The Jobs Crisis: What Hit Us?

[dtotire]

The Jobs Crisis: What Hit Us?


Bob Burnett


Berkeley writer, retired Silicon Valley executive
Posted: August 13, 2010 09:20 AM


The US is stuck in an economic quagmire featuring near ten percent unemployment. As politicians argue about the solution -- massive tax cuts or increases in Federal spending -- what's missing is a succinct analysis of the problem. Why has America lost 8 million jobs?

The roots of the jobs crisis stretch back to the Ronald Reagan presidency when conservative economic ideology began to dominate American political discourse. At the forefront of this philosophy were three malignant notions: helping the rich get richer will inevitably help everyone else, "a rising tide lifts all boats;" markets are inherently self correcting and therefore there's no need for government regulation; and the US does not need an economic strategy because that's a natural consequence of the free market.

What followed was a thirty-year period where America's working families were abandoned in favor of the rich. Inequality rose as middle class income and wealth declined. As corporate power increased, unions were systematically undermined. As CEO salaries soared, fewer families earned living wages.

Conservative ideology produced a warped and brittle US economy, where more than two-thirds of our GDP was housing related: building, buying, and furnishing new homes or borrowing against existing homes in order to maintain a decent standard of living. When the credit bubble burst, the debt-based consumption model failed, taking down first the housing sector and then the entire economy, resulting in catastrophic job losses.

In order to be sustainable, the US economy has to generate 125,000 jobs each month. (To bring unemployment down to acceptable levels -- below 7 percent -- the US economy needs to generate 300,000 jobs each month for the next three years.) For this to happen, there have to be three positive conditions.

First, consumers have to be willing to spend money. Regardless of the conservative ideology, the US economy depends upon steady consumption by working Americans. The Reagan Republican theory incorrectly assumes that rich folks buying yachts and vacation homes catalyzes the consumer economy. Nonetheless, wealthy Americans have as much income as they have ever had but their purchases of Ferraris or diamonds has not been sufficient to boost the economy. Average Americans aren't consuming because they either don't have the money or are saving it because they are fearful.

Second, businesses have to be willing to hire. At the moment, many businesses -- outside of construction and commercial real estate -- have the funds available to hire but they either aren't hiring or are filling what should be full-time permanent positions with part-time temporary workers.

Third, the new jobs have to be decent jobs paying a living wage. Unfortunately, the Associated Press reported that of the 630,000 jobs created in 2010, 81 percent are low-paying service-sector positions. That's the sad backdrop to terrible unemployment data.

Since the Reagan presidency the number of decent jobs has steadily eroded. When a worker retires from a GM assembly line, and a job that pays good wages, he isn't replaced by his son or daughter; they go to work at McDonalds. There was an under-acknowledged "structural adjustment" that meant the US consumer economy could not function unless average Americans went deeply in debt: borrowed up to the limit on their credit cards or used up their home equity.

It's necessary to understand what went wrong with the US economy because fundamental changes are required to deal with the jobs crisis. So far the political rhetoric has been underwhelming. Republicans blame unemployment on the policies of the Obama Administration and argue the solution is to cut taxes, particularly for the wealthy. Democrats blame unemployment on the policies of the Bush Administration and argue the solution is to increase Federal spending. The New York Times correctly condemned both approaches noting that Republican policies produced the current economic decline and the "cut taxes to solve all problems" clearly does not work. The Times also described the Democratic approach as timid, failing to attack the systemic nature of the problem.

America has economic cancer and radical surgery is required. First, there has to be a massive redistribution of income by increasing taxes on both the wealthy and financial institutions (particularly those that were at the heart of 2008's economic meltdown).

Second, there has to be a second stimulus package that not only supports America's teachers and public safety workers but also strengthens the US infrastructure, in general. It's not logical to propose that American businesses provide better jobs without also ensuring that our schools produce workers who can meet employers' needs.

Third, the Federal government has to be involved in economic policy. The last thirty years has demonstrated that it's insane to assume the free market will do this. What we've learned is that the market follows the path of least resistance and dictates economic policy solely based on greed. Creating wealth for a handful of CEOs isn't consistent with the national interest. What are needed now are economic policies that produce decent jobs for average Americans.

