OT - NY Times economy article

Here he may be talking about regulatory issues as well, John. It is *certainly* true that large corporations that contribute mightily to politicians' campaign funds *do* get preferential treatment when the laws get written.
One simple example that I've trotted out time and time again is the law that used to require businesses who pay employees by check to allow those paychecks to be cashed without fee, within a certain distance of the workplace, or the wages would have to be paid in cash.
The banking industry got alhold of that and crushed it, so now if a worker wants to actually cash his check, he has to pay a fee, one that ranges between one and ten dollars, typically.
Sure every joe has a bit in the stock market now (except me I guess) but if you are really trying to convince anyone here that just because somebody owns $10K in some mutual fund, that this puts them on an even footing with, say, Exxon-Mobil or Halliburton, I think this is not going to work.
Jim
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Reply to
jim rozen
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Your credibility is gone right there.
Although there are
If you had any credibility left, it's gone now.
The subsidy issue also comes up in the USA:
What whacko newspaper have you been reading?
Another example are the huge sums of money given to
Not since 1865.
This varies from
You my man, are a nut.
JTMcC.
Reply to
John T. McCracken
I just had to add a quick ramble here....
When 5% of the people hold 90% of the wealth in this country, most business essentially operates to serve the interests of that 5%, not the other 90%.
I disagree, business operates to satisfy the stockholder, and today, in the U.S., that is every working stiff with a 401K or mutual fund investment, plus a lot of small busnessmen who have their pension plan invested at least partially in stocks and bonds. The 1960's idea that only the idle rich care about stock prices is long gone, the man on the street is just as likely to check his investments as the tycoon.
I guess I presented it wrong. You are correct that there is broad stock ownership withn this country. However, by the dollar value the majority of this ownership is held in the hands of a small percentage of people. A simple analogy is, as a machineing business, you tend to serve your large customer with more care and interest than your small customer. most people imply that they are treated the same however, if time was important, who's order would be put off and who's would get the priority?
I don't buy your comparison of stockholders to large or small customers, ALL stockholders want the same thing, returns. To think a business decides to serve it's wealthy stockholders, while screwing the small stockholders, is crazy.
With respect to the pension plans, they do hold a great deal of the stock in this country. It's a bigger picture than that though. The fact that most companies can borrow and use the pension plan that is supposed to service the employees as colatoral for that loan..or borrow the money from the pension funds directly...shows that these have very little impact on decision making.
How does using a pension plan as colatoral threaten you, me or anyone??? Give us one single instance where retirees went unpaid.
The result is that the overall goal is to result in "short term" profitability rather than overall business strength.
I disagree again, you assume that a small cadre of ultra rich are running the country to suite their fancy. The facts are that those running business today answer to almost the entire spectrum of American society, look at the Enron executives either doing time or about to do time, in prison. This should reafirm your flagging belief in the free market system as practiced in America. I was not implying that the ultra rich "control" things, just that the focus of the government and it's policies tend to be toward the production of "wealth" and those who have it. It's no different than the example above where the large customer gets priority over the small customer. I imply absolutely no "conspiricy" theory or anything else to this. Simply that becasue most of our officials come from backgrounds of money, they tend to foster a system that revolves around this. An example of this from another sector would be management of schools. Most of the people in school management positions come from the education field. The result is an inertia to keep things running the same...rarely a new idea introduced to improve education (more money for teacher's and smaller class size...how long have you been hearing that repeated?)
example of this is the HUGE focus of the governmental policies to try and and keep stock prices going up. This also puts o focus on CEOs to artificially inflate those prices through layoffs, cost cutting measures, etc which cause huge short-term profits at the expense of any long term company strength. A good example of this is US steel dumping all their fabricated product divisions in the early 80s.
Your example of what is wrong with corperate America come from the 1980"s! Are you kidding! A lot of things are done wrong in every decade, that is the human element, but to try to buttress your arguement with examples from 20 years ago is simply irrelevant.
I used that example because it was close to home and I participated in the closure and saw the actual accounting figures for it. Rather than just repeat something someone else had presented in a news article, I went with something I had first hand knowledge of.
