When CNN hosted a GOP debate in Tampa, there was no doubt that some of the fringe issues were abound to come out. The 2 hour sludgefest of slapping down Social Security and suggesting that the EPA would be best oversought by those 'abused' by them (you know, big oil, steel manufacturers etc). For two hours, each candidate did backflips to polish off those tea party credentials. When all was said and done though, the biggest losers were not any candidate but rather the audience, whose reactions demonstrated a lack of empathy and compassion usually only seen in sociopaths.
The question was one directed at Ron Paul in which a hypothetical situation involved a young 30 year old with a job and no health insurance befalls a tragedy and requires long term medical care. Being the most libertarian candidate, Paul's initial answer is focused on personal responsibility and bemoaning the expectation that the government would take care of him. When the moderator, Wolf Blitzer, follows up with the natural "would you just let him die?" Before Paul can even backstep and emphasize private charities' role etc, the audience can be hear loudly proclaiming "Yeah".
To put this into perspective: the audience in Tampa fell somewhere to the right of RON PAUL.
1 day after the 10th anniversary of 9-11 and the remembrance of lives lost, the vitriol directed at our fellow man returned with a vengeance at this debate and demonstrated the absolute worst in the American people. The fact that there are people who shun any degree of support for someone under the most extreme circumstances is perhaps a greater tragedy than what happened at 9-11. This kind of thinking is poisonous and frightfully infectious and is a sign of a society in decline. Given the high rate at which conservatives claim to be Christians, I urge them to go back through their New Testament and remember Jesus's stance toward compassion toward your fellow man. Even for non-Christians, the instructions to care for the infirm and be charitable should you have the means are moral lessons that transcends the boundaries of religion.
I am appalled that the audience acts so boorishly to a question that deserved nuance and understanding of the situation. Even if it was someone who made a choice not to purchase private insurance, it is not our place to be the judge jury and executioner. When someone's life is boiled down to mob mentality shouting, we have lost all sight of our priorities and are no better than the civilizations we thumb our noses at for their perceived barbarism.
13 September 2011
03 September 2011
Rick Perry Wants to Take a Sharpie to the Constitution
The moment Rick Perry (note: Not Parry with the A for IowA) entered his name in the hat for the presidential candidacy, he was immediately hailed as the darling on the right. With staunch conservative credentials and a cross on his sleeve, he was considered by many to be a fresh option in a field that has been battered by countless speech gaffs. Not waiting long to get bloodied, Perry's views have come to light and the more Americans hear the facts, the more Michelle Bachmann seems like a reasonable candidate.
For starters, Perry wants to make a few revisions to the Constitution: for someone who lauds the founding father and original intent in arguing for small government, he's quite unhappy with the constitution and effectively wants to redraw everything he finds to get in the way of his libertarian utopia. This is even better than most as he had a book come out last year co-written with not quite back from the dead politician Newt Gingrich to detail how he would take a sharpie to the constitution and remake it into a religiously libertarian utopia.
Of the most noteworthy changes would be a complete revamp of the Judicial Branch of government. In addition to ending lifelong appointment as designated in Article III, section I, he would like to permit for a super-majority (2/3rds vote) of Congress to override any decision made by the court. In fearing judicial activism, Perry and much of the Tea Party forget the reasoning for the founding fathers to establish the Court in such a manner. The reasoning, not entirely unsound, is that the role of a judge involves the interpretation and study of law in a highly controversial context. In allowing for the lifelong appointment of judges, the founding fathers sought to keep judges out of the political arena and remain capable of addressing concerns of law as scholars without the fear of repercussions. In the event of a greatly unpopular decision, Congress has always had the ability to draft an amendment to be passed by 2/3rds of Congress in addition to ratification by 3/4 of the states, rendering his argument of dealing with court actions moot. Perry's move would break that balance and hand more power to the arguably most powerful branch of government, the legislature. The federal court system would become the target of political posturing and based on the current climate turn into something dreadful.
