Tag: economics

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I am amazed when I see posts like the one above. People who want to do away with taxes and regulations have this idea that once they are free from taxes and regulation that they will have all this extra money to spend and lead a glorious government free life. Unfortunately the tax free, regulation free past was miserable. It is only with the expansion of government which regulated the market economy and the taxes paid by the public for these changes did this general misery end.

Once you remove taxation and regulation, people will be presented with an array of new bills which have to be paid. Things like nuclear weapons, the army, the navy, the air force, the justice system, police protection, fire protection, road repair, street lights — all these things and so much more will need to be paid for. Then people will have to figure out if their restaurants meet health standards, buildings are being built so that they will stay up during earthquakes, stopping people from dumping toxins into rivers, checking to see if every household is disposing of human waste properly, to name just a few. Who will do it? How will they be paid?

Is Government perfect? Absolutely not. Could it be done better? Of course. Is this a reason to do away with it completely. No. No more than a Market Economy can’t do everything to meet all of our needs, at least, not without the help of government.

Here is the bottom line — the vast majority of people in this country want a market economy. This isn’t going to change in the near future. In order to make this market economy work, we also need a strong government presence to ensure that the rich, people who have power and money, don’t abuse this power and money to take advantage of people who do not have power and money. This also isn’t going to change in the near future.

This means that we have to figure out a way to make these two, sometimes, antagonistic systems work together. Is this perfect? No but then no system is perfect. Ever. This is our common challenge — how to make an imperfect world work for as many people as humanly possible. It will always be imperfect and we will always be working to make it better. But, given the present interlocking structures that is our system, eliminating Government is absurd and unworkable.

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I managed people who held low level jobs and limited opportunities for advancement. They are, by and large, an unmotivated bunch. They did their work adequately and left on time. They weren’t there for more than a paycheck. Good for them, I say.

One of the things my managers frequently tasked me with is how to motivate these people. And before I could say more money they then added the painful restriction without offering them more money. More money was always the hitch. The companies wanted to motivate the employees without paying them more. Needless to say, nothing we ever came up with worked.

The problem here is that the highly compensated people who run companies have convinced themselves that more money only works to motivate high level people. Low level people want something else. I attended seminars where I was told countless times that employees actually want other things than more money. They want respect. They want autonomy. They want acknowledgment. Notice that all of these things are free for the company. They are also vague and difficult to deliver for the direct managers. How much autonomy can you give to a person who has a highly structured job with expectations of coming in on budget and on time? If you didn’t deliver, you were encouraged to do better; if you did well, you got a pat on the back.

The budget for employee incentives were such that it was easiest to reward the group instead of the individual. So Donut Fridays and elegant Christmas parties were thought of enticements which never delivered the expected punch. I actually had one employee ask if instead of going to the Christmas party could she instead have the percentage we paid on a per person catering charge in cash. She would rather have the 29.99 than spend time at the party. I had to explain to her that this was a group incentive and her choice was the party or nothing. She, obviously, was being facetious but her point was made — the company was giving her something she didn’t want.

Even more ironical is that when I relayed this information to my boss, she completely understood. This to me, speaks volumes, about corporate culture — everybody knows this won’t work, but since we can’t give more money individually we are stuck we these group benefits that nobody cares about and won’t deliver. In other words, everyone knows these actions are doomed to failure from the start but continue doing them because nobody has a better idea.

I worked for a company that diligently surveyed their employees on how they felt about work. A neutral company took the survey, the results tallied and delivered to the employees. Every year the areas where my department scored lowest would be our focus to improve for the next survey. Except, of course, low pay. Everyone knew we couldn’t change that so low pay was a problem when the first survey was taken and low pay was a problem on the last survey I was there for. I am betting, with almost 100 % chance that I am right and after being away for six years, low pay is still one of the lowest scoring areas for my department.

The higher ups, convinced by seminars they attended where they were told that higher pay is not the major concern for employees, made us middle managers attend these same seminars so that we too can understand that higher pay was not the reason people worked. We learned how to encourage employees, how to discipline employees, how to reward them without giving them any money and, of course, nobody was convinced.

What is so baffling to me is this resistance to giving more money when the higher ups know the way to get people to work harder is to give them more money. This is, after all, the argument for giving rich people more money. We want them to work hard right? These people are the innovators, the entrepreneurs, and the risk takers. They have to be rewarded. If you take away their money, they won’t work very hard. But if you give them money — will the sky is the limit.

Exactly. So why should regular employees be treated differently? It is a blindness to the very economic tenets that Business so enthusiastically embraces. But by all means, continue with the Pizza Parties and Donut Fridays. I am sure one day that it will eventually work.

