Instead of guessing.. a small business owner says why not hiring...

[asterism]

Isn't this like saying it isn't racist I have a black friend. The finacial industry was the least regulated under Bush and that caused the crash of the economy. Regulations improve consumer confidence and as a matter of fact regulations have saved many companies as well as the financial industry after the crash of 1929.

How are those increased debit card fees improving consumer confidence? How is the micromanagement of the FDIC closing small banks because they don't fit the big bank model improving consumer confidence?

This game was played in 2002. Sarbanes-Oxley was supposed to fix this and it had vast bi-partisan support. What happened?

 

[Dragon]

True. How much is your cable TV bill? Business is WAY UP for cable TV in this area. That presents an opportunity. Cell phone usage is skyrocketing, another opportunity.

Nonetheless, business overall is not way up. Individual exceptions like this are mainly being cannibalistic, absorbing consumer dollars that would otherwise go to something else. The only way that the economy grows is if consumer demand grows.

There's more to it than that. During the last recession, there was increased demand for less expensive costs. E-commerce exploded then because people could get the same products for less money. That fueled the increased demand for products previously unavailable to most.

No, e-commerce did not explode during the last recession; it exploded during the 1990s boom. But in general, again, growth in individual businesses during bad times comes at the expense of other businesses. It's cannibalistic. The only way the economy grows is if consumer demand grows.

The TV wasn't introduced because the national delivery method had not been developed yet.

Yes it had, or anyway the technology for it had. It wasn't introduced because in order to introduce it people would have needed to buy television sets and not enough people could afford to do that. In the prosperous late 1940s, that ceased to be the case, and television became a big business. At the same time as people were buying huge numbers of TVs, they were also buying huge numbers of new cars, refrigerators, radios, record players, houses, new clothes, etc., etc. Because times were good, wages were up, employment was high, and in general the economy was doing well. Because people WERE buying all those other consumer goods, investors thought this novel product, television, might pay off, and they were right.

None of that describes the 1930s, and that is the reason why TV was not introduced then.

Horseshit. My income doesn't have anything to do with whether my neighbor buys a new plane. His income doesn't have anything to do with whether I buy a new hot tub. Neither of our incomes have anything to do with the homeless guy begging for beer money.

Assuming I make 5 times your salary, how does that affect you?

It's not horseshit, but in order to understand it you need to get away from comparing individuals and think in the aggregate. Also, you need to understand that the income of the richest people in this country (bar a very few of them) comes not from their own work but from the work of others. If you make five times my salary, and your income IS from a salary, that doesn't affect me, especially if we don't work for the same company; however, if I work for you, my salary is a cost against your profits, so if you are making more money by keeping my wages down, obviously that DOES affect me. The reason why incomes have become so lopsided over the past thirty years is because:

1) Growth in real wages has been suppressed. Loss of union power, outsourcing, profiteering by health-insurance providers, all have worked to keep wages low compared to productivity. This has resulted in higher profits for corporations, and more money in the pockets of those whose income derives primarily from investments rather than their own labor.

2) Flattening of the tax system, and lowering taxes on the very rich, has encouraged the very wealthy to play financial shell games with their capital in preference to investing it in genuine production of goods and services. This has further depressed real wages.

All of this has hurt the economy, while providing the owner class with a bigger slice of a smaller pie. It's benefited the 1% at the expense of everyone else. Consumer demand was propped up for a while through easy extension of consumer credit, but obviously that couldn't go on forever and now it's at an end.

The only way to correct the problems in our economy is through a massive redistribution of income. We need to push real wages up. We need to reform the tax system so as to discourage accumulation of huge private fortunes. We need to regulate the banking industry so as to prevent the kind of shell games whose failure triggered the Great Recession. We need to get the percentage of total income taken by the richest 1% down to something like 8 or 9%, instead of 25%. Only then will real prosperity be restored.

 

[Wiseacre]

The decision to hire is a forward looking decision, right? What are the costs of the new hiring vs the anticipated benefits? Certainly in today's environment where demand is tepid at best and not expected to rise very much in the near future, one wouldn't hire anybody new anyway even if they knew what the costs would be cuz they don't know what the additional revenue would be either. Gotta know both, right?

So, we have arrived at the crux of the problem: most don't know what to expect on either side of the equation. You could argue as many have that if demand goes way up then companies will hire regardless of the cost. But that's assuming "way up" will exceed the costs whatever they are, not something easily assumed these days. By most economists' projections, we are not going to see "way up" in demand any time soon, even if Obama's AJA passes, which it won't. More likely, we're looking at continued tepid growth for the next few years, maybe longer.

So - if that's true, why isn't it a good idea to work on the supplay side and lower the costs? Which is what Obama has done with the payroll tax cut, right? Great, except it doesn't appear to be working real well, UE still sucks after he lowered the payroll taxes at the beginning of the year. Why not? Maybe because of the uncertainty the businessman in the OP was saying. Over-regulation is probably a disincentive to hiring, but so are energy costs, healthcare, taxes, etc.

IMHO, demand is not going to substantially pick up until the perceptions and attitudes change in this country. Temporary jobs and temporary payroll tax cuts are just gimmicks designed to make us feel better right now. It's a little like eating a candy bar, you get a nice sugar high but a corresponding low afterwards, and you're further in debt.

