Republican's lie about Smoot Hawley

[manu1959]

I thought Hoover was one of the Republicans favorite presidents.

hoover is their carter

 

[DiveCon]

I thought Hoover was one of the Republicans favorite presidents.

hoover is their carter

but Carter was still worse than Hoover

 

[Agnapostate]

What's ironic is that perhaps the greatest element in firm structure responsible for unemployment is the fact that a sufficiently high rate of equilibrium unemployment is required to function as a worker discipline device through providing an incentive against shirking. Should the rate of equilibrium unemployment not be sufficiently high, the worker may thus immediately re-obtain a new job, thus undermining the incentive against shirking. The necessary evidence to consult regarding this issue, is, of course, that of Shapiro and Stiglitz in Equilibrium Unemployment as a Worker Discipline Device.

To induce its workers not to shirk, the firm attempts to pay more than the going wage; then, if a worker is caught shirking and is fired, he will pay a penalty. If it pays one firm to raise its wage, however, it will pay all firms to raise their wages. When they all raise their wages, the incentive not to shirk again disappears. But as all firms raise their wages, their demand for labor increases, and unemplyoment results. With unemployment, even if all firms pay the same wages, a worker has an incentive not to shirk. For, if he is fired, an individual will not immediately obtain another job. The equilibrium unemployment rate must be sufficiently high that it pays workers to work rather than to take the risk of being caught shirking.

We can then receive a complementation from the radical literature through analyzing the work of Bowles and Gintis in Credit Market Imperfections and the Incidence of Worker-Owned Firms, thus implying agreement between the orthodox and radical literature. A total synthesis is then achieved through analysis of Spencer's Shirking the Issue? Efficiency wages, work discipline and full employment. Consider the abstract:

This paper assesses recent neoclassical and radical contributions to the analysis of unemployment as a labour disciplinary device, in particular, those of Shapiro & Stiglitz and Bowles & Gintis. These authors share a common set of premises, notably on the conception of the effort decision, that present severe obstacles to the understanding of productivity constraints on full employment. The models of Shapiro & Stiglitz and Bowles & Gintis identify a specific 'asymptote problem' in which the achievement of full employment immediately triggers infinite (and hence unsustainable) wage increases. The premise that workers find work subjectively costly to perform effectively rules out the possibility for full employment. But this view fails to take into account the actual constitution of work motives. To the extent that work effort may be induced independently of dismissal threats, high work intensity may in fact be undermined by high unemployment. By taking work avoidance as given, the labour extraction literature forecloses consideration of the possibilities offered by alternative work organisation for removing unemployment as a worker disciplinary device.

The synthesis provides us with an interesting perspective necessary for cogent analysis of the capitalist firm and surrounding economic structure. Though somewhat of an oversimplification, since involuntary unemployment is obviously a wasted resource, and since it is necessary to discourage shirking in the capitalist firm, a capitalist economy effectively requires external inefficiency as a necessary condition of internal efficiency.

 

[chopcrazy]

Well if you can get someone to do my job in India for $20K and I'm making $40K, then I assume you think I'm being paid "more than I'm worth"?

And that would be true, if it were legal to pit me against the guy in India.

So we need to make it illegal.

Not at all. There could be many reasons why you'd be making more than the person in India. Maybe you're highly efficient, maybe you've been loyal for many years, or any other number of factors. If your boss thinks you're worth what you're being paid then that's great. However, if a union dictates that you have to be paid more than what your employer feels your worth then they may not hire you in the first place, or they may not be able to hire other people.

When unions fought and won higher wages for their employees, do you know that it raised the wages at non union companies?

Factories paying $5 had to raise their pay to compete with what the unions were paying.

So for years and years, companies could have paid more but instead put the money somewhere else. Sometimes they hired more people, sometimes they gave it back to stock holders, sometimes they gave the executives huge bonus'.

But NEVER did they decide on their own to give it to the employees.

So every year Ford made a profit, my dad got profit sharing.