Those divisions were making profits for the company (small and consistent) but when the overall stock price was falling, they dumped all fabricated products and re-worked the accounting system to make it look like cost savings and bolster the stock price.
That was their perogative, if it was the wrong decision, they would be punished by the market, again 20 year old examples are obsolete when talking about the big business climate of 2003, soon to be 2004. Of course it was their perogative. I am not speaking of taking away freedom to run your business as you want...I own a business myself. What I am speaking of is an entrenched business focus that emphasizes short term profitability and discourages long term investment. How many accounts in US businesses sign off on capital purchases for equipment that pay off in a period of more than 2 or three years? It is rare these days, with the exception of construction of new facilities, to see investments with longer pay-offs.
One should also take note that "increase in worker productivity" is seen as a GOOD thing in all the government reports. Yes, slight increases in productivity are good but for most workers, this figure means they are working harder and longer for the same money. How many of you can say that you are paid more and work less than 20 years ago?
I most definitly can, 20 years ago I was making a fraction of what I make today.
I'm glad. The DOL statistics for pay schedules shows that the amount of hours worked by most US workers is increasing and that pay is not increasing as quickly as cost of living for most.
Can you even say that you are paid more and work about has hard as 20 years ago?
Of course I can.
As long as the government operates in a mode where decisions are made with such a high focus on "short term profitability", as they currently do for that 5% who hold the 90% wealth, we will always be weak and nationally insecure.
I am, and I believe WE are, neither. Keep your weakness and insecurity to your self, I am, and those I befriend and associate with, are NOT weak, and NOT insecure. I feel sorry for anyone that, living in the most freedom loving country in the world, the country with the greatest amount of opportunity ever available on the face of the earth, that finds their predicament so depressing, you my man would have been eaten alive in the middle ages, you would have never survived on the plains in the 1880's, and you probably only survive (to whine) due to government assistance in the year 2003.
JTMcC.
Strength comes not from the size of your armament,
Where in the world did I refer to armament???
but from the desire of the people to protect their way of life. With eroding standards of living,
I see no decline in standard of living, I see people with more of everything and the highest standard of living in the history of the world.
a general perception that the government is not working for the individual
I don't want the guverment to work for me, I want them to do what they are constitutionally mandated to do, and get out of my way.
, declining education, declining access to health care
Who, pray tell, in the U.S. is going without health care? Go to your local hospital emergency room, you will see a steady stream of welfare cases using the ER as their own personal doctor, for everything from minor scrapes to cold symptoms.
, etc, we risk declining security.
We risk declining security when we elect politicians more concerned with those sniveling that they just can't make it in the most prosperous land ever on earth, than they are with those enemies that plot and plan to destroy us. JTMcC.
Koz (and yes it is a ramble, no it isn't suggestion communism or government screwing business, just changing the focus to a broader position of strength rather than a short-term position of maximizing profits)
jim rozen wrote:
Today the business section of the NY Times had two interesting articles. One was entitled: "Wall Street Shaken by US Job Losses in August" and the other was front page, "Drop in Jobs is Continuing: 93,000 Lost Last Month."
Excerpt from the first:
.... yesterday the labor department reported that while the unemployment rate slipped to 6.1% in August, companies cut payrolls by 93,000. The report was weaker than expected and delivered mixed signals about the nation's overall economic health. Wall Street was expecting jobs to increase 20,000 to 25,000, Mr. Hogan [chief market analyst at Jeffries and Company] said.
"We are concerned about the jobs-creation part of the economy," Mr. Hogan said.
The second article is highly remiscent of the discussions that went on here on rcm in the past few months, here I quote from that article:
... What suprises many economists is that the job-shedding has continued despite what they describe as an extraordinary level of economic stimulus. Low interest rates, tax cuts and rebates, a rise in military spending, mortgage refinancings, growing corporate profits, even a long-awaited improvement in business spending on new equipment and software have all all contributed to the rise in the economic growth rate.
But jobs are disappearing, and employers continue to resist adding hours for their existing workers. Economists warn that without payroll expansion and rising income from wages, sustaining the economic growth will be difficult once the stimulus weakens.