If its me, I work the other side of the street. Do tax reform, remove the doubts about what you're going to have to pay the gov't. Kill the deductions and exemptions, no more breaks like for charity and tax sheltered foundations above a certain amount. Then lower the ratesto make this country more attractive to live in and do business.

Then cut the red tape. We gotta have laws and regulations to protect consumers, businesses, and investors from actions that are unfair, illegal, or reduce competition. But we can't be spending a trillion and a half dollars a year on regulatory compliance, that's just insane. Then look at policies about energy and health care what can we do better there?

It very well could be that by taking such actions on the supply side that the demand side picks up because it begins to look like we're finally headed in the right direction. Once you've reduced the cost side of hiring, you might see more employers taking a chance if they have a better idea of the risks, which weve lowered. At that point, maybe demand side policies would have a better chance to succeed than they do now. Like maybe another round of Bush tax cuts? Just kidding, messing with the lib/dems a little bit, I wouldn't advocate a tax cut until the economy is going good and the impact would be minimal.

 

[asterism]

True. How much is your cable TV bill? Business is WAY UP for cable TV in this area. That presents an opportunity. Cell phone usage is skyrocketing, another opportunity.

Nonetheless, business overall is not way up. Individual exceptions like this are mainly being cannibalistic, absorbing consumer dollars that would otherwise go to something else. The only way that the economy grows is if consumer demand grows.

Consumer demand for cable TV is growing! Demand for cellular service is growing too. That's not cannibalistic. It's not a zero sum game.

There's more to it than that. During the last recession, there was increased demand for less expensive costs. E-commerce exploded then because people could get the same products for less money. That fueled the increased demand for products previously unavailable to most.

No, e-commerce did not explode during the last recession; it exploded during the 1990s boom.

You are misinformed.

$8 Billion in 1998, $54 Billion in 2002.


http://www.internetworldstats.com/images/growth2007.png

But in general, again, growth in individual businesses during bad times comes at the expense of other businesses. It's cannibalistic. The only way the economy grows is if consumer demand grows.

Absolute consumer demand, not consumer demand rates. There is still today an escalating demand for consumer products because the population is increasing. It's not cannibalistic to innovate, evolve, and become more efficient.

The TV wasn't introduced because the national delivery method had not been developed yet.

Yes it had, or anyway the technology for it had. It wasn't introduced because in order to introduce it people would have needed to buy television sets and not enough people could afford to do that. In the prosperous late 1940s, that ceased to be the case, and television became a big business. At the same time as people were buying huge numbers of TVs, they were also buying huge numbers of new cars, refrigerators, radios, record players, houses, new clothes, etc., etc. Because times were good, wages were up, employment was high, and in general the economy was doing well. Because people WERE buying all those other consumer goods, investors thought this novel product, television, might pay off, and they were right.

None of that describes the 1930s, and that is the reason why TV was not introduced then.

It appears you aren't aware that the nation experienced a recession in the late 1940s.

Horseshit. My income doesn't have anything to do with whether my neighbor buys a new plane. His income doesn't have anything to do with whether I buy a new hot tub. Neither of our incomes have anything to do with the homeless guy begging for beer money.

Assuming I make 5 times your salary, how does that affect you?

It's not horseshit, but in order to understand it you need to get away from comparing individuals and think in the aggregate. Also, you need to understand that the income of the richest people in this country (bar a very few of them) comes not from their own work but from the work of others. If you make five times my salary, and your income IS from a salary, that doesn't affect me, especially if we don't work for the same company; however, if I work for you, my salary is a cost against your profits, so if you are making more money by keeping my wages down, obviously that DOES affect me.

That's not true. I pay my employees based on the value they contribute to the company and the cost to replace them. I don't make money by keeping someone's wage down. I make money by efficiently utilizing their talents. They make more money for themselves when their activities increase the bottom line of my company and/or their skills are in higher demand at other firms.

Should I pay higher rent just because we're profitable? Should the janitor get a raise just because a customer of mine innovates and grows his company and buys 10 times more product from me?

The reason why incomes have become so lopsided over the past thirty years is because:

1) Growth in real wages has been suppressed. Loss of union power, outsourcing, profiteering by health-insurance providers, all have worked to keep wages low compared to productivity. This has resulted in higher profits for corporations, and more money in the pockets of those whose income derives primarily from investments rather than their own labor.

I disagree. Growth in what is called "real wages" (which is really just median wages for about 60% of the workers from the BLS Establishment surveys) is down because there is lower demand for relatively unskilled labor. It's just not profitable to pay a large number of assembly line workers $75 per hour in wages and benefits when automation and refined procedures allow more efficient manufacturing. The unions are pricing themselves out of the market. Business no longer needs typing pools. Packet switching technology has all but eradicated the need for land microwave communication systems. Wireless is replacing wireline and with it reducing the need for wireline technicians.

2) Flattening of the tax system, and lowering taxes on the very rich, has encouraged the very wealthy to play financial shell games with their capital in preference to investing it in genuine production of goods and services. This has further depressed real wages.

