Synthesis

[tabs]

I want to bridge a gap here.

The Liberal point of view seems to be that the American standard of living is declining because the Large Corporation to maximize their profits are exporting jobs abroad so that they can take advantage of cheaper labor and more lax environmental regulations. So that they can make even larger profits.

The conserative point of views is that the government is taxing the corporations to heavily (workmans comp can be classified as a taxation for my purposes), enviromental regulations is strangulating them, and Unions keep wages artificially high with respect to these corporations foreign competitors. That to survive and to make a profit which is their purpose in the first place they have to move jobs out of America.

At this point I want to point out one thing. That to enjoy as high a standard of living as in America you have to have economies of scale. You have to produce X number of units to bring the price down so that they are cheap enough for a large number of people to buy, and by producing X number of units you reduce R&D costs so that further tech advances can take place. So this is the benfit that the large corporation has bestowed on America.

That said: Both the Liberal and Conserative sides of the argument see the same thing happening. Only they see the causational factors as being different. The Liberal sees the corporation as being the culprit and advocates more governmental regulation of corporate activities...such as tariffs and or penalties for moving off shore. The conserative sees governmental intrusion at the behest of the labor party as being largely to blame. Both arguements have veracity on the surface of them, however the truth lies somewhere in the middle of both arguements. I do find it ironic that foreign car manfacturers use the USA as a car assembly place (Toyota, Honda, Nissan, Porsche, MB) however they invariably all are in RIGHT TO WORK STATES. At this point I am too tired to think anymore and am going to go to bed!

[cegerer]

I just woke up and I'm too tired to think about this .....

[Aurel]

Tabs,

Your synthesis started really nicely, and you can be credited the ability to see and understand both points of view. Somewhere though, it stills looks like a work in progress, and the conlusions have not been reached yet. It is always more difficult to reach conlusions when we take a honnest look at things than we use a biased vision, Isn`t it ?

Economic analysis in itself is not easy, because on one hand, one could see a very strongly recovering economy with a fastly growing GDP. Another vision could see a system on the verge of collapse, with an artificially inflated GDP that does not create jobs, and only reflects money changing hands on the stock market...

I am almost done reading Paul O`Neils book. I think the guy had a genuine talent for fixing things on the long run. He had many good suggestions for Bush, on how to fix the social security retirement pension system, on how to avoid more corporate scandals like Enron and reteach corporate ethics to CEOs...

Problem is, Bush never read his memos.
When he found out about it, O`Neil started writing short memos of 3 pages...but still, Bush seemed to have difficulty reading them. His big issue was opposing Bush`s taxcut, which seemed to him like a short term fix at best. Then, the conditions changed, the spendings increased, and Bush still would not reconsider his taxcut. His main argument was: `I promised it, and I will never negociate with myslef`. Now, the question of whether or not his taxcut really helped the economy is an entirely political debate in itself...maybe an answer could be: yes, the taxcuts helped an economy that does not create jobs and only makes stock holders richer...

Aurel

[Overpaid Slacker]

tabs -
Your characterizations are good, but they don't capture (as their proponents apparently don't understand) the larger, macroeconomic movement.

Take your economies of scale example -- it's not just about producing X more of a product, it's about applying the effort (incl. intellectual capital) where it will produce the most wealth. So, you could put X units of labor into making shoes, or you could put it into cancer research. We've got the capital, infrastructure and intellectual development to put more of our efforts into the "harder" things to do -- like cancer research/aerospace, etc., so that's where the Invisible Hand is going to push them.

The larger macroE issue I'm talking about is the movement of our economy from a relatively-less-sophisticated industrial economy to a relatively-more-sophisticated services/technology economy. There are going to be displacements (as there were when we moved from a predominantly agrarian economy to an industrial economy) -- but the two viewpoints you put forward completely ignore the fact that it's not the corporations mucking with the economy and it's not the government mucking with the economy, it's the economy doing its thing.

Sidebar -- business is in business to be in business; if you're not doing what you can to maximize your profits, you'll be out of business b/c others (domestically or internationally) will do what it takes. And those you employed will be on the dole. Corp's are not welfare agencies established for the betterment of humanity; to claim they've got social obligations above and beyond simply playing by the rules is to fundamentally (and deliberately) mischaracterize the situation.