"If we go into next year without job growth, then the consumer's willingness to keep spending comes into question, and recovery is in danger of unwinding," said James W Paulsen, chief investment strategist for Wells Capital Management.
Seeking an explaination for the job drought, some economists call attention to the shifting of production overseas, particulary to China, and to the american economy's rapid gains in productivity. The productivity gains allow companies to maintain the same level of production with fewer workers.
Both trends have proceeded at a stepped-up pace in recent months so the economy, in response, may now have to expand at an annual rate of 5 percent or more, simply to keep employment levels stable, said Albert M. Wojnilower, economic consultant and wall street forecaster. ....
The article also mentioned that about half of the 93 thousand jobs lost were in the manufacturing areas.
Frankly it sounds to me like the company's dreams of increased profit by shifting production overseas where labor rates are very low is already showing signs of failure. My bet is that the management in firms like that is driven by the pure and simple desire to temporarily boost profits, so that they can line their own pockets before the rent comes due. Yep, plain old greed.
The problem that nobody anticipated is, the feedback time constant is way, way too far short for this to work. To boost their profits, they need to lay off american workers. Sure the workers have some savings, but once you lay off the worker, they stop buying - instantly, and almost completely.
Which leaves no market for the goods that the companies are trying to peddle. A lot of this stuff is about perception, all a person needs to hear is that their friend has just been laid off, and he thinks, "that could be me. I better start tightening the belt now before it's too late."
Somebody has to knock these idiots' heads together and holler in their ears, that NOBODY BUYS ANYTHING WHEN THEY HAVE NO JOB. This seems simple but they just ain't 'getting it.'
How much do folks want to be that the next big export overseas to china is going to be those executives themselves, when they discover that their efforts have destroyed their companies - and the US economy as well. I suspect they will also be making 1/20 of their present salary or thereabout - IF china is interested in hiring them. Otherwise it's off to the rice farm for them.
Jim
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Reply to
John T. McCracken
I agree -
My Grandmother, taught classes in the classics and high grade English and forced (somehow) the university to keep her on until her 85th when the Board of Regents voted to retire her but allow here to come to school as needed. She continued for another 5 years and then spent most of the time traveling and visiting family. She passed away post 100 years old. Some fine lady she was.
My Dad, retired and started a software company. Kept it up and while he was just sitting around started a sign, custom cut type, company.
He retired from a Directorship and Chief Design Engineer (Hardware). Still kicking around all of the time, I sent him a set of wrenches for Christmas. :-) Mom said they went into the truck just after breakfast!
Martin
Reply to
Eastburn
this page looks like OLD NEWS, imho. probably a study published in 1999 or 2000 and never up dated(?).
the business news (cable) channels and politicians have all recently jumped on the fact that skilled jobs are "going overseas", duh.... also very OLD news. --Loren
Reply to
Loren Coe
Wow! What are you smoking? Most Chinese shi*s outside in the field. If they have toilets, the sewage doesn't travel very far from the source until it's deposited on the ground.
Patriot? Name one other missile that has a documented kill rate like this one. Abject failure? BS.
Slave labor in U.S.? Population in U.S. prisons is around 1+%. Hardly a significant percentage from a manufacturing standpoint.
Taiwan no different from Iraq? Without reviewing some history, it's a lot different.
China capitalistic? I certainly hope so. Maybe these poor SOB's will have a future after all.
Mike Eberlein
Koz wrote:
Reply to
mikee
There's one point that's worth clarifying here, Dan. The direct labor in manufacturing runs around 10 - 12% in many segments, and it's a common thing to conclude that this can easily be overcome by improvements in productivity.
But this assumes that all of the inputs to a product, including plant cost, materials cost, transportation cost, and so on are freely traded or are otherwise in reasonable balance around the world.
