OT: does obama bring change?

[Reverend Tap]

Obama will set all new records for the national debt and budget deficits. Mark my words.

They are marked. When's your cut-off point for determining whether or not it comes to pass?


Also, and this is open-ended to everyone, clarify something for me. Economics isn't my forte, so apologies if I'm just completely misunderstanding. You talk about government being unable to spend its way out of recession, that instead the taxpayers should get a break/refund so as to stimulate the economy, buying big-ticket items (new cars) and whatnot. But what, exactly, is the difference between the two in economic terms? For the sake of discussion, let's reduce the numbers involved and say you've got a country with 1 million people and the government collects $10 in taxes from each to pay for an attempt at spending its way out of recession. That's the government spending $10 million in the private sector. Now, say that government instead decides to refund everyone that $10, and for the sake of argument, let's say that everyone who gets that back spends it rather than putting it in savings or whatnot. That's the populace spending the same $10 million in the same private sector. Where's the difference? Is it just the assumption that the population will make better, more economically-stimulating purchasing choices than the government? I sure as he|| wouldn't; any tax refunds I get in the near future are either going in my savings account or going to pay for small-item necessities that I'd be buying anyway. That may just be me, though. Now, of course I'm not asking about the money that's just being handed to failing businesses; I know all about what's wrong with that. But for things like public-works projects that are bigger-ticket purchases than any of us could make normally, where exactly does the problem lie?

[1bad65]

Dude, O'Neil lasted less than a year and was out in late 2002. And his predictions were wrong anyway.

He basically got fired, he was just allowed to resign. I've seen it happen alot myself.

[1bad65]

Well, of course.....What do you expect? The union bends over backwards to help GM during the bad times by taking massive concessions but during the good times they are not allowed to share in the prosperity? It's a double edged sword.

The unions are the main reason they got in trouble in the first place!

When you force your employer to pay a HS grad ~$75/hr to install plastic dashboards, you're killing his ability to make a profit.

[BoulderDawg]

As far as the economy goes:

Bush did the same thing as Madoff.

It all comes back to Bush. As soon as paygo expired the guy just went nuts with spending. The biggest thing was his passage on Medicare D. This helped seniors pay for prescription medicine but more than that it helped drug companies make billions. Had Bush been under paygo he would have never had the funds to pass and pay for Medicare D.

All in all to pay for his massive Medicare D (The drug company bailout) and the uncontrolled, unsupervised, unaudited spending on the "War on terror" he had to borrow.

In all reality Bush did exactly what Madoff is in jail for today. He had cut taxes so he had to continue to borrow money to service the debt already out there.

Jesus what a mess that man made.

[BoulderDawg]

The unions are the main reason they got in trouble in the first place!

When you force your employer to pay a HS grad ~$75/hr to install plastic dashboards, you're killing his ability to make a profit.

Where's your back up on the $75 dollars an hour? I would be willing to bet that that most of the rank and file blue collar workers would be very surprised to learn they are making 156K a year!

[BoulderDawg]

The unions are the main reason they got in trouble in the first place!

When you force your employer to pay a HS grad ~$75/hr to install plastic dashboards, you're killing his ability to make a profit.

Also, you speak from ignorance. Neither the car company or the Union would negoiate a contract that would not allow a profit.

[1bad65]

They are marked. When's your cut-off point for determining whether or not it comes to pass?

I'll give him his 4 years. Let's see what the deficit and national debt is in Jan 2013.


Your next questions I'll try and answer and keep it short:

First off, anything that both the private sector and government do, the private sector always does it cheaper and more efficiently. A perfect example is to compare the US Postal Service to FedEx and UPS. USPS posts huge operating losses every year (and the postmaster just got a huge AIG-type bonus), while the 2 private companies make huge profits.

Also, when the government spends anything, it's money that comes from the people. So taking more of the people's money to create jobs for the people is flat-out retarded. Tax cuts allow for people and business to have more expendable/disposable money. When people have it, they do buy stuff. Whether it's big ticket items like cars or houses, or just spending more on entertainment, it stimulates the economy. Thus there is more demand for products and services. Now at the same time businesses have more money AND they are seeing consumer demand increase. So they ramp-up, they expand operations to increase supply. That comes in the form of hiring more people and/or expanding to more locations/stores/etc to meet the demand. It's a perfect system.

As to taxes, you have to first accept that our economy is NOT a 'zero sum game'. By that I mean that wealth can not only be lost, but it can be created as well. So, if you cut the percentage people and business pay, but the pool of employees goes up and the money businesses make go up, the government will actually take in MORE money. This is exactly what happened in the 1980s. Even though tax rates went down, the tax revenues increased. CBO numbers will back me up on this.