The Federal government has to intervene and create the jobs that the greedy, shortsighted private sector hasn't provided.

http://www.huffingtonpost.com/bob-burnett/the-jobs-crisis-what-hit_b_681148.html

[Zenlitened]

1. K and enthusiastic R. - n/t

[KansDem]

2. I think therefore I rec...

:dem:

[whyverne]

3. Yes, this would work. It's already been proven to work in

other countries like Australia. But the Republicans aren't going to let it happen. They'll keep screaming "Big Government". I hate them.

[Warpy]

4. Damned few of us were saying this sort of thing 10 years ago

and those of us who were saying it were on the bottom, dismissed as fringe leftists, and kept out of media except obscure message boards on the net.

This man undoubtedly contributed to the whole mess by hiring temps so he could avoid paying benefits, but at least he's starting to wake up now.

Slowly but surely, the message of demand side economics is starting to penetrate the upper reaches of the pecking order to places it might actually penetrate the thick skulls of all the smart boys in the government.

The only way to get to recovery is to start at the bottom, to rebuild old infrastructure and create the new infrastructure the next businesses will use, putting money into pockets at the bottom and stimulating demand for goods and services those new businesses will satisfy. That is going to take government intervention because, as the OP author knows, no rich businessman ever handed out a job unless he had a lot of poorer men with money in their pockets waiting for the goods or services it would provide.

Business can survive with relatively poor capitalization. It can't survive without customers.

[femrap]

5. Great analysis of our

current economic mess. As I heard the other day, 1 million people out of work....give them a job paying $30K a year. What's that $30 billion....15 weeks in Afghanistan/Iraq (and I'm being generous).

$30K/year can go a ways in the fly-over states, not NYC.

[liam_laddie]

6. Big K&R! n/t

[Bitwit1234]

7. Proven over and over and over the FDR way was the best way

there is no reason that this country can not provide jobs to rebuild what needs to be rebuilt. And if tax cuts are to be given to business, it should be tied to how many jobs they create. Good benefit paying jobs. Not temp jobs. this administration is not fierce enough with big business. I also think all the loop holes in the corporations taxes should be closed. Also the tax exempt status of a lot of churches and so called non profit should be checked. A lot of them are scamming the country. Look at Focus on the Family. What gives them the right to remain tax free. THEY ARE SUPPORTING POLITICIANS. That is against the law.

I think a lot of stuff in this country should be tightened up. More regulated and put under scrutiny.

[Populist_Prole]

23. Agree FDR's New Deal definately primed the pump of the economy

Faux news RW idiots are more most ferociously opposed to that view than any other and point to WW2 as to what saved the economy. Gotta' laugh at their logic: Government spending for the "New Deal": Bad and did nothing to stimulate the economy. Even MORE government spending on the war: Made us the 1st-world strongest economy. Okaaayyyyy. ( rolls eyes )

[mrdmk]

8. The New Times Editorial the article references is also worth a read

link to NYT editorial: http://www.nytimes.com/2010/08/09/opinion/09mon1.html?_r=1&ref=editorials&pagewanted=print

The OP's referenced editorial is worth a read. The following text is the crux of the problem:

<from OP's editorial>
Third, the new jobs have to be decent jobs paying a living wage. Unfortunately, the Associated Press reported that of the 630,000 jobs created in 2010, 81 percent are low-paying service-sector positions. That's the sad backdrop to terrible unemployment data.
<end>

Back in 1979 I was with some friends having dinner. The TV was playing in the background with the news on. The news was doing a report on who and why wanted to change the economy. The catch phrase was, "we are going change the U.S. economy from manufacturing to a service based job market and supply the world with our knowledge! This transition should take ten years"

I turned to my friends and said, "how does everyone feel about going back to school and working in a office?" The consensuses was we were going down a Wall Street hell hole. Being the people who my friends were, we laughed as we sat at the table and had a great dinner.

The service-sector positions were in the works long before 2010 and we are living in the result...

[Raster]

9. 1001 Hearty Recommendations!!!

