity, apparently not realizing that, slowly, their quality of life is being ground down, brought into line with developing countries around the world. And, that as corporate ‘groups’ buy gov’t perks they increase their power and influence over the lives of every citizen.

Otherwise - - -

Posted by: Roy Ellis at June 25, 2011 9:16 PM
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