Does this make sense to you?

[1bad65]

Where's your back up on the $75 dollars an hour? I would be willing to bet that that most of the rank and file blue collar workers would be very surprised to learn they are making 156K a year!

Counting salary and benefits, this is what they earn.

Feel free to look it up.

Or do I have to AGAIN provide several links so you can dismiss them as "Neo blogs"?

[1bad65]

Also, you speak from ignorance. Neither the car company or the Union would negoiate a contract that would not allow a profit.

The union only cares about the union. And until GM had to stand up to them or face bankruptcy, the union had them by the balls.

Notice the union gave up these benefits that they said for years were 'fair' and 'just'.

[BoulderDawg]

Counting salary and benefits, this is what they earn.

Feel free to look it up.

Or do I have to AGAIN provide several links so you can dismiss them as "Neo blogs"?

That's not what you wrote. You said they were paid $75 an hour.

Leave it to a neo to play fast and loose with the numbers to make them look good.

[Reverend Tap]

Where's your back up on the $75 dollars an hour? I would be willing to bet that that most of the rank and file blue collar workers would be very surprised to learn they are making 156K a year!

Assembly Line by Jonathan Cohn
Debunking the myth of the $70-per-hour autoworker.
Post Date Friday, November 21, 2008

If you've been following the auto industry's crisis, then you've probably read or heard a lot about overpaid American autoworkers--in particular, the fact that the average hourly employee of the Big Three makes $70 per hour.

That's an awful lot of money. Seventy dollars an hour in wages works out to almost $150,000 a year in gross income, if you assume a forty-hour work week. Is it any wonder the Big Three are in trouble? And with auto workers making so much, why should taxpayers--many of whom make far less--finance a plan to bail them out?

Well, here's one reason: The figure is wildly misleading.

Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research--who was my primary source for the figures you are about to read--average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.

More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.

So the "wage gap," per se, has been a lot smaller than you've heard. And this is no accident. If the transplants paid their employees far less than what the Big Three pay their unionized workers, the United Auto Workers would have a much better shot of organizing the transplants' factories. Those factories remain non-unionized and management very much wants to keep it that way.

But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people. One of the few people to grasp this was Portfolio.com's Felix Salmon. As he noted yesterday, the claim that workers are getting $70 an hour in compensation is just "not true."

Of course, the cost of benefits for those retirees--you may have heard people refer to them as "legacy costs"--do represent an extra cost burden that only the Big Three shoulder. And, yes, it makes it difficult for the Big Three to compete with foreign-owned automakers that don't have to pay the same costs. But don't forget why those costs are so high. While the transplants don't offer the same kind of benefits that the Big Three do, the main reason for their present cost advantage is that they just don't have many retirees.

The first foreign-owned plants didn't start up here until the 1980s; many of the existing ones came well after that. As of a year ago, Toyota's entire U.S. operation had less than 1,000 retirees. Compare that to a company like General Motors, which has been around for more than a century and which supports literally hundreds of thousands of former workers and spouses. As you might expect, many of these have the sorts of advanced medical problems you expect from people to develop in old age. And, it should go without saying, those conditions cost a ton of money to treat.

To be sure, we've known about these demographics for a while. Management and labor in Detroit should have figured out a solution it long ago. But while the Big Three were late in addressing this problem, they did address it eventually.

Notice how, in this article, I've constantly referred to 2007 figures? There's a good reason. In 2007, the Big Three signed a breakthrough contract with the United Auto Workers (UAW) designed, once and for all, to eliminate the compensation gap between domestic and foreign automakers in the U.S.

The agreement sought to do so, first, by creating a private trust for financing future retiree benefits--effectively removing that burden from the companies' books. The auto companies agreed to deposit start-up money in the fund; after that, however, it would be up to the unions to manage the money. And it was widely understood that, given the realities of investment returns and health care economics, over time retiree health benefits would likely become less generous.

In addition, management and labor agreed to change health benefits for all workers, active or retired, so that the coverage looked more like the policies most people have today, complete with co-payments and deductibles. The new UAW agreement also changed the salary structure, by creating a two-tiered wage system. Under this new arrangement, the salary scale for newly hired workers would be lower than the salary scale for existing workers.

