Can we have a civil, thoughtful discussion on this?

Current economic problems are due to excessive government involvement in all aspects of the economy. The radical changes required is a significant reduction in regulation and "supervision" by the govt.

 

At least you have made your position clear.

If only it were that simple. So men prefer to maintain complexities that in fact are the the very source of the problem?

I don't think so.

 

And until the 1980s employees enjoyed pay increases when productivity and GDP increased. Like the business owner, the employees also participate in production and creation of profits. But they weren't allowed to also participate in benefitting from the increase in their productivity. Is that clearer?

The point, which you are ignoring, is that in the last 30 years we have seen inflation and we have seen increases in productivity, GDP, and in the income and wealth of the top 1%. Yet we have seen the median working class income stagnate.

So you agree that employment needs are fairly flat, and so demand is also fairly flat because demand is determined by the amount of spendable income in play. So what is causing inflation? Money supply plus price increases determined by corporate desire for growing profits. And why haven't these increases affected worker incomes? -because corporate Boards of Directors have shifted gains to the top 1% and have neglected workers because they can.

But "progress" is not well represented by poverty, pollution, recessions, income disparity, loss of democracy, unemployment, degradation of education, crumbling infrastructure, dangerous products, unaffordable drugs and healthcare in general, and on and on. In fact we are not making "progress" on much of anything but income and wealth disparity. So we need a better answer than "progress comes at a price".

We would first need to elect a president and congress that is friendly to the idea of expanding worker co-ops. Then, with incentives in place, co-ops in which workers make the decisions and there is no pay difference greater than maybe 6 or 7 fold within any worker co-op or whatever the workers decide, would be a great start.

This is not a give-away program. Unemployed workers would be given opportunities to work for decent incomes. The point is that a government dedicated to improving life for workers could do it.

Be aware that I never said I am the expert who can solve all problems and provide a blueprint. These things can be worked out. First of all, we might want to consider that 1% of the population owns 75% of all shares of stock. There are stock options to consider, and they are very different for CEOs than for you and me. The advantage is wrong. But there are many things to consider and I'm sure that workers with titles like "senior accountant" and "business manager" can sit together and figure it out.

"Done with"? The employees would decide. They would be the ones who decide what to produce, how to produce, where to produce, when to produce, what price to charge, and they would decide everything relating to the health of their business and what to do to address problems. I expect if times were tough they would take a cut in pay, and when times were great they would take a pay increase for themselves. And everything else would be their decision.

Agreed.

huh?

 

Then you disagree with the OP which lays out the causes for our economic problems. But I didn't notice where you may have refuted anything of that in the OP.

Government always involves itself in all aspects of economy. That is one of its functions. But I agree that ongoing property taxes for homeowners, -who don't earn any income from said ownership, -is wrong and should be ended. I also have a problem with annual taxation of business furniture too if the furniture was paid for and not depreciated. But such things do not account for our economic problems.

 

Its not the involvement of govt that is the issue, the issue is the degree of involvement.

 

Please, as you suggest in your OP, do provide a link proving the above assertion.
While I agree that employees do participate in production, the fact is that much/most of the increase in production has come about from automation replacing human labour.

We have been seeing inflation throughout history, but completely offsetting periods of deflation ended in 1913. Increases in productivity have come about as a result of technological advancements, NOT increased human labours. Inflation, a constant devaluation of our fiat currency, consumer products many of which could not be produced without an enormous amount of labour has resulted in a great variance of the value of human labour. Would you prefer allowing hyperinflation to occur?
Since 1913, the Fed and our government has maintained an average inflation rate of about 3%. Source bls.gov

Employment needs ARE diminishing, but demand constantly increases with a population increase. The question should be 'WHO' is causing inflation. You seem to place the blame on Corporations, who may indeed desire to grow their profits and may increase their prices as a result of increased costs, but can only do so within the limits allowed by the consumers.