Obama, Congress, are you listening?

"America has economic cancer and radical surgery is required. First, there has to be a massive redistribution of income by increasing taxes on both the wealthy and financial institutions (particularly those that were at the heart of 2008's economic meltdown).

"Second, there has to be a second stimulus package that not only supports America's teachers and public safety workers but also strengthens the US infrastructure, in general. It's not logical to propose that American businesses provide better jobs without also ensuring that our schools produce workers who can meet employers' needs.

"Third, the Federal government has to be involved in economic policy. The last thirty years has demonstrated that it's insane to assume the free market will do this. What we've learned is that the market follows the path of least resistance and dictates economic policy solely based on greed. Creating wealth for a handful of CEOs isn't consistent with the national interest. What are needed now are economic policies that produce decent jobs for average Americans.

"The Federal government has to intervene and create the jobs that the greedy, shortsighted private sector hasn't provided.

[Jim Sagle]

10. What hit the economy?

[taupe]

11. I take issue

As an employer and small business owner I take issue with several of your statements. First, you say: "they either aren't hiring or are filling what should be full-time permanent positions with part-time temporary workers. Who are you to tell me that these should be full time positions? As the business owner I get to make that decision.
Second, you say: "the new jobs have to be decent jobs paying a living wage." Says who? Again, are you the economic czar? Or should this be the government's decision -- what everyone gets paid? What I pay for a particular job is MY decision, no one else's. This is what entrepreneurs do.

Third, "the Federal government has to be involved in economic policy." The government is not good at things like this. And what exactly do you mean by economic policy? That statement is totally vague.

Fourth, "there has to be a massive redistribution of income." You are welcome to your opinion, certainly. But I disagree. Your position sounds totally socialist. Socialism is very equal, but it does not produce a high standard of living for its people. Look at history. And remember, the pie is not fixed. The American economy is not a zero sum game. Each person earns his or her own income. Just because someone makes a very good income, does not mean it should be taken away and redistributed. This is not freedom.

Every job in America was created by an entrepreneur. To create more jobs we need to encourage and reward entrepreneurs.

[Name removed]

12. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Warpy]

13. Every job in this country was created by the customers

who are looking for goods and services.

Wake up and smell some reality. You will survive poor capitalization. You will not survive without customers.

Enjoy the unemployment line. It's coming.

[jtuck004]

17. Kick for understanding "demand". n/t

[taupe]

18. customers

You make a good point. Customers are critical to the success of any business. However, a business is not started by customers, businesses are started by entrepreneurs. And as every business person knows, keeping your customers happy and providing good value is the key to success. It is also critical to keep your employees happy since they are an important part of the business. Almost every entrepreneur I have met has a deep appreciation for his customers and for his employees. Without them he would not succeed.

The risks of starting a business are taken by the entrepreneur. The startup capital is invested by the entrepreneur from his savings or from money invested by friends or family or perhaps outside investors. The idea for the product or service is developed by the entrepreneur. So it is for these reasons that I stated that every job is created by an entrepreneur. Certainly there are other important aspects to a business including customers, but the entrepreneur is the one who's responsible for its creation.

[mrdmk]

14. As a small business you do have right to hire people as you wish

First, saying you are small business owner is vague. Please specify what kind of business you run. Not every business can be expected to have full time hires. Most of all, nobody is suggesting that this strategy applies to everyone; medium and large business the suspects here, especially public financial corporations that have a grab all can by any means including using illegal activities without repercussions. Everyone for themselves economic strategy is the real point of the article!

Small business entrepreneurs are the people who supply most of the jobs in this country. As a group, competing with a large corporation in the same business is difficult at best. Small business in some areas of business cannot even phantom the idea of starting-up (example: energy) because the large corporation are given tax breaks, subsidies, and a license to operate without oversight i.e. there is no competing with a monopoly or a oligarchy. You could say the green market is available to the small business, but where is the start-up money, the tax breaks, the subsidies and most of all, the open market with consumers willing to buy. A small business entrepreneurs may find a market for a product (there is a 99% failure rate for start-up small business) then be bought up by a large corporation at best or be muscled out of the market by financial interest using any means. Competition is being suppressed in the name of 'Free Market'...