Those games have always been played. The tax system has not been flattened, it has actually become more progressive. The top marginal rates are down but the share of total taxes paid by the upper end has increased dramatically. The former "millionaires tax" known as AMT is not even applicable to millionaires now, it's a middle class albatross.

All of this has hurt the economy, while providing the owner class with a bigger slice of a smaller pie.

A smaller pie? Show me where you get that piece of fiction.

It's benefited the 1% at the expense of everyone else. Consumer demand was propped up for a while through easy extension of consumer credit, but obviously that couldn't go on forever and now it's at an end.

Consumer demand experienced a short spike through that, but also through financial mismanagement by those consumers. Government regulations had a lot to do with it also. Whoever thought it was a good idea to have federal programs to allow people to keep property they couldn't afford have was severely misguided.

The only way to correct the problems in our economy is through a massive redistribution of income.

Using what means? Taxation? Stifling innovation?

What happens to my employees when I'm told I cannot make more money?

We need to push real wages up. We need to reform the tax system so as to discourage accumulation of huge private fortunes. We need to regulate the banking industry so as to prevent the kind of shell games whose failure triggered the Great Recession. We need to get the percentage of total income taken by the richest 1% down to something like 8 or 9%, instead of 25%. Only then will real prosperity be restored.

Wow! When has more government control over the economy ever produced these results? And what is the benefit of overpaying anyone?

 

[rightwinger]

So many "experts" that are not capable of creating jobs, don't care to hear from what people that CAN and DO hire people have to say!
Read here for a small business owner's reasons for NOT hiring!

He doesn't know what his employee costs will be!
"The man in the aisle seat is trying to tell me why he refuses to hire anybody. His business is successful, he says, as the 737 cruises smoothly eastward. Demand for his product is up. But he still won’t hire.
Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”

He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost. "

I don’t understand why Washington does this to us," he resumes. By "us," he means people who run businesses of less- than-Fortune-500 size.

“Invisible,” he says. “I know there are things the government has to do.
But they need to find a way to do them without people like me having to bump into a new regulation every time we turn a corner.”
He reflects for a moment, then finds the analogy he seeks.
“Government should act like my assistant, not my boss.”

Carter: Economic Stagnation Explained, at 30,000 Feet - Bloomberg

Total nonsense

You hire them today. If future government regulations or changes in the business climate make them unprofitable......you let them go

That is the way it has always been done

 

[Dragon]

Consumer demand for cable TV is growing! Demand for cellular service is growing too. That's not cannibalistic. It's not a zero sum game.

Perhaps you didn't understand what I was saying. Demand across the board is not growing, or not growing significantly compared to population growth. That being the case, it IS a zero-sum game. I don't deny that demand for cable TV is growing, but if that's true, then it means that demand for other products is shrinking, as that is the only way growth in demand for cable is compatible with sluggish demand overall.

Absolute consumer demand, not consumer demand rates. There is still today an escalating demand for consumer products because the population is increasing.

Everything really should be normalized for population growth or decline. That's why I like to use growth in per capita GDP as the correct measure rather than growth in aggregate GDP.

It appears you aren't aware that the nation experienced a recession in the late 1940s.

There was one, yes. It was brief and mild. It followed after the immediate postwar boom, and proved an unimportant hiccup in the prosperous decades that followed.

That's not true. I pay my employees based on the value they contribute to the company and the cost to replace them. I don't make money by keeping someone's wage down.

You, by yourself, are not able to keep someone's wages down. This requires collective action and the main culprit is the government, at the behest of big business. Nevertheless, you profit by the fact that wages have been kept down -- except that, if you're a small business owner, most likely the loss of consumer market is hurting you more than low wages are helping.

Should I pay higher rent just because we're profitable? Should the janitor get a raise just because a customer of mine innovates and grows his company and buys 10 times more product from me?

To use a more relevant illustration, if innovations in production methods allow your employees to double productivity per person-hour, then they should have a 100% raise. (Of course, you, by yourself, can't be expected to do this -- your competitors would eat you. It has to be economy-wide.) Otherwise, over the whole economy, buying power will not keep pace with productivity, and we will run into the problem we're experiencing now.

An alternative to a 100% raise would be a 50% price cut -- same thing in effect. Or some mix and match of the two. But what's actually happened is that all or most of the gains have gone to the top. That's unsustainable.

I disagree. Growth in what is called "real wages" (which is really just median wages for about 60% of the workers from the BLS Establishment surveys) is down because there is lower demand for relatively unskilled labor. It's just not profitable to pay a large number of assembly line workers $75 per hour in wages and benefits when automation and refined procedures allow more efficient manufacturing. The unions are pricing themselves out of the market.

Most manufacturing unions are still in place. The reason that unions have declined in strength is because manufacturing jobs have been lost to a combination of automation and outsourcing, and the service jobs that have replaced them have not been unionized, due to hostile government policy that makes it harder to do this.

Unions are not "pricing themselves out of the market." Consider that the wages for outsourced labor in some third-world country typically run ten percent or less of their American counterparts. This is not a wage that Americans can survive on, and there is no way that American workers can compete. The difference between union and non-union wages is trivial by comparison.

There is not less demand for "relatively unskilled labor," because that describes a lot of service work. There is, however, less bargaining power on the part of workers. Manufacturing work used to pay shit, too -- until industry was unionized.