What you seem to not understand is that everything produced by humans has a cost, the labour, the raw materials and the human labour involved in acquiring them, etc.
Suppose government was to set a minimum wage of $25 per hour, or $52,125 a year? Would that end or reduce poverty? Would more jobs be created as a result? Would the unemployed increase or decrease? What would it cost government to provide welfare assistance to those who remain unemployed? Would inflation rise or lower? Suppose government was to set a 90% tax rate on the highest income earners, how might they respond/react? How did they respond/react when such a tax rate existed?
Progress towards irrational/unreasonable goals has consequences.

What laws currently prohibit worker co-ops?

Who would provide the opportunities to work for decent incomes? And what should/would government do about the lives of non-workers?

I doubt there is any one solution to all the problems that exist, and our time would be better spent attempting to resolve problems individually at their local sources.

As I said, the business has failed, would government provide their support if they were unable to find new employment? If the business was failing and the employees agreed to take a wage cut and it would result in a poverty or less income, would government be expected to subsidize them?
Are you suggesting a democratic process be used in determining what to produce and how to do it? That would have to assume the majority is always right, or that the majority could select one or a few to make decisions that would always be right.

Why then, not focus on achieving something along those lines instead of looking to our Federal government to mandate a one size fixes all solution to all our problems?

I asked "If there are no jobs, how many more people do we need?"
Sources cdc.gov and census.gov

Each year there are about 4,000,000 births in the U.S.
In addition there are about 2,400,000 deaths in the U.S. (various ages, including some born the previous year)
But the population is growing by about 3,300,000 each year (1,700,000 new immigrants?)
Is it possible to create what some call living wage jobs for each of the 3,300,000 million new consumers who are, or at some point in time be expected to become a a productive member of their society in addition to being a consumer?

 

Don't blame the government for the mistakes of a market-economy. In fact, you live in an economy of "governance-lite".

Regulations are necessary in a world where people "exceed limits". Regulations set those limits and enforcement agencies pursue those who transgress the limits. In general, they are pretty good safeguards that, even, save lives.

Excessive is a word that requires further definition. Just saying it does not necessarily make it true. Cite some examples, and we might continue the exchange ...

 

ALL increases in productivity, I expect, are the result of technological advancements. And yet workers saw increases in income since the G.D. to the 1970s. So this is a distinction without significance except to note that at times of recession and declines in productivity, wages have not risen. But in the absence of such setbacks, wages have been flat for the last 30 years.

Where does that question come from and how does it fit in here?

Tell me why. And why should all the gain go to the top? --because of private control and ownership of the means of production. That's why.

--within the limits allowed by government.
The Fed controls the money supply. It is controlled for the benefit of business and the business cycle. Consumers don't control inflation. But without inflation capitalism would endure crisis after crisis until it collapsed.

THAT is a very, very foolish thing to say. Instead of telling me what I "don't seem to understand", why don't you ask?

That would depend how it's done.

Studies show that in states that have raised their minimum wage, after 3 years the employment rate and the economy was improved and improving, as was the poverty rate. But all that aside, I have a problem with the minimum wage being so low that people working 40 hours a week qualify for, and receive, public assistance. The right wing way of dealing with that absurdity would be to lower the minimum income level qualifying for public assistance. The right way of dealing with it would be to raise the minimum wage to end the problem.

See above.

Those states say "less".

That would depend how it is done. Tie the minimum wage to the inflation rate and the problem is solved, and corporations would have no incentive to exploit inflation to improve profits.

They stopped taking so much business surplus value as income and instead created business tax write-offs by spending the money on capital expenditures, expansion, and new worker hires.

Yes, like proposals to cut top income taxes hoping more money will make the rich hire more workers instead of taking advantage of low taxes to accumulate more and more wealth. Why do you think we have a huge wealth and income disparity? ... --irrational/unreasonable goals.

None that I know of. But there are few incentives or supportive agencies.

Who needs incentives??? See, this strikes me as the standard right wing contempt for "lazy workers" as a "majority".

You mean the disabled?