What is really being said in this article is consumers must be empowered to buy i.e. have a job that pays enough to have shelter, food, entertainment, and a savings account to prosper. A lot of talent is being wasted in this country in the name of saving money. These savings are in the billions of dollars. Billions of dollars are going to the top 1% of this society. The top 1% are investing into hedge funds and the like which is a form hording, doing nothing for continuation more or less the expansion of this economy. The economy is now designed to let the rich become super rich by tying up 99% of the wealth in self serving securities and letting everyone else is fight for the 1% that is left over. In short, our economy is not sustainable in its present form.

You can say what you want about 'Socialism', first and foremost we are social creatures. That is a fact we all have to live with. People need other people to survive and continue as a society, no one person can do it by themselves. To get along, we have rules and ethics. A land without rules and ethics only a few will survive. In the end, there will too few survivors to continue. To continue as a society, the masses must be empowered to thrive and prosper.

If the history you are referring to is the U.S.S.R. and Communist China as socialistic failures, you need to re-examine those examples. The U.S.S.R. was and Communist China is a totalitarian form of government where the few controlled the many through repression. On the other hand Iceland was a pure capitalistic failure. Many Icelanders are in a world of hurt at this time. The only reason Iceland is surviving is with the assistance of countries with capitalistic economies, with strict rules of conduct, and social safety nets and empowerment. There needs to be balance and a mixture of capitalism and socialism in a successful society.

By the way, good-luck with your business!

[taupe]

20. thank you

mrdmk,

First of all, thank you for your in-depth comments. I really enjoy this process of thinking through the issues. It makes me get out of my own head, understand other people's perspectives, and forces me to put my thoughts together in new ways.

Here are my replies to your comments:

It makes no difference what kind of business I have. Business is business. And it is the business owner's decision about who to hire, for how long, and at what pay.

It is not difficult for small businesses to compete with large businesses. Small businesses are much more nimble and can provide better service to their customers. Big businesses tend to have lots of rules and policies and they apply these to all customers. Small businesses, on the other hand, can be flexible and are generally much closer to their customers. It is because the small business offers a service that the big business does not that gives small businesses their opportunities.

A small business would never want to go head-to-head with a large business. A large business usually has much better economies of scale. So what the small business does is pick off a part of the business that the big firm is not good at or does not do a good job for the customers. Ed Schultz remarked one time on his show that no one could start an oil company to compete with Exxon or a bank to compete with Bank of America. This is not true. I was involved with the startup of an oil company many years ago. It was started by two brothers and an engineer. It is still around today and doing fine and is now quite a bit bigger. I have several business acquaintances who have started small banks. They compete with the large banks by offering better services, loser fees, and a local touch.

Your comment on hedge funds is wrong. A hedge fund is simply an investment vehicle. It can invest in anything, absolutely anything. Some hedge funds invest in stocks, some in bonds, some in real estate, some in distressed companies, some in overseas stocks, etc. There is no hoarding going on here. One of the functions that hedge funds provide is arbitrage. It keeps our markets running efficiently. It helps ensure that there are buyers when someone wants to sell. This is an important aspect of our stock market as well. They keep the markets running efficiently. Although it is indirect, this has a very positive effect on our economy. When companies need capital for growth they can go to the stock market to get it.

A few other comments:
The economy is not "designed". It just happens. It happens by the interactions of millions of Americans buying things, selling things, and creating things.
To say competition is being suppressed by the free market is absurd. Competition is the essence of the free market.

One very important point: Our economy is not a zero-sum game. It is not a fixed pie. There is no one percent to be fought over. This is a totally wrong view of how an economy like ours works. Entrepreneurs create companies and they create value. Many startups do fail. This is actually a testament to the courage and persistence of entrepreneurs. Why do so many entrepreneurs keep starting companies if so many of them fail? Why would anyone want to be an entrepreneur?