Those games have always been played. The tax system has not been flattened, it has actually become more progressive. The top marginal rates are down but the share of total taxes paid by the upper end has increased dramatically.

The tax system HAS been flattened, and the total share of taxes paid by the upper end has increased ONLY because the total share of the income of the upper end has increased EVEN MORE. The percentage of their income paid by the very rich has gone down, not up, and that, not what percentage of the total tax revenues they pay, is the relevant statistic.

A smaller pie? Show me where you get that piece of fiction.

From 1940 to 1980, real per capita GDP grew at a rate of approximately 4.25% per year. From 1980 to the present, it's grown at a rate of just over 2% per year. If the economy had continued to grow at 4.25% per year, it would now, after thirty years, be 1.5 times as big now as it is, approximately. The pie is smaller because of the policy shift, but the share of it taken by the very wealthy is larger.

Consumer demand experienced a short spike through that, but also through financial mismanagement by those consumers.

Oh, yes, but you're missing the important point here. Why was it necessary for all that credit to be extended to consumers in the first place? Because they weren't being paid enough to buy enough to keep the economy growing WITHOUT borrowing, or by borrowing responsibly (e.g. for big purchases like cars or homes).

The only way to correct the problems in our economy is through a massive redistribution of income.

Using what means? Taxation? Stifling innovation?

What happens to my employees when I'm told I cannot make more money?

Taxes on the rich do not stifle either innovation or investment; that's a myth.

The most effective way to redistribute wealth downward, to answer your question, is by driving wages up. This can be done through a combination of changed government policies to more aggressively enforce labor rights, changes to tax structure and banking regulation to steer investment into productive enterprises instead of financial shell games, and a short term massive government stimulus program to get the ball rolling. That's exactly how the Great Depression was brought to an end and four decades of unprecedented prosperity inaugurated.

Wow! When has more government control over the economy ever produced these results? And what is the benefit of overpaying anyone?

1940-1980, as I said. As for "overpaying" anyone, obviously the contention I'm making is that at present, most people are seriously UNDERpaid. My measure for that is that they aren't being paid enough to generate the consumer demand needed for real prosperity.

 

[LoneLaugher]

The decision to hire is a forward looking decision, right? What are the costs of the new hiring vs the anticipated benefits? Certainly in today's environment where demand is tepid at best and not expected to rise very much in the near future, one wouldn't hire anybody new anyway even if they knew what the costs would be cuz they don't know what the additional revenue would be either. Gotta know both, right?

So, we have arrived at the crux of the problem: most don't know what to expect on either side of the equation. You could argue as many have that if demand goes way up then companies will hire regardless of the cost. But that's assuming "way up" will exceed the costs whatever they are, not something easily assumed these days. By most economists' projections, we are not going to see "way up" in demand any time soon, even if Obama's AJA passes, which it won't. More likely, we're looking at continued tepid growth for the next few years, maybe longer.

So - if that's true, why isn't it a good idea to work on the supplay side and lower the costs? Which is what Obama has done with the payroll tax cut, right? Great, except it doesn't appear to be working real well, UE still sucks after he lowered the payroll taxes at the beginning of the year. Why not? Maybe because of the uncertainty the businessman in the OP was saying. Over-regulation is probably a disincentive to hiring, but so are energy costs, healthcare, taxes, etc.

IMHO, demand is not going to substantially pick up until the perceptions and attitudes change in this country. Temporary jobs and temporary payroll tax cuts are just gimmicks designed to make us feel better right now. It's a little like eating a candy bar, you get a nice sugar high but a corresponding low afterwards, and you're further in debt.

If its me, I work the other side of the street. Do tax reform, remove the doubts about what you're going to have to pay the gov't. Kill the deductions and exemptions, no more breaks like for charity and tax sheltered foundations above a certain amount. Then lower the ratesto make this country more attractive to live in and do business.

Then cut the red tape. We gotta have laws and regulations to protect consumers, businesses, and investors from actions that are unfair, illegal, or reduce competition. But we can't be spending a trillion and a half dollars a year on regulatory compliance, that's just insane. Then look at policies about energy and health care what can we do better there?

It very well could be that by taking such actions on the supply side that the demand side picks up because it begins to look like we're finally headed in the right direction. Once you've reduced the cost side of hiring, you might see more employers taking a chance if they have a better idea of the risks, which weve lowered. At that point, maybe demand side policies would have a better chance to succeed than they do now. Like maybe another round of Bush tax cuts? Just kidding, messing with the lib/dems a little bit, I wouldn't advocate a tax cut until the economy is going good and the impact would be minimal.

Now, here is a guy who makes his case without employing the fiery rhetoric that we have become accustomed to. He should be commended for that.

I am able to agree with just about none of what he said.....but I do appreciate the level-headed manner in which he said it.

regarding the text in bold letters: Are these projections based on a scenerio where no changes are made to current policy? If we were to adopt the proposals that you suggest, would it have a positive effect on demand? Or are you siggesting we do them for some other reason?

 

[Wiseacre]

The decision to hire is a forward looking decision, right? What are the costs of the new hiring vs the anticipated benefits? Certainly in today's environment where demand is tepid at best and not expected to rise very much in the near future, one wouldn't hire anybody new anyway even if they knew what the costs would be cuz they don't know what the additional revenue would be either. Gotta know both, right?

