Robert Scheer: Fail and Grow Rich on Wall Street

[marmar]

from truthdig:



Fail and Grow Rich on Wall Street

Posted on Nov 24, 2010
By Robert Scheer


Welcome to the brave new world of post-bailout capitalism. The Commerce Department announced Tuesday that corporate profits are at their highest level in U.S. history, and the Fed released minutes of an early November meeting in which officials predicted a stagnant economy and continued high unemployment.

The lead on the New York Times story read like a line from a Dickens novel: “The nation’s workers may be struggling, but American companies just had their best quarter ever.” What the Times story neglected to mention is that the bulk of the increase in corporate profits was nabbed by the financial industry rather than manufacturing and other productive sectors. A whopping $33.3 billion out of the total corporate profits increase of $44.4 billion went to the banks and investment houses that those same workers had bailed out with their tax dollars.

Much of the rest of the corporate profit, in the non-financial sector, was also taken out of the hides of workers through increased “productivity” growth—meaning they had produced more for less personal income. Case in point: the plant that GM is reopening in Orion Township, Mich., where, under a deal negotiated with the beleaguered UAW union, 40 percent of the workers crawling through cars on the assembly line will be paid 15 bucks an hour. That’s about half the traditional UAW wage.

The Obama administration now feels totally vindicated for bailing out GM. Such a deal. Let’s offer up half a clap for the news that GM came back from bankruptcy to mount a successful IPO and pay something back to the taxpayers, which is better than nothing. Some jobs were saved, and that prospect was why folks like me supported this bailout in the first place. ........(more)

The complete piece is at: http://www.truthdig.com/report/item/fail_and_grow_rich_on_wall_street_20101124/

[displacedvermoter]

1. You beat me to the punch on posting this

but this is sickening,and I await any and all who can defend this action as good for us and our economy.

Corporate profits are at their highest level in history, while Union workers find their wages cut in half, while the Obama administration congratulates itself on this travesty.

[lfairban]

2. WTF?

40 percent of the workers crawling through cars on the assembly line will be paid 15 bucks an hour. That’s about half the traditional UAW wage.

Assembly line workers usually get paid $30/hr.?

And they wonder why their jobs are being outsourced?

[mbperrin]

6. $15 is the minimum wage from 1968 adjusted for inflation to today.

That minimum wage is what I made working in bank mail room in 1968. Do you not think car assembly is a skill?

I teach, in Texas, and I make right at $42 per hour. Why would highly skilled workers not be worth 3/4 of a trained teaching salary in a notoriously low-wage state?

Yet, many feel that CEOs of failed companies bailed out by wage earners deserve millions in bonuses for being smart enough to suck up that money. Are you one of those? If so, why?

[lfairban]

12. Skill:

That minimum wage is what I made working in bank mail room in 1968. Do you not think car assembly is a skill?

If assembly only requires a High School Diploma, then I would NOT assume it requires more skill or even as much skill as a job requiring a degree.

I teach, in Texas, and I make right at $42 per hour. Why would highly skilled workers not be worth 3/4 of a trained teaching salary in a notoriously low-wage state?

Worth, in this context, is controlled by supply and demand. Since there seems to be an inadequate supply of $30/hr. jobs for non-degreed employees, it looks to me as the markets have not valued them as highly as you would have liked.

You are of course, free to hire as many people at $30/hr., as you deem worthy of that amount. If they are so valuable, why have you not hired them yet?

Yet, many feel that CEOs of failed companies bailed out by wage earners deserve millions in bonuses for being smart enough to suck up that money. Are you one of those? If so, why?

No, I am not, but I have a good friend that does. But he is a coolaid drinking ditto head. I am currently studying him in order to better comprehend his problem.

[mbperrin]

13. Where to start? First, your assumption that all degreed personnel

are somehow better trained or more highly trained than any non-degreed personnel is simply wrong. I made custom furniture and restored antique furniture before I lost the use of my fine motor skills. Before I returned to school to get a degree in order to teach ( a job which does not require the use of fine motor skills), I made a little more than twice what I make now. With a high school diploma and 20 years of practice and on-the-job training. That was actually close to being a market, since each transaction was made with different customers and negotiated one by one.

Worth is never controlled by supply and demand. That is another word for utility. It is an internal unit which cannot be compared or even measured, nor would any economist try (yep, that's one of my degrees - economics). Your actual claim is that those wages are controlled by supply and demand, yet that is also wrong. The current wages were reached in a monopsonistic market, one in which there is only one buyer - in this case, the government. Management was delighted, of course, because the effect of monopsony is lower prices, in this case for wages, just as the effect of monopoly is higher prices.