If my company has a good year and does very well (and makes good profits), it does so because I have created value for my customers. My customers are better off after having done business with my firm. I am not taking money from anyone. There is no fixed pie of income that I am taking from. My customers are trading their dollars for the service I offer. It is no different than a lawn mowing business. Its customers would rather pay $100 each month than mow their own lawns. (This is not my business, I am simply using it as an example of how customers willingly trade money for a service or a product.) They are better off, or they would not do it!

There is nothing inherently wrong with socialism. If a nation wants to organize themselves that way, that is fine. Socialism is extremely equal. Some people may prefer this. However, if you look at history, socialism has not provided anywhere near as high a standard of living as has free enterprise.

[mbperrin]

22. You appear unaware that wages, hours, and working conditions are subject

to mutual agreement between you and employees. You cannot make those decisions unilaterally.

If you catch people in a bad situation, and you are able to get them to work for less money than they actually need to live, they will soon starve and quit. They won't even be as productive before then as they would be if they were paid decently. This is what Henry Ford knew and why he paid twice what the unions were demanding at GM. He built the largest car company in the world on that.

Please send me the name of anyone who has taught you economics - I'd like to punch the Ayn Rand Koolaid drinker right in the face. I have to overcome the complete lack of critical thinking about the subject and the million myths my students bring to the classroom every course, and I'm getting weary of it. On the other hand, if stomping out ignorance is what I'm paid to do as a teacher, my job is secure.

All countries are social organizations, hence, socialist by definition. What do you think all that business about the general welfare is, anyway? Truth is, Ayn Rand aside, none of us has ever done anything by ourselves. We depend on others for everything. I make my students play the following game until they get it:

Class, tell me something that you did today all by yourself with no help from anyone else, please.

"I drove to school by myself." Really? You built a road, extracted all the materials from the earth to build it as well as the machinery you used, then designed and built a car using more materials extracted from the earth with tools you built yourself, then dug an oil well, built a refinery, made all your clothes from resources and with machines created by you, and then drove here? That's amazing!

"I brushed my teeth by myself." Really? You made a toothbrush using raw materials extracted from the earth, using machines made from more materials you extracted, designed the machines and brush yourself without using knowledge or research from anyone else, including the ability to read, and then you repeated the process with the toothpaste, and you also derived the techniques and reasons why to brush, again all on your own without reference to any skills taught you by anyone else? That's amazing!

An hour a day of this for a week is usually sufficient.

Good luck in business. 83% of all new businesses fail within 3 years, so if you get past that, things will look up. BTW, the government considers any business with 500 or fewer employees a small business, just so you know.

[taupe]

24. employee pay

I agree with your comments about employee pay. I have found that there are three groups of employers with respect to how much they pay their employees. The first pay lousy wages and therefore experiences high turnover and high training costs, but these people are basically cheap so that is their nature. The middle group wants to pay the average amount, no more or no less. The third group pays better than average salaries because they want to keep their employees and experience lower turnover. In my opinion, these three types of employers reflects human nature.

I do not understand your question about my economics. What exactly do you take issue with?

Just because countries are social does not make them socialists by definition.

I have had my business for 27 years, so I have passed the three-year mark by quite a margin.

[mbperrin]

25. I asked for a name of a teacher of economics who has imparted the views

of Ayn Rand to you. Those views are what I take issue with.

Thank you for your comments on employee pay.

If you would help your neighbor fight a fire at their home, you are already a socialist. That's all that it means, that good ends are a goal of the economy, rather than simply a limited group of people taking all the money they can out of a system, whether any good comes of it or not. That's the system we've been swinging toward for 30+ years now, called various names, "free enterprise", "entrepreneurial priority", "laissez faire", whatever sounds good right now.

Good for you for being in business 27 years later. I couldn't afford to teach if the business I formed in 1968 weren't supporting us.

[taupe]

26. economics

I still am not sure what part of my economics are those of Rand. I am just an entrepreneur and a business guy.