So, we have arrived at the crux of the problem: most don't know what to expect on either side of the equation. You could argue as many have that if demand goes way up then companies will hire regardless of the cost. But that's assuming "way up" will exceed the costs whatever they are, not something easily assumed these days. By most economists' projections, we are not going to see "way up" in demand any time soon, even if Obama's AJA passes, which it won't. More likely, we're looking at continued tepid growth for the next few years, maybe longer.

So - if that's true, why isn't it a good idea to work on the supplay side and lower the costs? Which is what Obama has done with the payroll tax cut, right? Great, except it doesn't appear to be working real well, UE still sucks after he lowered the payroll taxes at the beginning of the year. Why not? Maybe because of the uncertainty the businessman in the OP was saying. Over-regulation is probably a disincentive to hiring, but so are energy costs, healthcare, taxes, etc.

IMHO, demand is not going to substantially pick up until the perceptions and attitudes change in this country. Temporary jobs and temporary payroll tax cuts are just gimmicks designed to make us feel better right now. It's a little like eating a candy bar, you get a nice sugar high but a corresponding low afterwards, and you're further in debt.

If its me, I work the other side of the street. Do tax reform, remove the doubts about what you're going to have to pay the gov't. Kill the deductions and exemptions, no more breaks like for charity and tax sheltered foundations above a certain amount. Then lower the ratesto make this country more attractive to live in and do business.

Then cut the red tape. We gotta have laws and regulations to protect consumers, businesses, and investors from actions that are unfair, illegal, or reduce competition. But we can't be spending a trillion and a half dollars a year on regulatory compliance, that's just insane. Then look at policies about energy and health care what can we do better there?

It very well could be that by taking such actions on the supply side that the demand side picks up because it begins to look like we're finally headed in the right direction. Once you've reduced the cost side of hiring, you might see more employers taking a chance if they have a better idea of the risks, which weve lowered. At that point, maybe demand side policies would have a better chance to succeed than they do now. Like maybe another round of Bush tax cuts? Just kidding, messing with the lib/dems a little bit, I wouldn't advocate a tax cut until the economy is going good and the impact would be minimal.

Now, here is a guy who makes his case without employing the fiery rhetoric that we have become accustomed to. He should be commended for that.

I am able to agree with just about none of what he said.....but I do appreciate the level-headed manner in which he said it.

regarding the text in bold letters: Are these projections based on a scenerio where no changes are made to current policy? If we were to adopt the proposals that you suggest, would it have a positive effect on demand? Or are you siggesting we do them for some other reason?

In my view, tepid growth is highly likely until current policies change, with some possibiity of a double dip sooner or later. The CBO estimates economic growth in 2012 to be around 2.5% I think, which is not all that good and IMHO overly optimistic. They've already downgraded their forecasts already, and I wouldn't be surprised to see them lowered again.

The changes I've discussed don't cost a dime and could very well change the attitudes for the positive. I'd say there's a chance demand could improve as a result, but look it's a two-sided issue isn't it? Whether demand is increased or not, isn't it a good idea to lower the uncertainty on the expense side? Less uncertainty over that may well lead to a little more willingness on the part of employers to hire a few more new people? And BTW, it doesn't cost anything!

 

[LoneLaugher]

The decision to hire is a forward looking decision, right? What are the costs of the new hiring vs the anticipated benefits? Certainly in today's environment where demand is tepid at best and not expected to rise very much in the near future, one wouldn't hire anybody new anyway even if they knew what the costs would be cuz they don't know what the additional revenue would be either. Gotta know both, right?

So, we have arrived at the crux of the problem: most don't know what to expect on either side of the equation. You could argue as many have that if demand goes way up then companies will hire regardless of the cost. But that's assuming "way up" will exceed the costs whatever they are, not something easily assumed these days. By most economists' projections, we are not going to see "way up" in demand any time soon, even if Obama's AJA passes, which it won't. More likely, we're looking at continued tepid growth for the next few years, maybe longer.

So - if that's true, why isn't it a good idea to work on the supplay side and lower the costs? Which is what Obama has done with the payroll tax cut, right? Great, except it doesn't appear to be working real well, UE still sucks after he lowered the payroll taxes at the beginning of the year. Why not? Maybe because of the uncertainty the businessman in the OP was saying. Over-regulation is probably a disincentive to hiring, but so are energy costs, healthcare, taxes, etc.

IMHO, demand is not going to substantially pick up until the perceptions and attitudes change in this country. Temporary jobs and temporary payroll tax cuts are just gimmicks designed to make us feel better right now. It's a little like eating a candy bar, you get a nice sugar high but a corresponding low afterwards, and you're further in debt.

If its me, I work the other side of the street. Do tax reform, remove the doubts about what you're going to have to pay the gov't. Kill the deductions and exemptions, no more breaks like for charity and tax sheltered foundations above a certain amount. Then lower the ratesto make this country more attractive to live in and do business.

Then cut the red tape. We gotta have laws and regulations to protect consumers, businesses, and investors from actions that are unfair, illegal, or reduce competition. But we can't be spending a trillion and a half dollars a year on regulatory compliance, that's just insane. Then look at policies about energy and health care what can we do better there?