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One of the enduring mysteries of American Tax laws is why do the Rich need so much help.

Let me start with tax laws because this is where the Rich do their best to milk the rest of us. A tax bill is money owed the government for services provided. Now you may not like to pay taxes (who does?) but the political institutions that guide our communal living has determined this is the money a person owes. Citizens have an opportunity to change these laws by electing people of a similar mind in the frequent elections held in this country.

It is the price for living here in the USA — the greatest country on the face of the earth, right? But the Rich are constantly complaining that they need more money in order to juice the economy and if you give them more money it will actually help everyone else because the Rich will be spending money on their businesses. So since the election of Reagan in 1980, taxes have been routinely cut and tax breaks have been instituted to such a degree that many rich people and companies presently pay absolutely no income taxes.

How is this working for everyone else? Have the rich fulfilled their promise to make the rest of us rich with their selfless spending. Surely the Americans must have the richest poor people on the face of the earth. They must be swimming in luxury — great health care, cheap housing, good public education.

But this isn’t the story. Why hasn’t all this largess to the Rich had any effect? Hmm. Let me think about this. Perhaps they haven’t been juicing the American economy. How could this be? They claim to love this country so much, why hasn’t all this love and money translated into a more stable economic situation for everyone else. What could be wrong?

The Rich do have an answer. They just need even more tax cuts. They just haven’t been given enough money to juice the economy. This means everyone else will have to suck it up when cutting government funded programs for the poor and the middle class. The American taxpayer simply can’t afford to help everyone and it is vital that the Rich get even more money then, and only then, will the rich have enough money to spend the rest of us into prosperity.

Let’s try a little thought experiment. What if, instead of giving money to the rich, we gave it to poor and the middle class. They will buy groceries, cars, air conditioners, and a whole array of products that, you got it, will juice the economy. In fact, because there are more just plain folk than there are rich people, it might just juice the economy better and faster than giving money to the rich. I don’t know but I would like to give it a try. Giving to the rich hasn’t exactly worked as promised.

But the budget. We haven’t collected enough in taxes to pay for all this help. Right. Because we are giving the Rich so much back in tax reduction, we are going into debt and unable to afford actions that might help everyone else. Get out your handkerchiefs. Why is it that the only time the Republicans care about the budget deficit is when it involves expanding programs that help the poor. They don’t give a damn about the budget deficits when they are cutting taxes for the Rich which has exactly the same effect — budget deficits.

The whole premise of helping the rich in order to help the poor is so demented. It is a topsy turvy Alice through the looking glass view of living. Our most economically secure citizens — the people with the most money, the best healthcare, luxury vacations, personal airplanes and such — always need our help while we can’t help our least economically secure citizens who don’t have money, or healthcare, or even a safe place to lay their head at night. Helping the poor is always seen as bad while helping the rich is necessary. How does this make sense?

That this story keeps being told, with a straight face no less, is depressing. Years of low taxation and cuts in social services have shown, it to be patently false. But hey ho, I’ve got mine.

Until I don’t.

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Because government programs like SNAP and Medicaid are paid for by the government, the government qualifies and monitors the people. who receive these benefits in order to ensure they aren’t buying liquor and cigarettes. There are legitimate arguments on whether this type of costly monitoring is necessary, however, I am willing to go along with them because if some people, in order to maintain programs that help the poor, need this kind of information in order to have them, I am all in. Qualify and monitor. These are the type of compromises that make governing in a politically diverse country possible.

What is annoying is the same oversight is not given to people who receive tax breaks. They just get the money and can do whatever they want with it including buying liquor and cigarettes. Now the notion here is that these good people are going to spend the money they received in tax breaks in investing money in their businesses thus creating more jobs however they are under no obligation to prove this. They could be spending the money on call centers located overseas and spa vacations for all we know. But no one asks them to show how they are spending these breaks on creating jobs here in America.

Here in lies the problem I have with tax breaks. They are unmonitored and given without nary a thought on how these windfalls are actually spent. So what, you might ask. Even if the jobs are created for call centers located in India and European vacations — this money eventually gets put back into the economy for the good of all. Right?

Well, yes but then very same thing can be said for giving money to the poor. Buying liquor and cigarettes at the local convenience store juices the American economy too. In fact, giving money to the poor is more likely to juice the American economy because the poor stay locally while the rich might wander off to Tahiti or Bali to spend their money.