I do take issue with your statement "people taking all the money they can out of a system" I disagree strongly. Entrepreneurs (and all businesses actually) do not take money out of the system. This is a zero sum view. Entrepreneurs create value. If they didn't, they would have no customers. My whole point is about creating value, making the pie bigger. I studied economics at Berkeley, but I do not agree with Laura Tyson on much. I have also read many books on economics in the last 2 years, and I agree with the Austrian school. But most of my knowledge about economics and human nature comes from my experience in the business world. I sell companies and I have worked with and seen many hundreds of companies. I have studied their business models and how they create value for their customers. So, I am self taught.

[mrdmk]

27. This not about being self taught, in the long run most people are self-taught

If you have a 27 year small business as stated that is beyond the 7 year life expectancy. That is exceptional and beyond all expectations. One question about your business, how long you do expect the business to continue after your departure? This question is not to put you into a corner or anything cruel. Your answer may show that your business model works for you and you alone.

About my statement about hedge funds was incorrect on it face. A hedge fund is more-or-less an insurance policy. Now, as you are probably aware, some corporations are taking life insurance policies on their employees. This was a common practice on the executive staff because of the cost of their sudden demise, just ask Donald Trump. Taking a life insurance policy on a common worker has a ethic issues, starting with (this is an extreme) the conditions of the work area and related stress of the job. It seems a group can take a life insurance policy on a person just because they have your Social Security number. To clarify, I understand taking a life insurance policy on a deep-sea welder, having insurance on this person in this type of job is up-front. Now making-up a hedge fund on a particular securities you sold has serious ethic issues which has happened and continues today. In the eyes of many, this counter-productive and subversive, and to the point, just wrong!

The correct statement should have about derivatives, which at this moment number in the multi-trillions of dollars. These so-called securities are nothing but a gamble that do nothing for the economy. That is textbook Finance 340...

In your reply my message, there is a contradiction about small businesses competing with large corporations. Please re-read your statement.

[mbperrin]

28. Yes, Ayn Rand is of the Austrian school of thought.

Thanks.

What value is created when my insurance company rejects a claim because the doctor is not in "their" network?

[taupe]

29. excellent question

Oooooh, a most excellent question! Let me think about that and get back to you. Damn, really good question.

[taupe]

32. Answer to your insurance question

Okay, I have given some thought to your question. First of all, the same thing happened to me. My insurance company said that the nearby emergency room and hospital are not on my preferred list. of course, I was not too happy about this.

A couple of points: If your insurance company did not offer you value, I doubt that you would purchase their insurance. So you probably shopped around and chose an insurance company and policy that was best for your needs, although it may not have been optimal for you. If it did not offer you value, why would you purchase it?

Secondly, and the biggest reason, is that the insurance industry is highly regulated. There is no competition between insurance companies in different states. If insurance companies could cross state lines and thereby increase the size of their risk pools, they could and would reduce their rates. Competition would definitely bring rates down.

In summary, the reason that we are not getting the policies that we would prefer is because there is not enough competition in the insurance market. Look at the automobile insurance market. I get junk mail every other week from Geico and others offering me cheaper insurance. Competition is the key to getting the most choices and the best prices.

[mbperrin]

33. You're starting to think a bit now. The answer of course, is that no value

is created by the transaction I described, only profit for the insurance company.

Think about this now: does insurance actually reduce risk, or does it pay people for risky behaviors? If it pays people for risky behaviors, isn't that a moral hazard?

[taupe]

35. re insurance

I am not an insurance expert, just an entrepreneur and a business guy.

It depends on risk to whom? Generally, insurance reduces risk for those purchasing it. I do think the government bailing out businesses and banks presents a moral hazard.

[mbperrin]

37. See, insurance does not reduce risk. No planning or prep to avoid the

adverse event has occurred - just that you will be paid if it occurs. No need to be an insurance expert; plain old common sense will do.

Most all the early political economists felt that insurance was a moral hazard. By creating the illusion that risk is reduced, people may be more prone to do the risky things than before. That's real moral hazard. Yes, the bailouts are a moral hazard, for precisely the same reason. We are not rewarding good behavior - you only get the money for behaving badly, just like any other insurance.

And yet, there is an insurance industry with large profits - but there it is, adding nothing of value, likely increasing risk with the system. We're paying people to rock our boats.