What the right typically doesn't want to recognize is the source, which is an aging, failing economic system. We need a new system based on updated incentives that is structured to prevent the pitfalls of capitalism. Absent such a fundamental change, at best we would just end up right back here with systemic problems as we have now.

In any case, it certainly can't be worse than it is now, and at least those who are directly affected would have a say in a system that is designed to be for them as a class.

It is done already and very successfully in the Mondragon Corporation and in our own worker-owned co-ops. And as things are now, we see top management in our privately owned corporations making terrible decisions and failing. Leaving big business decisions up to a handful of people who don't participate in production has brought us quite a few disasters. Deepwater Horizon and Enron come to mind.

Because you're wrong.

Many options would be available that are not available today. If it is determined that there are too many births for a sustainable society, ZPG is a possible option. With a national promotion backed by analysis it would make a difference. Another possibility is that as robotics increase thereby reducing the amount of needed labor, the same workers could be retained without layoffs and they could work for the same monthly pay but work fewer hours. That cannot be done today with private enterprise when top executives run the business for maximum profit and increasing executive pay.

 

The Great Depression resulted from the Smoot-Hawley protectionist tariff legislation and the exactly wrong tight money policy of the Federal Reserve compounded by the command-control policies (inspired by the planned economic policies and bogus economic growth statistics of the Soviet Union) of FDR. The housing bubble was the result of D low income housing policies initiated by Bill Clinton and easy money policies of the Federal Reserve. Your entire premise is incorrect.

 

We have different readings on history.

The Great Recession and the Great Depression both are the consequence of inordinate Demand for risky options (on Wall Street markets) that led to a generalized downfall of prices. Both were human frailties at fault.

From here: US HIstory - The Great Depression Zxcerpt:

The above explains "generalized madness", which is the prime ingredient of market-crashes. Such madness, I suggest, is entirely human in nature and springs from inbred societal factors. Like "make a quick-buck and show the world!"

What you site are just historical appendages to the general atmosphere of the time - which can be explained as "get rich quick!" That's the American way in country fixated upon personal riches.

So, every thirty, forty years - enough time for a new generation to be bred and slammed into the breech - a financial calamity is triggered. This last one was, in fact, the worst because at its heart was fraud in the form of "falsification of underlying consumer capacity to mortgage" in the midst of a real-estate feeding frenzy. The Fed should have been on its toes seeking/tracking such fraud perpetrated by Main-street banksters.

"It's the American way!", in a nation fixated on individual enrichment. The Great Recession will happen again, and again, and again. Because the need for self-aggrandizement is inbred in the American character. Just like the benefit of a collective existence has been bred into the European character after centuries of warfare.

You and I may not be around to see the next major catastrophe on Wall Street, but IT WILL HAPPEN! Nothing has changed in either national mentality or safeguards on either Main or Wall Street to prevent it ...

 

I agree.

And still do.

Generally, wages increase as a result of inflation.

Statistically speaking that may appear to be true.

Hyperinflation would result in dramatic wage increases to maintain any employees.

Much production is being aided by machinery which can increase output with less need of human labour. Each new member of the population is a consumer.

That's a very good reason.

And again, I agree.

And does that benefit both the workers and the consumers equally?

That makes 3 items we agree on.

Are you inferring inflation is the solution to our economic problems?
Throughout history inflation has occurred, and up until 1913 offsetting periods of deflation did not bring about collapse.

Okay, what don't you understand?
or
Do you agree/disagree with "everything produced by humans has a cost, the labour, the raw materials and the human labour involved in acquiring them, etc."?

Perhaps you could provide a scenario which you feel would accomplish that without use of extreme force?

I'm not going to search trying to find where you obtained the above claims, but I'll accept that you believe them to be correct.

Had the minimum wage been tied to inflation in 1938, it would be about $4.26 today.

I agree with the part of what you wrote.

But do you feel its' rational/reasonable to expect someone, regardless of their wealth, to invest with the purpose of a negative return?
I think inflation has a great deal to do with the increase in wealth and income disparity.