The other change of great consequence being proposed is to abolish the 16th amendment to the constitution, best known as the income tax amendment. While this amendment was passed in 1913, it should be said that the concerns that an income tax would become necessary to deal with various national functions had been tossed around since the Civil War. Keeping in mind that in the early days of our country, states remained largely autonomous and our general stance toward isolationism limited the role of the federal government up until that point. Unfortunately with issues such as wars, the costs and complications necessitate a more centralized point of operations to perform with efficiency. From the Civil War onward we did a whole lot of fighting as well considering we were involved in the Spanish-American War, The rebellions in Philippines, Samoa and Hawaii as well as even having a presence in the Boxer's Rebellion over in China. These actions along with greater interaction in global affairs as a whole created a need for a federal pool of revenue and thus the income tax was ratified as an amendment.
Perry calls the income tax as the 'road to serfdom' with little regards to the vast improvement in the quality of life for most Americans, in part because of the taxes we all paid. The interstate highway system would have never developed with the speed and quality that it had without federal funds that ensured that cities and states would be interconnected even in areas in which building a road would not be economically feasible in the private sector. While originally intended for the movement of military equipment and personnel, it was a move that revolutionized entire regions of the country. Social spending allowed for small and/or poor communities, those that traditionally had limited access to education to have better footing. A university education became more accessible and the investment in those people proved advantageous in the rapid development of a skilled populace. And that goes without saying when you speak of the New Deal and Social Security....
Oh, he wants to get rid of that one too.
He calls Social Security a ponzi scheme and a failed social experiment. While there is a problem with the post war baby boom and subsequent baby bust from about 1965-1985, Perry uses words to portray it as a fraudulent program and wasteful. Yes, what a socialist scam to take care of your elderly in a manner that allows them to retire instead of working every day until death came as was the norm for most working class families prior to the program's establishment. Never does Perry address what he would do as an alternative for those senior citizens, many of whom live in poverty despite their meager checks. I know I am not alone in this rationale as polls consistently show the vast majority of the population (often around 80%) view Social Security as having a positive effect. Is reform needed to preserve this program for future generations? Certainly, but to say that we should eliminate the program and presumably leave the elderly to the whims of an unforgiving private market is appalling and unforgivable.
Okay, so it is socialist... does it really have to be such a negative thing when everyone benefits?
But he does remember to make mention of brushing up his religious credentials to state his wish to push through a marriage amendment to restrict who willing adults wed. He must be missing a copy of his New Testament, you know the books in which Jesus spent his life acting to the benefit of others, most notably the needy. I'm not Christian by faith, but I'm quite a fan of those who follow in his example. It's one of those lessons that should have universal appeal regardless if you think the guy is the son of God or not.
There's several others he depicts in the book he put out with Newt Gingrich (the moral god-fearing man who has left more than one wife under dubious conditions). The balanced budget amendment has already been deliberated a few days back. The repeal of the direct election of Senators is one that I find problematic, but not one that would irreparably alter the nation.
Of course, typical politician he is, has been trying to backtrack his stance on some of the things he wrote in his book. The Social Security issue has been a particular thorn in his side considering he needs to count on those senior citizen votes to win a number of states including electorate heavy Florida and Ohio. If the Pew poll is correct in that 87% of Americans consider the program to have a positive effect1 and 60%2 of Americans consider keeping benefits intact as a priority (32% said the deficit was more important), he's got a big foot to remove from his mouth. Of course, rather than being honest about his beliefs like Ron Paul (you know where he stands if nothing else), he has taken the road most traveled and use his spokesman to say how he merely wanted to put issues on the table (despite stating an outright issue with the ideology of Social Security). He's waffled on states rights concerning gay marriage in how he does not care what states such as New York decide upon while signing a document stating he would press the amendment if elected to the Presidency. It's this kind of sleezy, snake oil campaigning that galls me the most.