Wouldn't have got that without being in a union.

So you aren't wrong about anything kevin, but at the same time, you aren't right about anything either. IMO.

In other words, this isn't a "I'm right you are wrong" conversation. You just prefer lowering labor's wages for any given reason and I prefer giving labor more.

If given the choice, companies will always opt for paying us less. That's why we have unions.

It would be interesting to see how many non-union manufacturing companies there are that are headed by the children whose parents were in a union. The child of a union worker would/should understand the perspective of a union worker and apply the learning to a company without union workers.

If the reason for good benefits (profit sharing, excellent 401k match, good health coverage) is because of union, then would not non-union companies whose CEO grew in a union household apply union benefits?

 

[editec]

Nemesis reminds us of great reading experiences we've all enjoyed:

The necessary evidence to consult regarding this issue, is, of course, that of Shapiro and Stiglitz in Equilibrium Unemployment as a Worker Discipline Device.

Oh, of course. Good old Shapiro and Stilitz.

I remember back when I used to read that to my son at bedtime.

His favorite line came at the end of the story. You know.. the line that reads

"The equilibrium unemployment rate must be sufficiently high that it pays workers to work rather than to take the risk of being caught shirking...and then they live happily ever after."


Sorry, Nem.

I just couldn't resist taking that goofy shot.

 

[Agnapostate]

Economics discussion in the "economy" forum...novel concept, I know!

It's all right, ed, you do seem to be a tad more informed than the neoliberal Neanderthals around here. I'm off to troll mises.org!

 

[editec]

Economics discussion in the "economy" forum...novel concept, I know!

It's all right, ed, you do seem to be a tad more informed than the neoliberal Neanderthals around here. I'm off to troll mises.org!

They're all Atlases there, dude. They'll just shrug it off.

Some people think you can kill a Misesian by driving a stake blessed by Karl Marx through their shriveled hearts.

I think that's just a myth though.

I don't think they have hearts.

 

[sealybobo]

Not at all. There could be many reasons why you'd be making more than the person in India. Maybe you're highly efficient, maybe you've been loyal for many years, or any other number of factors. If your boss thinks you're worth what you're being paid then that's great. However, if a union dictates that you have to be paid more than what your employer feels your worth then they may not hire you in the first place, or they may not be able to hire other people.

When unions fought and won higher wages for their employees, do you know that it raised the wages at non union companies?

Factories paying $5 had to raise their pay to compete with what the unions were paying.

So for years and years, companies could have paid more but instead put the money somewhere else. Sometimes they hired more people, sometimes they gave it back to stock holders, sometimes they gave the executives huge bonus'.

But NEVER did they decide on their own to give it to the employees.

So every year Ford made a profit, my dad got profit sharing.

Wouldn't have got that without being in a union.

So you aren't wrong about anything kevin, but at the same time, you aren't right about anything either. IMO.

In other words, this isn't a "I'm right you are wrong" conversation. You just prefer lowering labor's wages for any given reason and I prefer giving labor more.

If given the choice, companies will always opt for paying us less. That's why we have unions.

It would be interesting to see how many non-union manufacturing companies there are that are headed by the children whose parents were in a union. The child of a union worker would/should understand the perspective of a union worker and apply the learning to a company without union workers.

If the reason for good benefits (profit sharing, excellent 401k match, good health coverage) is because of union, then would not non-union companies whose CEO grew in a union household apply union benefits?

I'm telling you that non union companies give their non union employees as much as they do because of what the union companies are giving their employees.

If not, all the good employees will go to union companies.

And they can afford to pay, because they don't have to deal with a union.

It is too bad companies have to be forced to be fair.

So to answer your question, no, a guy in a non union company isn't going to pay his employees any better just because his parents were in a union.

Actually, my brother is a VP and because my dad was in a union, he probably is a little more liberal than a vp that grew up in a non union environment.

For example, my brother knew to give domestic partners health insurance. The other vp's at his shop couldn't believe he was being fair to gay people. Imagine that!