Isn't earning a living incentive enough? Do we need a government agency to provide incentive to survive?

I asked "who would provide the opportunities to work for decent incomes? And what should/would government do about the lives of non-workers?", and it was you who brought up incentives, and now ask the question "Who needs incentives???" implying something I've not said.

I fully support caring for our disabled, so when I use the term non-workers I'm referring to those who are able bodied and capable of performing some form of labour to support themselves fully or partially.

I see nothing wrong with Capitalism itself, and the source of the problem as I see it is many faceted, population increase, constant inflation, constant growth of debt and deficit spending, increasing life expectancy, increasing trade imbalance with developing world nations where the cost of living is much less, just to name a few.

After the last 8 years, I would hope things could not get any worse.

What's stopping others from doing the same?

I'm wrong for suggesting we should focus on something you claimed we agreed on in the previous post?

If the Government unemployment figures are correct, Government could just mandate that each business increase their employment by 5% and wipe out unemployment.

 

Automation converts many low wage dangerous jobs into skilled, engineering, and technical jobs. Yes we get less jobs per factory but we have better jobs in the factories. People still have desighn build and maintain the machines.

 

The Wall Street Crash was caused by confirmation that Smoot Hawley legislation would result in extensive trade tariffs which would damage the US economy which it did when implemented ~ 6 months later.

 

Moving right along ...

 

Glad I could set you straight.

 

I just spent over two hours answering all your questions and providing some detail, and I hit one key in error and "POOF!!" --all gone and I can't get it back. I'm frustrated and don't have it in me to do it all again. Such are the risks of such a long post.

I'd like to ask you to see if you can consolidate your inquiries or break it down into several posts if you want to proceed from here.

Sorry.

The highlights are as follows:

Nobody is proposing businesses be stolen from private owners and distributed to workers. Rather, I'm among those proposing that workers of a company going bankrupt be given "the first right of refusal" to buy the company and keep it running with certain conditions and with certain incentives. Beyond that, workers could form worker-owned co-ops.

This is a capitalist economy with it's legal structure, laws, and various agencies to support it. As such there aren't many incentives and supports to advance the cause for worker-owned/operated businesses as I just described. Much more is needed for it to succeed.

Every economic system serves a purpose. In fact, each springs from a need that the system fulfills. And that's why it succeeds. But once the need is fulfilled, every system has degenerated and began to destroy itself and the people who work in that system. In the Middle Ages feudalism had a class of owners (landlords) and a class of workers (serfs). Eventually the system got in the way of further progress as serfs and workers were used to produce tools and housewares and wagons and plows, etc. Those workers realized they didn't need to landlords. They could form guilds and make a business of their craft. Thus capitalism was born.

In feudalism, the initial need that resulted in the formation of feudal society was the need for a reliable and adequate food supply. Production of goods was an outcome of the basic need of food production having been fulfilled.

The new system, capitalism, promised to do a superior job of producing goods. It took a while to work out the effective methods and supporting system of laws and agencies, etc. But eventually it got going and there had never been a system so capable of producing goods. Food production had been solved, and production of goods was welcomed. There was always something else to add to the repertoire. New inventions and products and good and methods proliferated. But soon the system began to lend itself to the creation of a "privileged" class of wealthy businessmen. But as long as it was still fulfilling its "mission" of providing goods efficiently and benefitting the people, it thrived.

Today, the need to develop productive capacity has been achieved. Capitalism has done its job. And now the great wealth accumulated by the most successful owners has become a tool used by them to gather great power to themselves. And more and more it is to the detriment of the workers. Three "classes" of poor, middle class, and rich are being divided into two classes: poor and rich. The middle class is disappearing. And this is not an "anomaly". It is rather a result of the state of trouble the rich owners find themselves in. They have refined production to the point where they can produce far more than we need, and if they can't sell it, they can't profit as they have. And the maximum production of maximum goods has been achieved. We don't need to buy more, even with the trick of "planned obsolescence" in place. That worked for a while but not so much now.