Listen, if you want to crumple up the constitution and begin anew, then say so. Better yet, if your state wants to be the guinea pigs for this experiment of a pure libertarian, state focused government, I'll be glad to see what Texas does. Just keep in mind it would mean no federal dollars, no asking for assistance in the event of a national disaster, and no backpedaling from explaining to countless constituents how their way of life is going to change drastically. If it works there, I'd be willing to bite. Until then, I'm calling a lot of this hot hair and showboating to show how much more conservative than thou Perry is from Bachmann or even Paul.
But don't toy with desecrating a document that was well thought out enough that it only needed 27 amendments in its time (one of which was to nullify another) and influenced the documents of many other modern democracies with petty politicking.
Link: Rick Perry and Newt Gingrich's Book, "Fed Up"
Link: Public Wants Changes in Entitlements, Not Changes in Benefits
Link: Pew Poll States 60% of Americans want Social Security Benefits Maintained
For starters, Perry wants to make a few revisions to the Constitution: for someone who lauds the founding father and original intent in arguing for small government, he's quite unhappy with the constitution and effectively wants to redraw everything he finds to get in the way of his libertarian utopia. This is even better than most as he had a book come out last year co-written with not quite back from the dead politician Newt Gingrich to detail how he would take a sharpie to the constitution and remake it into a religiously libertarian utopia.
Of the most noteworthy changes would be a complete revamp of the Judicial Branch of government. In addition to ending lifelong appointment as designated in Article III, section I, he would like to permit for a super-majority (2/3rds vote) of Congress to override any decision made by the court. In fearing judicial activism, Perry and much of the Tea Party forget the reasoning for the founding fathers to establish the Court in such a manner. The reasoning, not entirely unsound, is that the role of a judge involves the interpretation and study of law in a highly controversial context. In allowing for the lifelong appointment of judges, the founding fathers sought to keep judges out of the political arena and remain capable of addressing concerns of law as scholars without the fear of repercussions. In the event of a greatly unpopular decision, Congress has always had the ability to draft an amendment to be passed by 2/3rds of Congress in addition to ratification by 3/4 of the states, rendering his argument of dealing with court actions moot. Perry's move would break that balance and hand more power to the arguably most powerful branch of government, the legislature. The federal court system would become the target of political posturing and based on the current climate turn into something dreadful.
The other change of great consequence being proposed is to abolish the 16th amendment to the constitution, best known as the income tax amendment. While this amendment was passed in 1913, it should be said that the concerns that an income tax would become necessary to deal with various national functions had been tossed around since the Civil War. Keeping in mind that in the early days of our country, states remained largely autonomous and our general stance toward isolationism limited the role of the federal government up until that point. Unfortunately with issues such as wars, the costs and complications necessitate a more centralized point of operations to perform with efficiency. From the Civil War onward we did a whole lot of fighting as well considering we were involved in the Spanish-American War, The rebellions in Philippines, Samoa and Hawaii as well as even having a presence in the Boxer's Rebellion over in China. These actions along with greater interaction in global affairs as a whole created a need for a federal pool of revenue and thus the income tax was ratified as an amendment.
Perry calls the income tax as the 'road to serfdom' with little regards to the vast improvement in the quality of life for most Americans, in part because of the taxes we all paid. The interstate highway system would have never developed with the speed and quality that it had without federal funds that ensured that cities and states would be interconnected even in areas in which building a road would not be economically feasible in the private sector. While originally intended for the movement of military equipment and personnel, it was a move that revolutionized entire regions of the country. Social spending allowed for small and/or poor communities, those that traditionally had limited access to education to have better footing. A university education became more accessible and the investment in those people proved advantageous in the rapid development of a skilled populace. And that goes without saying when you speak of the New Deal and Social Security....
Oh, he wants to get rid of that one too.
He calls Social Security a ponzi scheme and a failed social experiment. While there is a problem with the post war baby boom and subsequent baby bust from about 1965-1985, Perry uses words to portray it as a fraudulent program and wasteful. Yes, what a socialist scam to take care of your elderly in a manner that allows them to retire instead of working every day until death came as was the norm for most working class families prior to the program's establishment. Never does Perry address what he would do as an alternative for those senior citizens, many of whom live in poverty despite their meager checks. I know I am not alone in this rationale as polls consistently show the vast majority of the population (often around 80%) view Social Security as having a positive effect. Is reform needed to preserve this program for future generations? Certainly, but to say that we should eliminate the program and presumably leave the elderly to the whims of an unforgiving private market is appalling and unforgivable.