Some people would argue that tax breaks are allowing the rich to keep their money and they should do anything they want with it. I would argue that it isn’t their money. The American people have a tax rate, whether you like that tax rate or not — it is the law. The tax obligation is the amount owed before tax breaks are calculated. The tax breaks then become government benefits — like Medicaid or SNAP.

If government benefits for the poor need to rigorously monitored then the same idea applies to tax breaks for the rich. I would like to see more tangible evidence that the rich are using their money wisely.

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Since Trump’s election, I continue to be puzzled by the passivity of the Billionaires Boy’s Club. The system, though imperfect and could be a lot better, has worked reasonably well for a broad swath of the American people particularly the wealthy. The very same men who explicitly or tacitly support Trump’s rampage against the Federal Government are attacking the system that made them rich.

What more can these people at the very top of the heap want? Despite their frequent complaints to the contrary, the American people, and the rich in particular, are taxed very little. These billionaires act as if the government has actually hobbled their chances on obtaining wealth. Musk has in the neighborhood of 244 billion dollars. Bezos has 197 billion. You can see the whole list here. They are billionaires for Christ’s Sake. What has government deprived them of? A 15% Federal tax bill?

Also, notice how Musk and his DOGE buddies are only going after programs that help the poor and the Middle Class — Social Security, Medicaid, Medicare — while remaining silent about tax breaks for billionaires. Tax breaks, which almost exclusively benefit the wealthy with no expectation that the money they save from eliminated taxes are reinvested into industry, are good. While government programs that help the poor and the middle class are bad. Helping people only encourages dependence on the Federal Government.

So, the already wealthy are demanding even more sacrifices from the less wealthy in order that the already wealthy can make even more money so that they will, hopefully, reinvest this money into the economy. Why are the already wealthy so dependent on the Federal Government for investment money? Of course, few people phrase the question that way.

More troubling is that there is no credible plan on how to replace this functioning system other than the economy will be so good that there will be no need for the federal government. I find it a little difficult to believe that the homeless will be shocked so profoundly by these new limitations that they will suddenly become employable. I, for one, would like a little more detail. What happens to the poor? What happens when Social Security is gone? How does this support better public education? How will healthcare became more accessible? Nothing but silence.

These people, who have benefited most from the present system, are just hoping that their immense wealth will protect them from the fallout of this chainsawing frenzy. The rich no longer have the idea of noblesse oblige that, because they have benefited from the system, they also have an obligation to help other people. They will watch the carnage from a safe distance. At least this is what they hope.

Burn it all down. None of it is any good anymore. We will figure out how to rebuild later. The old Viet Nam war adage applies here — we had to burn the village in order to save it.

Thanks for nothing.

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Throughout my work life, I have been told numerous times that my wages were in line with industry standards. For some reason, this bullshit answer actually shuts down any follow up questions regarding increases in workers wages. How can you argue with wages that are in line with industry standards? Every one else is getting the same.

But we should. Start with why is keeping wages in line with the industry standard even the goal. Wouldn’t you want to have the best wages to attract the best workers? Keeping wages in line with a standard wage is unfair to the regular worker particularly if the company is a financial success.

I understand if a company is struggling and needed wage concessions to survive, the employees might agree to those cuts in order to keep the company going. People wouldn’t be saying you have to keep your wages in line with industry standards. The company needs saving, sacrifices have to be made.

Then why would you say that when the company is successful? Shouldn’t the workers share in the success of the company?

The concern is that if one company gives their low wage workers a pay rise, that other companies, within that industry, will have to pay higher wages in order to compete. Yes, exactly, after all isn’t that what market capitalism is all about. The best workers should get best wages. But, no, this isn’t the case. Wage increases at the low end of the scale causes inflation.

This same philosophy, however, does not apply to wages at the high end of the scale. Large increases at the high end of the scale doesn’t cause inflation to the broader economy because fewer people receive them. It does, however, cause wage inflation for those few people who get them. This is why there has been such a dramatic rise in wages for upper management.

This isn’t, however, capitalism because the low wages are artificially low to control inflation which everyone agrees is important except when it comes to prices and executive wages. There is an industry standard for low wage workers and companies want to adhere to this standard to keep wages low across the industry. Inflation, you know.

So whenever I hear people moan about how bad employees are today, I ask — are you paying above market wages in order to get the very best people. If you want good workers, you have to pay for it. Right? Isn’t that the whole spirit of market capitalism. If not, then why exactly do you think your industry standard wages will get you the employees you want? It makes no sense in a capitalist economy. You should expect mediocre employees with little interest in putting in their full effort into the job because they could lose their jobs today and find a comparable job tomorrow.