Friday, November 28, 2008

Cudahy: Out of Ideas

I warned Cudahy back in June. But it looks as though they're out of ideas and still pushing forward on plans to build a Wal-Mart. Tis the season, so, as Charlie Brown would say, "Good grief!"

Plus, is a company that doesn't even pay it's workers their full amount of compensation for hours worked the kind of company Cudahy wants?

For Further Reading:
Major Flaws Uncovered in Study Claiming Wal-Mart Has Not Harmed Small Business

Thursday, November 27, 2008

Corrections to the $70-Per-Hour Myth

Class warfare is alive and well. And what better time for it to rear it's ugly head -- when we're teetering on a depression. But, then again, if you were the financial wizards, free marketeers, and laissez faire capitalists whom had boosted, brokered, and gotten us into this mess, you'd want to find a scapegoat too. Well, who better to blame than those damn unionized workers. Luckily, there are still a few good journalists out there to squash such nonsense.

Detroit's $70-an-hour auto worker
Do Autoworkers Make $70 Per Hour?
$70 per hour meme
Countdown's Worst Person in the World
Rachel Maddow & Ron Gettlefinger of UAW
Rachel Maddow Dissects White Collar V. Blue Collar Bailouts
Unions Being Scapegoated

Let's also take a look at what the executives are making.

Executive Excess 2008
Executive Incentives
Executive Pay (Business Week)
Executive Pay (Economic Policy Institute)
Executive Pay (PBS)
Executive Pay (NY Times)
Executive Pay News
Executive PayWatch (AFL-CIO)
Five Lousy CEOs Who Get Fabulous Pay
My Big Fat CEO Paycheck
Pay Without Performance

Now, for some perspective, let's look at inequality in the United States.

By The Numbers

And, some basic income numbers (obtained from the Census Bureau).
Percentage of the population & income:
30% earning under $25,000
55% earning under $50,000
75% earning under $75,000
85% earning under $100,000
95% earning under $150,000

An attempt was made here to conceptualize this issue and present it with a bit more breadth than it is being given by the mainstream media. We can see the problem isn't that workers are making extraordinary sums of money and putting their employers at a competitive disadvantage. The problem is the greed of executives, their mismanagement, and their unwavering obsession with short-term gains and share price manipulation, rather than the long-term sustainability of their companies.

But this is class warfare, never mind the truth. I'm off to Washington in my private jet to ask for a bailout. Damn those unions!

Sunday, November 9, 2008

No More Excuses: The Democrats' Mandate

"[Obama] neither received a broad mandate from the public nor the needed large congressional majorities." -- Columnist Robert Novak, on President-elect Barack Obama's 7.5 million popular vote margin win, 11/05/08


Q: Bob Novak, is 51 percent of the vote really a mandate? NOVAK: Of course it is. It's a 3.5 million vote margin. -- Novak, on President Bush's 2004 re-election, 11/06/04

[Thanks to the Progress Report for catching this.]

Both of George W. Bush's election "victories" were dubious, heavily protested, and legally questionable. Yet somehow this was a mandate for the Republicans. They moved forward with no regard for the Democrats and with no regard for the best interests of the country. They ran up deficits, entered us into an unnecessary war, and diminished our standing in the world.

Obama won by a landslide with almost 8 million more popular votes and now all we hear from the right-wing and the punditry is how Obama must reach out, must be bipartisan, must work with the Republicans, etc.

This election was a total repudiation of Republican policy. This was the American people giving power to the Democrats to take this nation in a new direction.

Obama is going to do what he sees as right for the majority of citizens of this country. Republican trickle-down economics – gone! Your wedge issues – gone! Pretty much anything coming out of your mouths – gone! Sit back and enjoy; just stay out of the way. Watch how governance is supposed to be done. I would say they might learn something, but we know that just doesn’t happen with Republicans.

Sunday, November 2, 2008

Measuring Tax Burden by Progressivity and Social Justice

Two reasons invariably come up when discussing the tax burden: who pays and why they should or shouldn’t pay. “The richest – top 1% - pay a whopping amount of the total as it is. The amount they pay is more than what any other quintile or percentage grouping pays.” Another variation, “The total percentage paid by the top 1% as a whole is the largest. The richest – the top 1% - pay 30 percent of total collections, therefore, they pay more than their fair share.” [Implying that because their percentage paid is higher than the total number (percentage) they represent.]

Conversely, this is wrong for two reasons:

The truest way to measure progressivity/ regressivity or fairness is by one’s percentage of their total income that goes to taxes (tax incidence). This gives the most realistic sense to the true burden taxation imposes upon one.

It is also a matter of social justice. Whether you have $1 million or $1 billion dollars to your name, you’re living pretty well. Increasing the taxes on such a fortunate soul (raking in $1 million per year) by one percent would result in $10,000 [yes, I know, scary redistribution]. Now, don’t you think our neighborhoods, streets, schools and a host of other infrastructural, institutional, and socioeconomic factors would be better if we instead dispersed that $10,000 amongst, let’s say, 5 people, giving them each a $2,000 tax-break infusion? Their burden is eased a bit, they’re happier, they shop for a few more things, and they eat out and spend more money in their local economy [probably at one of the wealthy taxpayers’ establishments].

Or, this increased revenue could allow the government to implement public works projects, with unionized labor, to repair roads and bridges, electric grids and water systems, and to create regional light rail systems, among a host of other environmentally sustainable projects. This could establish good green jobs and pave the way for future growth and development, whilst also helping to prime the pump and get us out of the nasty economic doldrums we're in now.

This was the case during the Great Compression after WWII when a single breadwinner could provide for a family. Growth and productivity soared during this period. And, the U.S. was a shining beacon on the hill, an example for the world.

Business investment has not improved during the latest round of tax cuts. It actually increased when Bill Clinton raised taxes – alongside this the economy boomed. Spreading the wealth seems to be good policy for owners and workers alike. It allows higher levels of demand to be sustained, lessening the volatility of the market, leading to more stable growth. We might have averted our present disaster if we had followed the recommendations of some officials (Sheila Bair of the FDIC and Brooksley Born formerly of CFTC) and tightened regulation over the opaque financial instruments that took strong growth and tried to put it on steroids, ever increasing risk.

It just seems wrong to me that people who have more money than they will ever be able to spend gain no solace from knowing that just having a smaller percentage of income in their account(s) could lead to so many social improvements. Plenty of robber barons (Carnegie, Rockefeller, Gates, Buffett, Soros, Cudahy, Zilber), most in their twilight years, realized they had benefited well from Society’s institutions and were therefore obliged to give back. It is sad the paradigms of greed is good and get all you can have won out over a more peaceful shared prosperity.