Okay, so it is socialist... does it really have to be such a negative thing when everyone benefits?
But he does remember to make mention of brushing up his religious credentials to state his wish to push through a marriage amendment to restrict who willing adults wed. He must be missing a copy of his New Testament, you know the books in which Jesus spent his life acting to the benefit of others, most notably the needy. I'm not Christian by faith, but I'm quite a fan of those who follow in his example. It's one of those lessons that should have universal appeal regardless if you think the guy is the son of God or not.
There's several others he depicts in the book he put out with Newt Gingrich (the moral god-fearing man who has left more than one wife under dubious conditions). The balanced budget amendment has already been deliberated a few days back. The repeal of the direct election of Senators is one that I find problematic, but not one that would irreparably alter the nation.
Of course, typical politician he is, has been trying to backtrack his stance on some of the things he wrote in his book. The Social Security issue has been a particular thorn in his side considering he needs to count on those senior citizen votes to win a number of states including electorate heavy Florida and Ohio. If the Pew poll is correct in that 87% of Americans consider the program to have a positive effect1 and 60%2 of Americans consider keeping benefits intact as a priority (32% said the deficit was more important), he's got a big foot to remove from his mouth. Of course, rather than being honest about his beliefs like Ron Paul (you know where he stands if nothing else), he has taken the road most traveled and use his spokesman to say how he merely wanted to put issues on the table (despite stating an outright issue with the ideology of Social Security). He's waffled on states rights concerning gay marriage in how he does not care what states such as New York decide upon while signing a document stating he would press the amendment if elected to the Presidency. It's this kind of sleezy, snake oil campaigning that galls me the most.
Listen, if you want to crumple up the constitution and begin anew, then say so. Better yet, if your state wants to be the guinea pigs for this experiment of a pure libertarian, state focused government, I'll be glad to see what Texas does. Just keep in mind it would mean no federal dollars, no asking for assistance in the event of a national disaster, and no backpedaling from explaining to countless constituents how their way of life is going to change drastically. If it works there, I'd be willing to bite. Until then, I'm calling a lot of this hot hair and showboating to show how much more conservative than thou Perry is from Bachmann or even Paul.
But don't toy with desecrating a document that was well thought out enough that it only needed 27 amendments in its time (one of which was to nullify another) and influenced the documents of many other modern democracies with petty politicking.
Link: Rick Perry and Newt Gingrich's Book, "Fed Up"
Link: Public Wants Changes in Entitlements, Not Changes in Benefits
Link: Pew Poll States 60% of Americans want Social Security Benefits Maintained
02 September 2011
Writing Cleanup
Several posts were written in a hurried manner during breaks at work and now that I look at them, the writing is not up to my personal standard. Typically I write and revise at least twice before it goes public, but my time limitations left few options.
Going to tweak a few of them over the next couple days.
Going to tweak a few of them over the next couple days.
August Produces Statistically No New Jobs and Slipping Wages: Why Corporate America Needs to Bet on the American Worker and Stop Blaming the Government
The August national job report came in today and to say the reports are dismal is an understatement. The preliminary number is at approximately 17,000 jobs. That amounts to 350 per state. While much of the media is neglecting to report on how the numbers are a touch skewed by the Verizon strikes that involved somewhere in the vicinity of 40,000 employees (which was just resolved), it is not as though the revised numbers are bound to be impressive. And people are calling on the Fed and the President to act on it.
The only problem is that there is little the government can do.