It very well could be that by taking such actions on the supply side that the demand side picks up because it begins to look like we're finally headed in the right direction. Once you've reduced the cost side of hiring, you might see more employers taking a chance if they have a better idea of the risks, which weve lowered. At that point, maybe demand side policies would have a better chance to succeed than they do now. Like maybe another round of Bush tax cuts? Just kidding, messing with the lib/dems a little bit, I wouldn't advocate a tax cut until the economy is going good and the impact would be minimal.

Now, here is a guy who makes his case without employing the fiery rhetoric that we have become accustomed to. He should be commended for that.

I am able to agree with just about none of what he said.....but I do appreciate the level-headed manner in which he said it.

regarding the text in bold letters: Are these projections based on a scenerio where no changes are made to current policy? If we were to adopt the proposals that you suggest, would it have a positive effect on demand? Or are you siggesting we do them for some other reason?

In my view, tepid growth is highly likely until current policies change, with some possibiity of a double dip sooner or later. The CBO estimates economic growth in 2012 to be around 2.5% I think, which is not all that good and IMHO overly optimistic. They've already downgraded their forecasts already, and I wouldn't be surprised to see them lowered again.

The changes I've discussed don't cost a dime and could very well change the attitudes for the positive. I'd say there's a chance demand could improve as a result, but look it's a two-sided issue isn't it? Whether demand is increased or not, isn't it a good idea to lower the uncertainty on the expense side? Less uncertainty over that may well lead to a little more willingness on the part of employers to hire a few more new people? And BTW, it doesn't cost anything!

Uncertainty is a trumped up excuse. Sorry.

 

[rightwinger]

Now, here is a guy who makes his case without employing the fiery rhetoric that we have become accustomed to. He should be commended for that.

I am able to agree with just about none of what he said.....but I do appreciate the level-headed manner in which he said it.

regarding the text in bold letters: Are these projections based on a scenerio where no changes are made to current policy? If we were to adopt the proposals that you suggest, would it have a positive effect on demand? Or are you siggesting we do them for some other reason?

In my view, tepid growth is highly likely until current policies change, with some possibiity of a double dip sooner or later. The CBO estimates economic growth in 2012 to be around 2.5% I think, which is not all that good and IMHO overly optimistic. They've already downgraded their forecasts already, and I wouldn't be surprised to see them lowered again.

The changes I've discussed don't cost a dime and could very well change the attitudes for the positive. I'd say there's a chance demand could improve as a result, but look it's a two-sided issue isn't it? Whether demand is increased or not, isn't it a good idea to lower the uncertainty on the expense side? Less uncertainty over that may well lead to a little more willingness on the part of employers to hire a few more new people? And BTW, it doesn't cost anything!

Uncertainty is a trumped up excuse. Sorry.

All businesses deal with uncertainty every day. Uncertainty in the business climate, market share, overseas competition....even the weather

If they did nothing until all uncertainty was resolved, they would get nothing done

 

[Truthseeker420]

Isn't this like saying it isn't racist I have a black friend. The finacial industry was the least regulated under Bush and that caused the crash of the economy. Regulations improve consumer confidence and as a matter of fact regulations have saved many companies as well as the financial industry after the crash of 1929.

How are those increased debit card fees improving consumer confidence? How is the micromanagement of the FDIC closing small banks because they don't fit the big bank model improving consumer confidence?

This game was played in 2002. Sarbanes-Oxley was supposed to fix this and it had vast bi-partisan support. What happened?

what regulation forces banks to raise debit fees and micromanaging to close small banks? and who is doing this miceomanging? small banks clsed because they were left holding the bad mortgage in the mortgage scams by big banks.

 

[Wiseacre]

In my view, tepid growth is highly likely until current policies change, with some possibiity of a double dip sooner or later. The CBO estimates economic growth in 2012 to be around 2.5% I think, which is not all that good and IMHO overly optimistic. They've already downgraded their forecasts already, and I wouldn't be surprised to see them lowered again.

The changes I've discussed don't cost a dime and could very well change the attitudes for the positive. I'd say there's a chance demand could improve as a result, but look it's a two-sided issue isn't it? Whether demand is increased or not, isn't it a good idea to lower the uncertainty on the expense side? Less uncertainty over that may well lead to a little more willingness on the part of employers to hire a few more new people? And BTW, it doesn't cost anything!

Uncertainty is a trumped up excuse. Sorry.

All businesses deal with uncertainty every day. Uncertainty in the business climate, market share, overseas competition....even the weather

If they did nothing until all uncertainty was resolved, they would get nothing done

Well of course, nobody ever gets absolute certainty about anything. But relatively speaking, the uncertainty that most businesses face these days is well above the norm. I am unimpressed thus far with your responses, either one of you.

 

[LoneLaugher]

Uncertainty is a trumped up excuse. Sorry.

All businesses deal with uncertainty every day. Uncertainty in the business climate, market share, overseas competition....even the weather

If they did nothing until all uncertainty was resolved, they would get nothing done

Well of course, nobody ever gets absolute certainty about anything. But relatively speaking, the uncertainty that most businesses face these days is well above the norm. I am unimpressed thus far with your responses, either one of you.