Aurel -- the news of the more than 112,000 jobs created in the last month hasn't made it across the Hudson? Not that I expect fact to prevent you from repeating your beloved mantra. If the economy is producing wealth "only" for stock holders, then ... buy stocks. Your 401(k) does, your pension does... you can too. Our system rewards risk; and capital-at-risk is essential to wealth.

Perhaps Bush disagreed with O'Neil, or was receiving counsel from others who had different ideas than O'Neil. O'Neil has a great case of CEO-itis; he'd run Alcoa with a strong arm for so long that he got used to dictating terms, and if it wasn't his way, he responded like a spoiled rotten kid. Consider the motives of your sources.

Sarbanes-Oxley and the new NYSE and Nasdaq rules have done and will do a lot for corporate ethics (maybe too much -- not too much ethics, just overreaching in some areas) regardless of how O'Neil would've wanted it done. Perhaps, just perhaps, the fact that he couldn't drive the bus when he'd been used to issuing corporate fatwas has a role in his characterizations. I haven't read the book, and frankly it's not on my list, but how much opposing viewpoint does O'Neil incorporate -- and, to the extent he does, how much of the dissent are strawmen he sets up to knock down? I'm talking about choosing (or perhaps fabricating) the weakest of a bunch of opposing arguments, instead of the strongest, to make him look like a conspired-against champion protagonist.

JP

[nostatic]

I for one am pissed off that the market is doing better. When my TIAA-CREF account was bleeding, I was doing some serious cost averaging, buying retirement shares on the cheap. Now that it is going back up, my monthly contribution is buying less. I want it low for the next 25 years or so...then shoot up.

Damn market...

[tabs]

Hmmm..that is something I overlooked, was the natural evolution of this countries economy from Agrarian, to Industrial, to Service/Tech. It's like seeing the trees but not the forest.

The Stock Market is only an indicator of business conditions.

One of the things I wanted to bring up earlier (another thread) was the fact that the USA should change the tax laws to make saving money more atractive. The Tax laws since the 60's have favored spending money rather than saving.

PS: I see both sides of every issue, and I find the middle ground is where truth lies, for that is where a balance exists. I always look to see if a person has a balance or how much balance is in their arguement. One of the reasons I am able to run riot on these boards is I am able to choose at will the amount of tilt or balance I want to instill in anything I write. Also because I can see both sides of an issue I am able to anticipate the range of responses I am going to receive.

[s_wilwerding]

Even though I am a conservative, I disagree that corporations are paying too much in taxes. A lot of corporations pay no taxes at all because of various loopholes and corporate welfare.

Having said that, I am on the side of the corporation. Everybody rails against corporations and the harm they cause, but I would imagine that over half of the people on this Board (perhaps fewer since we have more "entrepreneurs" on this Board) work for large corporations. I myself work for a Fortune 100 company. These large corporations provide a great benefit to our society by employing a large number of people, and in my case and many others, provide excellent benefits to employees.

So, while I am in favor of being a little more strict on the taxation of corporations, I do think the government needs to be careful in being too strict on corporations, as that directly leads to fewer employees and/or fewer benefits. The best way to increase employment is to make it attractive for businesses to hire workers, and generally that involves having as few government regulations on business as possible.

On the subject of offshore jobs, unfortunately I think that is going to continue. I think manufacturing jobs, for the foreseeable future, are going to be shipped overseas because the cost is so much less. The thing that boggles my mind, however, is how software and IT jobs are going overseas, especially to India. This is done ostensibly to save money, but I know that in most cases, it has caused more problems than it's worth. Trying to coordinate with employees halfway around the world on software and systems that constantly need attention is a nightmare. I think more and more corporations are going to see this and the outflow of skilled jobs is going to decrease.

Just my $.02.

[tabs]

Taxation can come in many forms...Workmans comp for instance, CA rates are so high it actually kills businesses.

[Overpaid Slacker]

A company whom I represent is *seriously* considering pulling its manufacturing out of CA b/c of compliance costs and the left-coast, anti-business environment. The workers' paradise made real.

JP