 

[chopcrazy]

So to answer your question, no, a guy in a non union company isn't going to pay his employees any better just because his parents were in a union.
.

That must drive you crazy to know that children of union parents do not apply the compensation concepts their parents believed in. As america shifts away from manufacturing to more of service, the kids don't believe in the compensation concepts that were tought them by their parents.

 

[Toro]

I'm not referring to infant industries specifically in the context of the tariff. I'm referring to the general nature of "government intervention" not having the deleterious impacts that you allege, and in fact resulting in long-term utility gains for capitalism, such as the maximization of dynamic comparative advantage in the case of infant industries.

I'm sorry if the bit about infant industries distracted you; the primary focus needed to be centered around deflation in light of that factor's impact on effective tax rates.

I've spent a good deal of time here arguing with conservatives that FDR ended the recession.

This is not a dogmatic argument.

 

[Agnapostate]

I've spent a good deal of time here arguing with conservatives that FDR ended the recession.

This is not a dogmatic argument.

I know that. My point was centered around specific focus on Smoot-Hawley and the necessity of considering deflation as a necessary factor in the effective tariff rate, which I don't believe you sufficiently incorporated into your analysis.

 

[sealybobo]

So to answer your question, no, a guy in a non union company isn't going to pay his employees any better just because his parents were in a union.
.

That must drive you crazy to know that children of union parents do not apply the compensation concepts their parents believed in. As america shifts away from manufacturing to more of service, the kids don't believe in the compensation concepts that were tought them by their parents.

That's just rediculous. If I'm the business owner, I don't care if my dad was in a union. I'm going to try to weasle them down as much as I can. That's why unions are important.

1. Yes, the kids I work with that are right out of college piss me off. They don't care that the company just cut their pay by $15K, because this is still more than they ever made in their lives.

2. And they don't listen. They think they "earned" the health benefits they have now. What they don't realize is that they are being overcharged and their benefits SUCK compared to 10 years ago.

3. I'm not surprised. Corporations and the media's they own have been bashing unions for 30 years now. Unions are lazy, job banks, drunks not getting fired, making $35 hr.

4. And since they aren't in unions themselves, and because they don't know history, they don't care about unions.

And I warned them that as the unions go, so do they, but they didn't listen. So this year they were shocked when the company cut back on their pay/commissions.

They were told that UNIONS are lazy and UNIONS are overpaid. Now they are being told that THEY are being overpaid and they are lazy. Ha ha. That's why they say, "it was ok with me until they came for me, then there was no one left for me to complain to".

When I was a kid, they threatened to send jobs down south. Now, jobs are going from the south to outside the USA. I hope the south doesn't come crying to us when they finally wake up.

Ps. Did you ignore on purpose when I said that my brother is very liberal when it comes to giving workers extra benefits? It is because he grew up in a home with a father who worked for a company that took care of their employees.

PPS. As America moves further away from manufacturing, you see the wages are going down.

Who in a service company deserves $100K a year? No one! Not even the salespeople.

You need to take a class on how important manufacturing is to every country. I don't have the time to explain it to you, but don't expect your kids who work in service industries to be making a fortune.

Soon we will all be servicing each other, but no one has anything to sell. So we are just shuffling around $30K per employee but the big bucks are going to China where everything is being manufactured.

 

[chopcrazy]

So to answer your question, no, a guy in a non union company isn't going to pay his employees any better just because his parents were in a union.
.

That must drive you crazy to know that children of union parents do not apply the compensation concepts their parents believed in. As america shifts away from manufacturing to more of service, the kids don't believe in the compensation concepts that were tought them by their parents.

That's just rediculous. If I'm the business owner, I don't care if my dad was in a union. I'm going to try to weasle them down as much as I can. That's why unions are important.

1. Yes, the kids I work with that are right out of college piss me off. They don't care that the company just cut their pay by $15K, because this is still more than they ever made in their lives.