Not so. The fact is that, in a country like China, virtually all of those costs are lower for the Chinese company. 80-cent/hour wage rates are paid in manufacturing (that's a fairly high wage for them, overall), but also to the truck driver who delivers the materials; to the rolling mill workers who make the steel; to the miner who digs the ore out of the ground. And those intermediate products aren't traded on world markets, because some of them (such as transportation) are inherently local, and because the exports of others are either not supported by government, or are not practical to trade because the value-added is too small.
It makes the whole supply and service chain cheaper. There are some things that China can produce for less than 10% of our costs overall. By the time they get here the middlemen have taken a very healthy chunk, but the prices are still so low that there is no possible way we could compete with them.
Ed Huntress
Reply to
Ed Huntress
So far so good. My comment was that if all the folks who used to work at those jobs, which are now (for whatever reason) not earning a wage, they will be unable to buy anything, anywhere, because they have no money.
Less being manufactured, no. Not right away. But if the stuff that is still being manufactured is sitting in the warehouses, because it is no longer being sold, then they *will* stop making more of it.
Jim
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Reply to
jim rozen
The CEO and other top executives ARE the people that actually run the company. The human element guaranties that some will operate in a corrupt self serving manner. As we have seen, some of those will be caught, and serve time in prison, in spite of previous fame or position. Most, will run the business in a way to gain max benifit for the stockholder, that is where the money comes from.
which is
Those institutional investors are many times the "working stiff" that you say has little influence, an example, the United Brotherhood of Carpenters and Jointers (the carpenters union), is a huge investment machine, they have many billions to invest, all belonging to those working stiffs.
control the market. The 401K's are a
Of course they are! When you deposite money in the bank, buy a bond, or invest in any vehicle available, someone is using your money for their own purposes, that's the whole point. In return, I get a return.
The actual 401K
He has control over what he invests his money in. Of course he doesn't get to run the company, he is an INVESTOR. He can and should expect a reasonable return on his money, he gets to choose when and where and even if he invests. If you want to have "control", then start and run a company. This is totally seperate from the role of investor.
You let cases of unethical business practices taint the entire system. On this planet you will NEVER be free of greed and corruption, the best you can hope for is a reasonable amount of corrupt individuals being caught and punished, hopefully persuading others that the choice to defraud and cheat others is a poor choice that can lead to ruin.
Of course there is, just as in every human endeaver ever. It is however, in my opinion, the best place in the world to do business, invest in business, work for a business and patronize business. Rather than sit around pointing out that the world is not fair (and it's not, and it never will be) I choose to spend my time and efforts enjoying the benefits of living and working in the most free nation ever to exist. And, I have to get back to work now, running my evil empire.
Name me ONE economy in the world where you would rather try and excell, outside the U.S. People die trying to reach the shore, not because of the weather, because of the freedom, and freedom of opportunity.
But it's not, and the ways it's not are sometimes difficult to
I pity anyone that thinks others are "calling their tune", you and only you are responsible for your position in this life, given the limitations of your circumstances. At no time on earth has a population had the freedom and opportunity afforded you and I. I chose to try and take advantage of that opportunity, knowing it is less than perfect. Indeed, power brokers wheel, deal and operate at every level from my county planning and zoning dept. to the highest levels of international banking. I know and recognize these things, I don't however let them affect my ability to enjoy my short little life or my pursuit of my version of the "American Dream". That will be my last comment, as I really do have to get to work, have a good week!
JTMcC.
Reply to
John T. McCracken
Not him, John. It's the regulatory agencies that allow this to happen.
So be reasonable, if you want to prevent punishment and corruption, and punish those who engage in it, we should stop the present plan of having govenment officials, whos job it is to do this, be ultimately beholding to the CEOs of these corporations.
To put it simply, we got the foxes guarding the henhouse.
Until this changes, it's going to be business as usual.
Jim
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Reply to
jim rozen
Well you would not do well as the head of one of those corporations like Haliburton or Exxon-Mobil or any of the airlines right now.
They've *all* got their hand out for the gummint to 'help' them, or whatever they call the call to return the favor once they get their pet politico elected.
Jim
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Reply to
jim rozen
For 1 and 2 above, The Economist, Sept. 6th - 12th 2003, p. 28. For 3 above, a ten-year subscription to The Wall Street Journal, to be read every morning.