Why haven't I hired them? I'm not in that business. Economics teaches us to specialize in order to achieve maximum production, which is the goal of any economic system. My government taxes and employees were involved in the hiring, and are consigning them to the equivalent of minimum wage, which I think we can all agree is not a living wage, or if you think so, I feel sorry for anyone dependent on you for a decent standard of living. Yet, these same government types are allowing huge banks to write giant bonus checks to assholes who ran their companies into the ground. If I must choose between skilled workers building a product like cars which I use and enjoy over some banking asshole who has been charging me for the use of my own money, that's an easy call. Cars.

Your friend's problem is the same as yours - you believe that there are free markets, and that those markets efficiently allocate resources, products, and payments. Nor for some long time in this country. Adam Smith observed it best when he noticed that whenever business people meet, even in social situations, that the conversation quickly turns as to how best to defraud the public.

[lfairban]

21. Could you explain this?

My government taxes and employees were involved in the hiring, and are consigning them to the equivalent of minimum wage, which I think we can all agree is not a living wage, or if you think so, I feel sorry for anyone dependent on you for a decent standard of living.

I don't think I understand it.

[mbperrin]

30. Sure. This two-tier system is a government-designed condition

of the taxpayer bailout, hence my taxes and government employees are involved in the hiring of these new people at the equivalent of the minimum wage when I was young. Second, this minimum wage is not the same as a living wage, a wage which allows an ordinary standard of living, that is, access to a home, transportation, food security, entertainment, education, time to be with family and that sort of thing. Third, if you think scraping by payday to payday, renting forever, telling your kids no as a regular means of interacting with them, then I feel sorry for anyone that depends on you for their standard of living.

OK?

[lfairban]

27. That's not what I said.

First, your assumption that all degreed personnel are somehow better trained or more highly trained than any non-degreed personnel is simply wrong.

Then you cited a specific case of a job that requires a high degree of skill.

What I said was:

If assembly only requires a High School Diploma, then I would NOT assume it requires more skill or even as much skill as a job requiring a degree.

This is a much more general statement.

I could be wrong her, because I don't really know much about assembly line work, but short of information to the contrary, I don't assume that it will require as much skill as is generally the case for occupations that require a degree.

I also wouldn't assume that assembly line work requires as much skill as making custom or restoring antique furniture. Do you think it does?

[mbperrin]

31. Assembly line work is very important from a safety standpoint.

Roscoe, our new hire for low wages, is in charge of assembling disk and bearing assemblies for the wheels, but he has not been trained in the proper amount of grease to place in the press while installing the inner and outer wheel bearings, hence, some have too much and some have too little.

Consequences: those with too little may suddenly seize and quit; if this occurs at highway speeds, rollover is likely; those with too much grease may find that under heat of operation, the grease extrudes itself onto the lining or disk surface itself, rendering that particular brake useless when wanting to stop, resulting in an accident. This is one tiny aspect of the assembly and has huge safety consequences; lives could be lost, property damaged.

On the other hand, if I do a poor job of retying the seat support in your 1860s Morris chair, you may suffer the embarrassment of a saggy seat cushion, so those consequences seem a little less dire.

Whether furniture or cars is more skillful, I made around $85-$100 per hour doing furniture, far more than the $30 an hour car assembly folks. Those are just two wages being made. I suspect that the autoworker wage is purposely lower, because those workers took retirement packages and insurance and other benefits in lieu of more dollars per hour, things I had to provide for myself as a self-employed person.

So I took my full wages on a current basis, and autoworkers were willing to wait for some of theirs. Every job has its own particular hazards and consequences, as well as satisfactions.

[Skittles]

35. LOL, you are SO elitist

I can guarantee you that many degreed people COULD NOT PERFORM the jobs of many assembly workers

[provis99]

33. college degrees are totally unnecessary for almost all jobs in America.

Think of it: what job does an English degree, a drama degree, or for that matter a business degree train you for? Answer: it doesn't train you for any job, because that is not the purpose of college.

[ChadwickHenryWard]

8. So what?

Don't they deserve fair compensation for their labor? Just because you can send the job oversees and force somebody in the third world to do it for a tenth or less of the American wage doesn't make it right. $30 an hour allows these people to raise a family, own a home, send their kids to a decent school, and have a little bit left over to take a little vacation every year. It's what they need to live a modest, middle-class lifestyle, which is something that everybody deserves.

[lfairban]

11. So you are saying . . .

. . . that an American supporting his family at $30/hr is more important than 15 breadwinners in a foreign countries that are willing to do the same job for $2/hr?

Or are you saying that everybody in this country is worth $30/hr, even if they didn't bother to get an undergraduate degree, just because they live in this country?

[mbperrin]

14. I don't know what he's saying, but I am saying, I want my government

to treat the people who live here better than anyone who lives anywhere else. Let their governments look out for them - that's their job.