Are you expecting others to impress you?

The uncertainty that businesses face these days is well above the norm? Can you prove that? Really prove it?

 

[asterism]

Consumer demand for cable TV is growing! Demand for cellular service is growing too. That's not cannibalistic. It's not a zero sum game.

Perhaps you didn't understand what I was saying. Demand across the board is not growing, or not growing significantly compared to population growth. That being the case, it IS a zero-sum game. I don't deny that demand for cable TV is growing, but if that's true, then it means that demand for other products is shrinking, as that is the only way growth in demand for cable is compatible with sluggish demand overall.

Absolute consumer demand, not consumer demand rates. There is still today an escalating demand for consumer products because the population is increasing.

Everything really should be normalized for population growth or decline. That's why I like to use growth in per capita GDP as the correct measure rather than growth in aggregate GDP.



There was one, yes. It was brief and mild. It followed after the immediate postwar boom, and proved an unimportant hiccup in the prosperous decades that followed.



You, by yourself, are not able to keep someone's wages down. This requires collective action and the main culprit is the government, at the behest of big business. Nevertheless, you profit by the fact that wages have been kept down -- except that, if you're a small business owner, most likely the loss of consumer market is hurting you more than low wages are helping.



To use a more relevant illustration, if innovations in production methods allow your employees to double productivity per person-hour, then they should have a 100% raise. (Of course, you, by yourself, can't be expected to do this -- your competitors would eat you. It has to be economy-wide.) Otherwise, over the whole economy, buying power will not keep pace with productivity, and we will run into the problem we're experiencing now.

An alternative to a 100% raise would be a 50% price cut -- same thing in effect. Or some mix and match of the two. But what's actually happened is that all or most of the gains have gone to the top. That's unsustainable.



Most manufacturing unions are still in place. The reason that unions have declined in strength is because manufacturing jobs have been lost to a combination of automation and outsourcing, and the service jobs that have replaced them have not been unionized, due to hostile government policy that makes it harder to do this.

Unions are not "pricing themselves out of the market." Consider that the wages for outsourced labor in some third-world country typically run ten percent or less of their American counterparts. This is not a wage that Americans can survive on, and there is no way that American workers can compete. The difference between union and non-union wages is trivial by comparison.

There is not less demand for "relatively unskilled labor," because that describes a lot of service work. There is, however, less bargaining power on the part of workers. Manufacturing work used to pay shit, too -- until industry was unionized.



The tax system HAS been flattened, and the total share of taxes paid by the upper end has increased ONLY because the total share of the income of the upper end has increased EVEN MORE. The percentage of their income paid by the very rich has gone down, not up, and that, not what percentage of the total tax revenues they pay, is the relevant statistic.



From 1940 to 1980, real per capita GDP grew at a rate of approximately 4.25% per year. From 1980 to the present, it's grown at a rate of just over 2% per year. If the economy had continued to grow at 4.25% per year, it would now, after thirty years, be 1.5 times as big now as it is, approximately. The pie is smaller because of the policy shift, but the share of it taken by the very wealthy is larger.



Oh, yes, but you're missing the important point here. Why was it necessary for all that credit to be extended to consumers in the first place? Because they weren't being paid enough to buy enough to keep the economy growing WITHOUT borrowing, or by borrowing responsibly (e.g. for big purchases like cars or homes).

Using what means? Taxation? Stifling innovation?

What happens to my employees when I'm told I cannot make more money?

Taxes on the rich do not stifle either innovation or investment; that's a myth.

The most effective way to redistribute wealth downward, to answer your question, is by driving wages up. This can be done through a combination of changed government policies to more aggressively enforce labor rights, changes to tax structure and banking regulation to steer investment into productive enterprises instead of financial shell games, and a short term massive government stimulus program to get the ball rolling. That's exactly how the Great Depression was brought to an end and four decades of unprecedented prosperity inaugurated.

Wow! When has more government control over the economy ever produced these results? And what is the benefit of overpaying anyone?

1940-1980, as I said. As for "overpaying" anyone, obviously the contention I'm making is that at present, most people are seriously UNDERpaid. My measure for that is that they aren't being paid enough to generate the consumer demand needed for real prosperity.

I appreciate the civil disagreement here.

I disagree that growing overall demand but shrinking demand relative to the population growth means that it is a zero sum game. There are more people who need to eat therefore more food is produced. More resources are used to produce that food, more resources are either tapped or created. More wealth is created, which is then distributed throughout the economy by the means of commerce. It is incorrect to analyze demand based solely on a per-capita basis simply because the aggregate is indeed growing. Per-capita analysis is useful in predicting future trends, but those predictions are always then made on the increasing aggregate.

I disagree that employees deserve a raise just because innovations done by someone other than them increase profits. A truck driver is paid by the mile according to market conditions. He is not paid relative to the value of the cargo he is hauling. As you state, the outcome is a price cut and that has happened. Long distance fees have gone through the floor. The average size of a new house has doubled. Food choices have expanded. Fresh fruit and vegetables are no longer dictated by the season. Microchips cost pennies now. Also, worker compensation has increased. The issue is that they haven't increased as much as those on the upper end recently. However, they have not taken the same risks and have not kept up with innovation.