One can debate the propriety and wisdom of these steps; two-tiered wage structures, in particular, raise various ethical concerns. But one thing is certain: It was a radical change that promised to make Detroit far more competitive. If carried out as planned, by 2010--the final year of this existing contract--total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory. The only problem is that it will be several years before these gains show up on the bottom line--years the industry probably won't have if it doesn't get financial assistance from the government.

Make no mistake: The argument over a proposed rescue package is complicated, in no small part because over the years both management and labor made some truly awful decisions while postponing the inevitable reckoning with economic reality. And even if the government does provide money, it's a tough call whether restructuring should proceed with or without a formal bankruptcy filing. Either way, yet more downsizing is inevitable.

But the next time you hear somebody say the unions have to make serious salary and benefit concessions, keep in mind that they already have--enough to keep the companies competitive, if only they can survive this crisis.

Jonathan Cohn is a senior editor at The New Republic.
Source

[GLW]

So, bad brings up that already disproven $75/hour number...

http://www.factcheck.org/askfactchec...more_than.html

The he comes with

"I'll give him his 4 years."

Actually, the voters in the US GAVE him his 4 years and it had nothing to do with 1Bad - and unless he is talking about a military coup (high treason by the way) or some other violent means of preventing any current administration from working its full term in office, he is not GIVING anything...and actually has no choice about it at all... so - as the Neocon repugs stated 8 years ago:

"You lost the election, the other guy is the president now, deal with it..."

[BoulderDawg]

The union only cares about the union. And until GM had to stand up to them or face bankruptcy, the union had them by the balls.

Notice the union gave up these benefits that they said for years were 'fair' and 'just'.

The union is not responsible for bad business decisions made by management. The contracts were negoiated in good faith. It's not the unions fault greedy management ran the company into the ground.

I think management should be down on their hands and knees thanking the union for making concessions. They were under no obligation to do so.

[Reverend Tap]

First off, anything that both the private sector and government do, the private sector always does it cheaper and more efficiently. A perfect example is to compare the US Postal Service to FedEx and UPS. USPS posts huge operating losses every year (and the postmaster just got a huge AIG-type bonus), while the 2 private companies make huge profits.

While I have my own concerns with how government agencies are run, the fact that they don't post profits isn't one of them; that's not their function, after all. While I can agree with you that generally business and government should not be involved in doing the same things, my reasoning has nothing to do with "inefficiency," and everything to do with the fact that the two are designed for different purposes. A business's purpose is simply to make profits by exchanging goods or services for payment, whereas a government program's purpose (when we're talking about public services) is to provide a more-or-less necessary service to all applicable people, full stop. As such, I think it's rather disingenuous to compare the two on business's terms; I could very easily reverse the argument, after all, and talk about how badly business does at providing public services to all regardless of income level.

Also, when the government spends anything, it's money that comes from the people. So taking more of the people's money to create jobs for the people is flat-out retarded. Tax cuts allow for people and business to have more expendable/disposable money. When people have it, they do buy stuff. Whether it's big ticket items like cars or houses, or just spending more on entertainment, it stimulates the economy. Thus there is more demand for products and services. Now at the same time businesses have more money AND they are seeing consumer demand increase. So they ramp-up, they expand operations to increase supply. That comes in the form of hiring more people and/or expanding to more locations/stores/etc to meet the demand. It's a perfect system.

I am aware of both the argument for lowering taxes and the fundamentals of supply and demand. Neither of these relate to the question I posed, which is simply to ask where the fundamental difference lies when the government is the purchaser rather than the populace, using the same money.

As to taxes, you have to first accept that our economy is NOT a 'zero sum game'. By that I mean that wealth can not only be lost, but it can be created as well. So, if you cut the percentage people and business pay, but the pool of employees goes up and the money businesses make go up, the government will actually take in MORE money. This is exactly what happened in the 1980s. Even though tax rates went down, the tax revenues increased. CBO numbers will back me up on this.

Does this make sense to you?

It does, but it's still not answering the question I posed. You're discussing the benefits of going about it in one way (lowering taxes) while the question I asked was basically what the problem is with doing it the other way (government spending).

[Reverend Tap]

The union only cares about the union. And until GM had to stand up to them or face bankruptcy, the union had them by the balls.

Notice the union gave up these benefits that they said for years were 'fair' and 'just'.

The union should only care about the union (meaning both the organization itself and the rank-and-file workers who constitute it). That's kind of their job, as the actual purpose for which they exist is an adversarial one with the management of the companies in question.

Of course, if the companies go under, that doesn't help the union at all. But neglecting to look to the long-term is hardly something anyone can claim isn't a problem in the business community as well.