In order to keep consumption going after needs were mostly met and a more constant rate of production would have been adequate and sustainable, in the 1980s a great push began for consumer credit. Credit cards were produced and nearly given away. The public was told that they could still have that new car, the summer cabin by the lake, the new clothes, and still dine out weekly by just averaging the cost over time by using the credit cards. People complied and the American Dream flourished with a rising standard of living, fueled by increasing consumer debt. That debt bubble burst in time and the economy crashed. And I think on average people are a bit more careful about debt now. If that is true, it means consumption is down again.

So to keep profits growing, businesses are resorting to other measures since consumption is not rising as fast as the business climate needs it to rise. They merge to save on duplication of the cost of maintaining headquarters and business management staff, like accounting and payroll functions. They save by moving production to other countries where labor is just $5/day. They save by getting government to eliminate costly requirements of pollution management. Trump shut down the EPA today.

The middle class is disappearing because the rich corporatists are getting their government to funnel middle class "wealth" and incomes upward to the top in various ways. Workers earning near-minimum wage are receiving taxpayer-funded public support to help them get by. This takes money directly from the tax-paying middle class and subsidized workers' wages for the benefit of business. As union membership fell from a high of about 25% of the workforce, to the current 7%, workers' wages failed to keep up with inflation more and more typically. Hence the real median income has been flat for 30 years now.

And the list of problems springing from a failing economic system is growing with no effective solutions in sight.

But the government is not independent of the business community. The government's function is to support and advance business interests. After all, the top corporations essentially "own" government. So such a mandate isn't going to happen. It would be much easier to elect a favorable government that will pass laws to advance worker ownership of businesses.

 

Glad you haven't ...

 

The real median household income has not been flat for thirty years. It has always increased in non recessionary years with the exception of the Obama economy.

Non union autoworkers take just as much as union autoworkers.

There should not be a minimum wage because that reduces the number of low productivity people in the work force and prevents those people from developing a career path. The average residence time in the lower income quintiles is ~ 4 years. People do not stay in the low paying jobs - they move up. If they qualify for public assistance when in the lower quintiles that is a small price for society to pay to allow those people the opportunity of economic success.

Your assessment of the future is negative. The assessment of the future by Trump is very positive.

The gov's function with regard to business should be the reduction of gov imposed costs on production to the absolute minimum. IMO the corporate income tax rate should be zero. And regulations cut back to the minimum necessary to maintain public safety. Good governance does not tax production - it taxes consumption.

BTW as a suggestion write your long posts on a word processer and then copy them into the forum.

 

Your post which I was responding to was lengthy containing multiple issues, and like many issues brought up in most other threads they only grow as a result of cause and effect indicating the real complexity of most issues.

"Right of Refusal" contractual agreements exist, but usually between partners who were the initial investors who created the business. If a large business such as GM was to face bankruptcy and government were to not bail them out, I know of no legal impediment which would keep the employees from making an offer to take over the company. As best I can find liquidation would result in $50 per preferred share and $1.67 per common share, and the employees could make an offer based on the total number of outstanding/preferred shares along with any others who might bid to take over the company. But what stops the creation of worker-owned co-ops, who would initially invest in the costs of starting a new business, and perhaps even require new employees to invest a set amount in the business in addition to meeting other requirements relative to the work they would be expected to perform?

 

And Republicans have never improved the economy except when they did.

So much for your continued BS posting.

 

Exactly.

Yes, the concept exists. And I've applied it to the situation I described.

Funding would be a problem. In economies where this idea has been implemented and workers have taken over such businesses, the rule/law was something like ..... the workers let their wishes be known to the government; the government offered to give the unemployed workers their entire 2 years worth of unemployment benefits up front in a lump sum under the condition that the workers could get 10 workers who agreed to the plan, and to use the lump sum to pay for acquisition fees and starting expenses to get the business going again. This kept the remaining workers working and off unemployment, it kept tax revenue flowing, and it kept the ripple effects of a failed business from spreading. Win-win. Currently the financing expenses are usually a non-starter so this kind of worker take-over doesn't happen here.