More tomorrow, I've got to head out for the evening.

 

[rightwinger]

Uncertainty is a trumped up excuse. Sorry.

All businesses deal with uncertainty every day. Uncertainty in the business climate, market share, overseas competition....even the weather

If they did nothing until all uncertainty was resolved, they would get nothing done

Well of course, nobody ever gets absolute certainty about anything. But relatively speaking, the uncertainty that most businesses face these days is well above the norm. I am unimpressed thus far with your responses, either one of you.

Unimpressed? Oh my....we will just have to try harder then

Maybe you can impress us by explaining why uncertainty is now above the norm and why potential government regulations are the leading cause of uncertainty

 

[Wiseacre]

All businesses deal with uncertainty every day. Uncertainty in the business climate, market share, overseas competition....even the weather

If they did nothing until all uncertainty was resolved, they would get nothing done

Well of course, nobody ever gets absolute certainty about anything. But relatively speaking, the uncertainty that most businesses face these days is well above the norm. I am unimpressed thus far with your responses, either one of you.

Are you expecting others to impress you?

The uncertainty that businesses face these days is well above the norm? Can you prove that? Really prove it?

Expecting? Absolutely not. Really prove the level of uncertainty? I'm sure you realize that is impossible. I suspect most people would agree with me though. Do you mean to imply that the level of uncertainty today is about what it usually is? LOL, got any proof?

 

[LoneLaugher]

Well of course, nobody ever gets absolute certainty about anything. But relatively speaking, the uncertainty that most businesses face these days is well above the norm. I am unimpressed thus far with your responses, either one of you.

Are you expecting others to impress you?

The uncertainty that businesses face these days is well above the norm? Can you prove that? Really prove it?

Expecting? Absolutely not. Really prove the level of uncertainty? I'm sure you realize that is impossible. I suspect most people would agree with me though. Do you mean to imply that the level of uncertainty today is about what it usually is? LOL, got any proof?

I'm sorry. You made a claim. I asked you to prove it. You said that it is not possible. Then you said that you suspect most people agree with you. Can you prove that?

I haven't made any claims about the degree of uncertainty. I have said that uncertainty is being used as an excuse. You have just asked me to prove something that aren't even certain that I implied.

When are you going to begin to impress me?

 

[JoeB131]

This guy sucks at management. While I am only responsible for a small $11M annual service business, I hire people to serve my customers. If I don't. My customers will go elsewhere. Period.

Not really. He's probably doing what my employer did after they let 20 people go last week. Just work everyone they have a little harder. And in this economy, they are looking at the guys who just got let go and were glad it wasn't them.

 

[healthmyths]

you wrote"The finacial industry was the least regulated under Bush and that caused the crash of the economy. "
A) it's the "financial" OK?
B) 1995 Redlining suits instigated by ACORN FORCED banks to make loans to unqualified people who would later default.
C) FDIC auditors examining loans warned lenders and Lenders "sold" bad loans to Fannie/Freddie!
D) FANNIE/Freddie had in the words of the
Oct. 23,2008 (Bloomberg) --Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the"full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart said after the hearing. That does give them effectively a guarantee of the U.S. government.''
Lockhart's Fannie, Freddie Guarantee Remarks Stir Up Confusion - Bloomberg
E) Therefore investors bought securitized bad loans KNOWING "U.S. guarantees!
All because Democrats refused :
* House Financial Services Committee Chairman Barney Frank (D-MA) criticized the President's warning saying: "these two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis ... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae," New York Times, 9/11/03)
* Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. (Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism," New York Times, 8/11/07)
Those are the FACTS.
But since when do Demo/Liberal/progressive/Obamatrons pay any attention to FACTS?

 

[Gadawg73]

you wrote"The finacial industry was the least regulated under Bush and that caused the crash of the economy. "
A) it's the "financial" OK?
B) 1995 Redlining suits instigated by ACORN FORCED banks to make loans to unqualified people who would later default.
C) FDIC auditors examining loans warned lenders and Lenders "sold" bad loans to Fannie/Freddie!
D) FANNIE/Freddie had in the words of the
Oct. 23,2008 (Bloomberg) --Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the"full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart said after the hearing. That does give them effectively a guarantee of the U.S. government.''
Lockhart's Fannie, Freddie Guarantee Remarks Stir Up Confusion - Bloomberg
E) Therefore investors bought securitized bad loans KNOWING "U.S. guarantees!
All because Democrats refused :
* House Financial Services Committee Chairman Barney Frank (D-MA) criticized the President's warning saying: "these two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis ... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae," New York Times, 9/11/03)
* Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. (Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism," New York Times, 8/11/07)
Those are the FACTS.
But since when do Demo/Liberal/progressive/Obamatrons pay any attention to FACTS?

If we assume all of what you post is true who forced one American to sign a loan document that they could not afford to pay for?
Where is that one person in America that was forced to get a mortgage on their home that they could not afford?
We preach personal responsibility all the time but when something goes wrong EVERYONE finds someone to blame. We have become a nation of sad sack whiny unaccountable bitches. "It was Fannie and Freddie's fault".
Bull shit.
The entire meltdown WAS OUR FAULT, not the governments fault.