You want a Republican commercial? I've been interviewing people inside the Dept. of Defense and the House Armed Services Committee for a week. I can do Republican commercials.
Ed Huntress
Reply to
Ed Huntress
If you are in the beltway, and these are the type of folks you spend your day with, it's no wonder your thinking is so.......skewed.
JTMcC, in flyover country, where the real people live.
Reply to
John T. McCracken
NYC suburbs, actually.
Ah, that explains it. You get different additions of The Economist and the Wall Street Journal out there, The Flypaper Editions, printed with special sensitivity for people in Flyover Country, including shorter words and bigger type.
Listen, JT, your sarcasm falls a little flat if your idea of an argument is that you know more about what you're talking about because you live in flypaper country. As soon as you opened your mouth I could tell that you've been raised on a diet of sophomoric aphorisms about economics, but I was trying to be polite.
Now, do you want sarcasm, and to act like a bumpkin, or do you want to talk about those economic ideas you raised? I can do sarcasm, if that's what you want. But I'd rather not.
Ed Huntress
Reply to
Ed Huntress
This is where a little sense of humor would do wonders.
As I said, it WAS A JOKE.
Again, a joke!!!
As soon as you opened your mouth I could tell that you've
Man oh man, it's a newsgroup for crying out loud. Lots of folks from whacko to whatever the other end of the spectrum from wacko is. You are not solving the problems of the world here, you are visiting, ( hopefully in a slightly educational and enjoyable way ) with people you don't know. The only price of admission is having a hooked up 'putor. Some people will have well thought out ideas, some won't. Some are misguided, others aren't. Some will agree with me, some won't. It is just a (sometimes lively, but in the overall scheme of things unimportant) conversation. Don't take it so personal, and yes, maybe my Wall Street Journal is a simpler edition, for my simple little rural mind. As far as being "raised on a diet of sophomoric aphorisms", we don't much like french food around here.
have a good week, JTMcC.
Reply to
John T. McCracken
John you seem to be missing the bus here.
Sure the politicians promise the voters XYZ from here to sunday. But they never deliver. They don't have to.
The real influence happens behind the scenes, where millions of dollars gets dumped into the campaign funds. In some cases it doesn't matter *who* wins because they contribute to both sides.
And trust me on this, if you've donated millions to get a politician elected, they *will* do what you tell them to. This is how goverment works now, and anyone who dithers around talking republican vs democrat, liberal vs conservative, has just been given the biggest smoke job you can imagine.
You may think that 'liberal' politicians are the antichrist of goverment. My personal take is, that corporate welfare, company bailouts, and the lack of regulatory oversight on so many of these entities that answer to nobody is the real trouble in the US right now.
Power failures, gas shortages, or airline bailouts, anyone?
Jim
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Reply to
jim rozen
Geeze Ed. It's 'only a newsgroup.' How come you keep coming up with all those ideas and information. I thought we were supposed to be just sitting around the pickle barrel...
Hmm, remind self of new rule, check cerebrum at door when entering.
Jim
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Reply to
jim rozen
Huntress
A youth wasted, reading books. And you know what I do all day, right? That's 25 years of research, to write around 500 articles. You can't pull them out of your nose.
I try, I try...Lord knows, I try...
It ain't removable. I was born with the non-replaceable model. I'm stuck with it.
Ed Huntress
Reply to
Ed Huntress
Huntress
No need to, that would take all the fun out of it. But, there isn't much going on here that's worth getting that mad about. And there isn't much going on here that's worth loosing your sense of humor. And, you don't even know me, why would my misc. opining be so bothersome? You deal with people here that believe the world is flat, that man never set foot on the moon, that Elvis shot JFK, the differences of opinion I have expressed should not bother you guys so much. I harbor no hate and very little animosity to those that disagree with me. This is the land of the free after all. I enjoy seeing the take others have, even if I disagree. So fire away, just don't take a differing opinion to mean the holder of the opinion is evil! : )
JTMcC, HOH (highly opinionated hillbilly)
Reply to
John T. McCracken

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