Based on all current conditions we should be seeing an uptick in job creation. Even with the tumultuous stock market since the buildup to the debt ceiling increase, stocks have recovered much of the loss endured in 2008 and 2009 with the Dow Jones sitting close to where it was at the start of 2007, which had a rapid ramp up before busting 18 months later. The Fed has kept interest rates and nearly nothing, priming the business sector to invest and expand businesses. Congress has been reluctant to end subsidies for key industries despite the rising debt in fear that it would harm the economy. Private organizations saw record bailouts in 2008 and the states have received money to stimulate local economies. As we all know, corporate tax code is written in such a manner that highly profitable industries and companies pay a pittance of the stated rates. The health care bill has not gone into effect yet save a handful of provisions that are a minuscule impact on the industry. Company profits are up by and large and the private sector is said to be sitting on the largest quantity of cash at hand than any time memorable. Despite the attempts to create favorable conditions for job growth, the private sector has been exceptionally stingy on the matter.
It's easy to try to use President Obama as a scapegoat for such matters even if his impact on economic matters, particularly concerning the private sector, is low. Contrary to what many may believe, the Fed and Congress are most involved in economic policies and can really only attempt to create policies that encourage business production. If companies take those propitious conditions and still refuse to hire, there is little government can do to further entice them. Nor can the government force the banks to loan their money for start-up enterprises. It's a classic case of leading the horse to the trough.
The economic problems lie in the private sector and their continued emphasis on cost saving policies such as outsourcing and wage reductions/hiring at lower income levels (in the economic report, the average American wage slipped $.03 nationally in the month of August) to raise profits at the expense of the American middle class. It is understandable to see cost savings in times of hardship to preserve a greater number of jobs, but for many companies the idea has evolved to squeeze more work out of fewer workers at a lower pay so that the shareholders and top officials see increasing quarterly profits with each quarter. I am going to give one such example that I can express from a personal level to emphasize how irrational corporate cost savings have become:
I have a boyfriend who works for HP.... yes, the computer giant, through HP's acquisition of Ross Perot's company, EDS. In 2008 he saw a significant wage reduction despite making less than 25,000 a year (after 5 years) as a cost saving measure for a company that continued to post well north of 1 billion of profit per quarter. To contrast: the CEO had a compensation package that was over 33 million for fiscal year 2008. It took over 2 years and the ouster of CEO Mike Hurd for the reinstatement of most of the workers' previous wages. However, they have eliminated cost of living increases and moved toward strict 'merit' based increases. While he was one of the handful to merit a wage, most workers in his unit have not seen their wages move from 2007 levels. On an amusing note though, he was one of the few to receive a raise in his recent review when he admits that he was much less willing to go above and beyond on the job than he was prior to the wage decrease. While I never asked him, I have continued to question just how much productivity was reduced amongst his co-workers as a result of those two years. I doubt that their work confidence is returning any time soon.
This is becoming a large problem for many Americans as their wages have stagnated or the jobs they are finding on the market are largely low in compensation as there are many expenses that have increased in the past 4 years. Oil and gasoline remains volatile and rising with every concern on the commodities market. In a market that is turning back toward renting, the demand has raised the cost in many regions for units. Health care costs continue to increase in the vicinity of 10% annually with a greater portion of those costs being placed on workers. None of these things are counted when measuring inflation, meaning that even those who see those elusive cost of living increases are feeling poorer than ever. You can't eat electronics after all.
This is particularly sad given the fact that the American public have never failed to be good consumers of goods. When other countries have had concerns about the populaces saving too much and troublesome to lure out into a consumer economy, we have always been counted on to use our disposable income to the benefit of various businesses and producers. The growth of American wages through much of the 20th century, particularly from the 1950s-1970s, made us prosperous as we used our affluence to not only consume goods and services but to take our wages and invest in our own businesses and further expand the economy. At some point the tide changed and we decided that the average worker was no longer a significant player in the economy and the emphasis turned toward those already at the top of the ladder. We ended up investing in cheaper services and effectively bet against the American people.