[taupe]

39. insurance again

Ok, now you are losing me. People are not forced to buy insurance, they do it voluntarily. I have auto, health and house insurance. It reduces my risk. If my house burns down, I do not lose as much as I otherwise could. How can you say it does not reduce risk? Why else would I buy insurance?

[mbperrin]

41. Umm, in Texas, if you don't buy auto insurance, you go to jail.

But voluntary or not doesn't count. How does buying insurance prevent your house from burning down or even lessen the chance? It doesn't. On the other hand, in dire straits, you might consider arson to get the payout. Your risk of burning is greater, not less. You're being paid for bad things happening. That's a moral hazard.

I agree you buy insurance because they have convinced you that it reduces risk. They used to sell cigarettes to improve your wind.

[Name removed]

15. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Doctor_J]

16. MUAHAHAHAHAHA

Socialist tax dollars pay for the roads to your store, the water that runs through your pipes, the sewers that get your stink-free shit, your obviously sub-standard education, and great portions of the internets you use to proffer your fascist bullshit.

Governments in places like Europe, South America, Canada do quite well setting economic policy. This country, governed by Glen Beck and Rush Limpballs, needs to be overthrown in favor of one that works for the people.

Enjoy your trip back to fox nation.

[taupe]

19. politeness

Dear Doctor J,
I am sorry that you had to revert to name calling. I would suggest that rather than calling people names you should engage in polite and intelligent discussion. Try to develop good arguments and support them with sound reasons. There is no need for name calling.

As to your points, I have no problem with the government building roads or sewers or pipes. I believe this is a good function for government to be involved in. However I pay a water bill each month and a sewer bill each month. These items are not paid from my tax dollars, I write a check each month.

Europe is not a good example of governments setting sound economic policy. For the last two decades, Europe's unemployment rate has been almost double that of the United States. This is a systemic problem. Their social welfare system is unsustainable because there are not enough young workers to pay for the aging population.

[Skittles]

21. LOL, what an arrogant twit you are

[4dsc]

30. Good explanation of 30 years of failed conservative economic policies.

Spread the word on the failure of conservative economic policies..

[taupe]

31. check your facts

You had better check your facts. The American economy grew at an unprecedented rate over the last 30 years. Our GDP grew from $2.8 trillion in 1980 to $14.7 trillion in 2008. In real dollars, the growth was from $5.2 trillion to $11.8 billion. This is huge growth, especially for an economy as big as ours.

I could not find the average annual growth rate, but it is quite high, like 2.5 or 3%. And to give you some historical perspective, growth was 1.9% from 1900 through 2000. Our growth over the last 30 years is truly remarkable growth for an economy as big as ours.

[cap]

34. enjoy bankruptcy, your customers have no money to spend due to low wages...

your part timers have got to eat! You are paying them below subsistence wages! Subsistence means rent money plus food.

My family went through this in the Great Depression. My family starved. When you pay less than what an apartment's rent + food, you are paying below subsistence. In many parts of the country, it also means having a car of some sort and the ability to pay for gas and maintenance for that car.


They can't buy your stuff because the first things they are spending on means food, shelter, and transportation.

Oh yeah, and being an entrepreneur means no unemployment. You can't get on welfare these days (it's only $220/month, if you do) unless you are a single parent. Hope your family values are holding up, you'll need to go hit your relatives up.

[taupe]

36. assumptions

How do you know I have part-timers? How do you know I pay below subsistence wages? You are making some assumptions. What is your point of accusing me of something when you really have no idea?

I actually pay high salaries (not wages) because I want to keep my people. In my business, my employees must be trained and that takes about 9 months until they are productive. By paying higher than average salaries, I attract better and more experienced people. But that is just my personal preference.

But, for the sake of argument let's say I pay low wages. I have to pay at least the minimum wage. So, maybe we should raise the minimum wage to go along with your description of what someone needs to live on. Do you think that is a good idea? Will raising the minimum wage help reduce unemployment? Maybe we should make it $25 per hour, that would really help people.