I am saying that any job worth doing is worth significantly more than $15 per hour in this country, because people cannot live with any degree of security or comfort on that wage. Truth is, if a job cannot provide security and comfort for the holder, then the person needing those job services needs to do it themselves.

My grandson, who is a plumber, finds that many well-off people complain about his $90 per hour/ 4 hour minimum charge on the weekends, but they don't want to plunge their own shit down the drain, so they pay. His kids have nice things, and they take a month vacation every year to different places. Is that wrong, because after all, he has no degree, just 6 years of training and two state exams to pass in order to do his job.

[ChadwickHenryWard]

17. I partially agree.

While I don't think we should have a policy of never helping foreigners, you are right that our government's primary responsibility is to look out for its own citizens, and the primary responsibility to foreigners lies in their own governments. That's just a matter of organizational principles. While I am at least in theory in favor of the dissolution of national boundaries, while we still have the modern nation state, their responsibility will primarily be to their designated group of citizens.

You are absolutely right about your grandson. He has a right to a good wage and a comfortable living. Just because he's "working class" does not mean he should be made to live on the margins of society.

[mbperrin]

19. Thank you!

Your thoughts are well taken.

[ChadwickHenryWard]

29. I'm glad.

[ChadwickHenryWard]

16. Don't bother?

What the fuck is wrong with you? Not all poor people are lazy. Not everybody can get a college education. Some people can't afford it, and some people just aren't smart enough to do the work. Neither of those are reasons why they should have to live a life of poverty. All people deserve a living wage, regardless of whether or not they went to college. And living in this country has nothing to do with it. Everybody on Earth deserves a living wage. Those foreigners who work for $2 an hour do so because they don't have unions to fight for their rights. It is the unions in this country that secured those factory workers a $30 an hour wage. They are willing to work for less because they are desperate and it is nothing short of exploitative to pay them starvation wages. They are not more noble or less greedy because they are so debased that they will work for next to nothing.

[lfairban]

22. Don't agree

Don't they deserve fair compensation for their labor?

To quote Clint Eastwood's character William Munny from, "Unforgiven", "Deserve's got nothin' to do with it."

[ChadwickHenryWard]

28. It has everything to do with it.

All progress is made by those fighting for what they deserve. Everything from the minimum wage, overtime pay, the forty-hour week, weekends, sick leave, vacation time, workers' comp, health and safety regulations, the right to sue an employer for mistreatment, comes from people fighting for what they deserve. Organized labor has a long and proud history of fighting for what is our right as workers.

And "deserve's got nothing to do with it," is not an argument.

[lfairban]

32. Are you disappointed?

Did you come here for an Argument?

Actually, "deserve's got nothing to do with it," is the whole point. Do you think the government, or anybody else, is going to provide everybody in this country with a $30/hr job just because that is what they deserve?

I would consider that an unreasonable expectation.

"overtime pay, the forty-hour week, weekends, sick leave, vacation time, workers' comp, health and safety regulations, the right to sue an employer for mistreatment," these are reasonable expectations. $30/hr for every job, everywhere is not.

[Jim Sagle]

9. Which side are you on?

[lfairban]

10. I am on your side.

I am helping you make better decisions.

Friends do that.

[Jim Sagle]

18. No, you're on the other side - the side of off-shoring and union-busting.

[lfairban]

20. And you are on which side?

The side of protectionism?

Since I was an enthusiastic union member, I don't believe I would count myself on the "side" of union busting.

Unions have a legitimate role, but that does not excuse what happened with the UAW and American automobile manufacturers. Pushing wages up to $30/hr was not a good idea since it compelled companies, rightly or wrongly, to send jobs overseas.

[Jim Sagle]

23. DLC hogwash!

[lfairban]

24. Not really.

I am not real happy with the DLC either.

[Jim Sagle]

25. Riiiight.

[provis99]

34. I see you just failed to read the OP.

It said American companies are raking in record profits,not companies in China.

[ShamelessHussy]

26. yeah, don't have to be a rocket scientist to figure that out, eh...

though, they often like to say americans are not skilled enough, too... but it all breaks down to $$$ in the end.

enjoy the ride to the bottom :hi:

[democracy1st]

3. K & R

[HCE SuiGeneris]

4. Monopoly anyone? n/t

[txlibdem]

5. Meritocracy

There goes that old lie, eh?

[Overseas]

7. K&R ! //nt

[soryang]

15. Commit fraud and grow rich on Wall Street

"Financial innovation" such as securitization of mortgage debt was nothing more than systemic fraud to compensate for a failed ideology of "free trade" and its concomitant outsourcing of industry. MERS is a systemic fraud to avoid state property laws. The same is true of credit default swaps and other derivative contracts which are little more than unethical efforts to insure risks in which one doesn't even hold a principal interest.

The country is run by crooks and liars as the saying goes.