Even more troubling is that there will become a point in which labor costs cannot be cut any further and the poor outlook of the worker, which doubles as most of the consumer market, will cause a rapid decrease in profitability that will not be easily rectified. By the time the wages have been cut and the jobs outsourced to India there will be no market left to make use of the services these companies offer. This kind of change can happen rapidly and the loss of the American market would have a devastating effect on the world market as a replacement would be needed for those corporations to continue conducting business. The development of the Indian and Chinese markets, the most likely candidates, are still uneven and the consumer classes in those countries still a small portion of their populations compared to developed countries. Cost cutting by corporations, if not held in check will eventually result in not just the shrinkage of the middle class, but jeopardize their own long term profitability by destroying their own market with 10 and 11 dollar an hour wages. Americans are currently seeing less of their paycheck and forced to re-balance a household budget to fit their dwindling purchasing power.
What needs to happen at this point is for companies to release the trillions of dollars they hold in reserves and to use it to expand the economy. This means not only job creation but readjustment in wages and compensation. The CEOs need to take some sensible risks and develop areas of their companies that have been neglected since the market crash and be willing to bet on better work conditions yielding higher profits. America needs to bet on the middle class and lure them out of their terrified state. Remember: it has never been the consumer who has failed this country. Business has always been a risk and companies have for too long sheltered themselves from any of them. In the long run we would likely see a stronger economic rebound as well as a stabilization of the stock market that has most of these people so spooked as of late.
Sure I don't make hundreds of thousands of dollars as a stockbroker, but sometimes being an outside observer has its benefits.
In the meantime, we need to stop looking to the government for answers on the private sector economic crisis. The interest rates can go no lower and we cannot afford further tax cuts that will, based on previous actions, have a major long term benefit. Sure the government could regulate, probably an action that ought to happen in some sectors, but would then open the perpetual debate of how much the government should intervene. We can't have it both ways by asking the government to make jobs when the private sector is hellbent on self-destructive behaviors. It is time to stop the misguided anger and start asking business why they have lost their faith in us.
The only problem is that there is little the government can do.
Based on all current conditions we should be seeing an uptick in job creation. Even with the tumultuous stock market since the buildup to the debt ceiling increase, stocks have recovered much of the loss endured in 2008 and 2009 with the Dow Jones sitting close to where it was at the start of 2007, which had a rapid ramp up before busting 18 months later. The Fed has kept interest rates and nearly nothing, priming the business sector to invest and expand businesses. Congress has been reluctant to end subsidies for key industries despite the rising debt in fear that it would harm the economy. Private organizations saw record bailouts in 2008 and the states have received money to stimulate local economies. As we all know, corporate tax code is written in such a manner that highly profitable industries and companies pay a pittance of the stated rates. The health care bill has not gone into effect yet save a handful of provisions that are a minuscule impact on the industry. Company profits are up by and large and the private sector is said to be sitting on the largest quantity of cash at hand than any time memorable. Despite the attempts to create favorable conditions for job growth, the private sector has been exceptionally stingy on the matter.
It's easy to try to use President Obama as a scapegoat for such matters even if his impact on economic matters, particularly concerning the private sector, is low. Contrary to what many may believe, the Fed and Congress are most involved in economic policies and can really only attempt to create policies that encourage business production. If companies take those propitious conditions and still refuse to hire, there is little government can do to further entice them. Nor can the government force the banks to loan their money for start-up enterprises. It's a classic case of leading the horse to the trough.