2. And they don't listen. They think they "earned" the health benefits they have now. What they don't realize is that they are being overcharged and their benefits SUCK compared to 10 years ago.

3. I'm not surprised. Corporations and the media's they own have been bashing unions for 30 years now. Unions are lazy, job banks, drunks not getting fired, making $35 hr.

4. And since they aren't in unions themselves, and because they don't know history, they don't care about unions.

And I warned them that as the unions go, so do they, but they didn't listen. So this year they were shocked when the company cut back on their pay/commissions.

They were told that UNIONS are lazy and UNIONS are overpaid. Now they are being told that THEY are being overpaid and they are lazy. Ha ha. That's why they say, "it was ok with me until they came for me, then there was no one left for me to complain to".

When I was a kid, they threatened to send jobs down south. Now, jobs are going from the south to outside the USA. I hope the south doesn't come crying to us when they finally wake up.

Ps. Did you ignore on purpose when I said that my brother is very liberal when it comes to giving workers extra benefits? It is because he grew up in a home with a father who worked for a company that took care of their employees.

PPS. As America moves further away from manufacturing, you see the wages are going down.

Who in a service company deserves $100K a year? No one! Not even the salespeople.

You need to take a class on how important manufacturing is to every country. I don't have the time to explain it to you, but don't expect your kids who work in service industries to be making a fortune.

Soon we will all be servicing each other, but no one has anything to sell. So we are just shuffling around $30K per employee but the big bucks are going to China where everything is being manufactured.

Your brother learned something, but it appears you did not. You state that if you owned a business you would weasle down the wages of your workers.

I think the stereotype of unions and corporations is misguided. Unions are people and corporations are people. It is the corporation that keeps wages down or unions that keep the lazy from being fired...it is people who have power or want power.

The market and how well you negotiate your pay dictates how much you will get paid. Whether someone deserves a certain wage is a different issue. For instance, If you are only 1 of 5 people in the world that knows/has a specific skill, who has the leverage to set the wage compared with if you are 1 in 1,000,000 people with a skill?

If Joe can bring in 100k more in business than Bob, then obviously Joe should get paid much more than Bob. I agree that the value to the company and the wage people earn is not always equatable.

 

[sealybobo]

Smoot-Hawley was not the cause of The Depression but it certainly exacerbated it.

Where do you stand on this issue today? I bet you have flip flopped on tariffs and you aren't such a free trader anymore are you?

 

[sealybobo]

I love how a 9/11 truther talks about lies and creditability!

Where do you stand today on free trade/nafta? Back then republicans were against tariffs today they elect a guy pushing tariffs.

 

[sealybobo]

Tariffs cause other nations to impose retaliatory tariffs, cause people to pay more for lower quality products, get rid of the incentive to be innovative, and generally make a country poorer.

So why is Trump talking tariffs then and why did you vote for him?

 

[EdwardBaiamonte]

its long-term effect was to bring American jobs back to America.

what good is that if Americans get paid too much, American prices then are higher, and American consumers are poorer thanks to the high prices????

 

[sealybobo]

its long-term effect was to bring American jobs back to America.

what good is that if Americans get paid too much, American prices then are higher, and American consumers are poorer thanks to the high prices????

Let me explain.

Most of those blue collar Americans will spend that money. Give all the profits to the CEOs they sit on it and the gap between rich and poor get wider

Let me tell you how my dad saved $700,000. He made $12 hr but he was right. Healthcare was covered. He also got 10℅ interest on his savings. What do we get today 1℅? And he got a pension.

I don't know how any blue collar people are ever going to do what my dad did. Today everything costs more and people aren't saving, not getting pensions and I hear Republicans are going to save social security by cutting it 30℅

 

[EdwardBaiamonte]

Most of those blue collar Americans will spend that money.

but pay higher prices so no better off

 

[EdwardBaiamonte]

. Give all the profits to the CEOs they sit on it

you learned 45 times now they don't sit on it but rather bank it where it is then invested to grow the economy in a real way.