And one more thing. America is a free country. I can pay my people whatever I want (as long as it is more than the minimum wage). This one really irks me. Criticizing me for not paying enough! It is like the Wal-Mart thing. Hey, at least I am employing people! How many people are you employing? If everyone was an entrepreneur there would be no unemployment in America. Absolutely zero unemployment!

[cap]

38. Look at the Gini index for the USA and compare it to

other industrialized countries.... We sure aren't number 1 in terms of equality or opportunity. Real wages have not kept up for the average American worker over the past decade thanks to the Republicans that entrepreneurs like yourself have been electing.

You are very irked by people daring to ask for more.... You sound like the Beedle in Oliver Twist... MORE.... YOU WANT MORE!

There's a lovely article in the Providence Journal a while back talking about what happened when people brought back the poor house during the Great Depression. The owner of the workhouse was FREE to pay his workers the minimum and he did. The wretches in that workhouse were so pitiful looking people used to throw them bread.

The teenage boys in foster care were fetched in the spring for planting and returned in the fall after the harvest. They worked 14 hour days for NO Pay. Building contractors did the same thing. I know, my uncles were those children. My mother worked for no pay in a store when she was 12. Why, pray tell, were these innocent children in such conditions. Because entrepreneurs loved free labor and entrepreneurs refused to hire my grandparents on a steady basis and pay them enough to support a family. My grandmother collapsed at work due to malnutrition and my grandfather was blinded. No entrepreneur wanted to hire the blind. Entrepreneurs paid my grandmother so poorly that having a pickle was a treat for her children when she could afford anything above the bare minimum. The state came and took the kids away from my parents. The entrepreneurs didn't care a whit what happened to the families. Entrepreneurs told my family they were lucky to have a job... You are bringing up the same arguments that were told to my grandparents. It was so bad in the next town over, one day, people charged a factory, hurling bricks at machine guns. 3000 people died that day. Those folks were pretty ticked off at entrepreneurs being FREE to pay them whatever they felt like.

I am very happy that the Obama Administration's Department of Labor has been cracking the whip on businesses who have been keeping workers on contract after a year and not bringing them on as employees. And, I am just tickled that they have been cracking down on the use of interns as unpaid labor. They have been going back and making business follow the laws that were flouted under Bush. We've had 8 years of way too much freedom for entrepreneurs. Word on the street is that they will put EFCA in as a labor rule if they can't get it through Congress. Can't wait to see a revived union movement.

I just do not admire entrepreneurs the way you do. Entrepreneurs have their place but their drive needs to be balanced by responsibilities to other people. If you have to low ball people's salaries and wages, you have no business being in business. Being an entrepreneur takes a different temperament. It's not enough to be good at your trade; you need the personality traits for sales and management. Not everybody has those traits or can cultivate them. Being an entrepreneur also means having capital. Not everyone has capital or the access to capital.

If you think you can make it on the minimum wage, just try living on it without the help of family. And I don't mean on a temporary basis; I mean permanently... as in that's the way it is. Try living on it in a major metropolitan area like New York City.

[taupe]

40. SHOULD

I am sorry for your family history, it sounds pretty rough. But this is 2010. There are many laws on the books, including the min. wage law, that prevent these things from happening now.

I am amazed at how many people make arguments about what other people SHOULD do. This is a free country and apparently you have a problem with that. If business is not free to pay people whatever they want (above min. wage) then what should they do?

In today's America, no one is forcing anyone to go to work for their company. They offer the job and the salary and a person can either accept it or not. They can get a job at another company. And competition, free market competition, is what creates competition for workers and that is why we are all not getting minimum wage. Competition for worker is what determines salaries and wages. When I hire people, I must pay a competitive salary or the person I want to hire will not go to work at my company. So I pay a good salary.

Go start a company and pay your employees whatever you like. Don't tell other people and entrepreneurs what they SHOULD do. Entrepreneurs have the guts to start companies. They are the main reason America has the highest standard of living.

No other country in the world has the opportunities that America has. Name one! People move here from all over the world because of the opportunities and the freedom that America offers. I have many friends from other countries who have done this.

If you want equality, they you should wholeheartedly embrace socialism, if you already have not.

[midnight]

42. Did NAFTA, CAFTA do this?