The economic problems lie in the private sector and their continued emphasis on cost saving policies such as outsourcing and wage reductions/hiring at lower income levels (in the economic report, the average American wage slipped $.03 nationally in the month of August) to raise profits at the expense of the American middle class. It is understandable to see cost savings in times of hardship to preserve a greater number of jobs, but for many companies the idea has evolved to squeeze more work out of fewer workers at a lower pay so that the shareholders and top officials see increasing quarterly profits with each quarter. I am going to give one such example that I can express from a personal level to emphasize how irrational corporate cost savings have become:
I have a boyfriend who works for HP.... yes, the computer giant, through HP's acquisition of Ross Perot's company, EDS. In 2008 he saw a significant wage reduction despite making less than 25,000 a year (after 5 years) as a cost saving measure for a company that continued to post well north of 1 billion of profit per quarter. To contrast: the CEO had a compensation package that was over 33 million for fiscal year 2008. It took over 2 years and the ouster of CEO Mike Hurd for the reinstatement of most of the workers' previous wages. However, they have eliminated cost of living increases and moved toward strict 'merit' based increases. While he was one of the handful to merit a wage, most workers in his unit have not seen their wages move from 2007 levels. On an amusing note though, he was one of the few to receive a raise in his recent review when he admits that he was much less willing to go above and beyond on the job than he was prior to the wage decrease. While I never asked him, I have continued to question just how much productivity was reduced amongst his co-workers as a result of those two years. I doubt that their work confidence is returning any time soon.
This is becoming a large problem for many Americans as their wages have stagnated or the jobs they are finding on the market are largely low in compensation as there are many expenses that have increased in the past 4 years. Oil and gasoline remains volatile and rising with every concern on the commodities market. In a market that is turning back toward renting, the demand has raised the cost in many regions for units. Health care costs continue to increase in the vicinity of 10% annually with a greater portion of those costs being placed on workers. None of these things are counted when measuring inflation, meaning that even those who see those elusive cost of living increases are feeling poorer than ever. You can't eat electronics after all.
This is particularly sad given the fact that the American public have never failed to be good consumers of goods. When other countries have had concerns about the populaces saving too much and troublesome to lure out into a consumer economy, we have always been counted on to use our disposable income to the benefit of various businesses and producers. The growth of American wages through much of the 20th century, particularly from the 1950s-1970s, made us prosperous as we used our affluence to not only consume goods and services but to take our wages and invest in our own businesses and further expand the economy. At some point the tide changed and we decided that the average worker was no longer a significant player in the economy and the emphasis turned toward those already at the top of the ladder. We ended up investing in cheaper services and effectively bet against the American people.
Even more troubling is that there will become a point in which labor costs cannot be cut any further and the poor outlook of the worker, which doubles as most of the consumer market, will cause a rapid decrease in profitability that will not be easily rectified. By the time the wages have been cut and the jobs outsourced to India there will be no market left to make use of the services these companies offer. This kind of change can happen rapidly and the loss of the American market would have a devastating effect on the world market as a replacement would be needed for those corporations to continue conducting business. The development of the Indian and Chinese markets, the most likely candidates, are still uneven and the consumer classes in those countries still a small portion of their populations compared to developed countries. Cost cutting by corporations, if not held in check will eventually result in not just the shrinkage of the middle class, but jeopardize their own long term profitability by destroying their own market with 10 and 11 dollar an hour wages. Americans are currently seeing less of their paycheck and forced to re-balance a household budget to fit their dwindling purchasing power.
What needs to happen at this point is for companies to release the trillions of dollars they hold in reserves and to use it to expand the economy. This means not only job creation but readjustment in wages and compensation. The CEOs need to take some sensible risks and develop areas of their companies that have been neglected since the market crash and be willing to bet on better work conditions yielding higher profits. America needs to bet on the middle class and lure them out of their terrified state. Remember: it has never been the consumer who has failed this country. Business has always been a risk and companies have for too long sheltered themselves from any of them. In the long run we would likely see a stronger economic rebound as well as a stabilization of the stock market that has most of these people so spooked as of late.
Sure I don't make hundreds of thousands of dollars as a stockbroker, but sometimes being an outside observer has its benefits.
In the meantime, we need to stop looking to the government for answers on the private sector economic crisis. The interest rates can go no lower and we cannot afford further tax cuts that will, based on previous actions, have a major long term benefit. Sure the government could regulate, probably an action that ought to happen in some sectors, but would then open the perpetual debate of how much the government should intervene. We can't have it both ways by asking the government to make jobs when the private sector is hellbent on self-destructive behaviors. It is time to stop the misguided anger and start asking business why they have lost their faith in us.
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