That sort of approach could be studied, case-by-case. Maybe the value of shares would be much less since the business is in bankruptcy. Stock I've held in a company that went bankrupt went to pennies or fractions of a penny per share or even zero. So this is just one of a possible number of considerations that could be useful.

What stops it? Just the laws on the subject. I don't know of any existing incentives for such a transferral of ownership. Certainly if workers were frequently able to raise a few billion dollars to fund buy-outs, it could be done. Riiiiiight.


--------------------------------------------------------------------------------


- - - Updated - - -

Yup, that's his M.O., Lafayette.

 

REALITY CHECK

Wrong. They are really quite reprogrammable. They have been in use for 20/30 years and have reduced manufacturing costs considerably. Frankly, robots are as much to blame as Mexico for reducing the US percentage of Manufacturing as a part of GDP (which is only at 20% nowadays, half as much as in the 1960s.)

In a country that swings to the beat of "gotta have the latest thingamajig", we forgot that that rule also applies to our manufacturing processes.

Remember, US manufacturing must compete with that which we consume from abroad, and if Donald Dork thinks he is going to renegotiate the exchange by raising import-barriers, he is going to start a Trade War of the kind the US has not seen since the 1930s. Want another Great Recession? Go for it!

One in which everybody loses ...

Enough of the drama. Nobody is starving in America's middle-class. In fact, our Numero Uno health-problem is obesity. Except perhaps those below the Poverty Threshold, largely there because they do not have the educational credentials for the jobs that are going.

Hillary had an answer to that challenge (called a "postsecondary educational subsidy" to families), and we, the sheeple, dished it. (Reality Check: American manufacturers are searching for foreigners with Production Automation experience from abroad because they can't find enough of the American variety. Why? We are not educating them in sufficient numbers!)

Be prepared for more of the usual BS from Donald Dork ...

 

In which economies has 'this' idea been implemented and which businesses were taken over? Also a link to the applicable laws they use would be interesting.
I, and perhaps others, would be interested in seeing the full details of the cases you're referring to. I don't feel I could support lump sum unemployment benefits, although some form of low interest, unforgivable, secured loan might be acceptable.

Provide links to some of the examples you are referring to. Obviously a business in bankruptcy cannot be worth much more than the assets it has to sell as stock prices are based on future expected earnings. Common shares can become totally worthless as preferred shares often have a liquidation value leaving what's left if anything to the common share holders.

But I was really more interested in starting a new business as an employee owned and operated co-op, I know of no laws that prevent that or make it any more difficult than a private owned business, and it would appear the primary incentive already exists, a portion of ownership, Many businesses begin as partnerships where the investors are also the working employees and if they prove successful they begin to add non-owner employees who are paid a wage as in the case of Mondragon Corporation.

 

That something can be re-programmed does not make it operate longer. How many 386 computers do you still see sitting around offices?

Hillary stole a lot of other people's good ideas. Hillary, however, lost because she is Hillary. Free college is wasted energy if there is no job waiting for you when you get out. It was the fundamental flaw in her "Why I am going to kill coal!!!" obsession. Give everyone in Appalachia a PHD and you would just have a lot of Phd's on the welfare rolls.

 

Practically none, but you've taken the wrong example; one of hi-tech that has a habit of growing old very fast. Which, economically, is goodness since it must be replaced with something better.

Meaning work for a good many people. Depending upon the product, the work necessary is determined. If it's a computer, more than likely the far-east for the hardware but the US for just a software upgrade! And all those Apple-apps that are available!

If it is a Caterpillar plow, then the US or Europe has a good chance of building it.

As I said, it all depends. Don't look for original "French perfume" manufactured in the US. You wont find any.

"Stole", did she? At gun point? Don't be ridiculous.

"Hillary lost because she is Hillary". Right, it was her bad perfume? Or because she didn't grope men?

The flaw (if there was any) was in the ignorance of the American people who did not understand the absolute necessity of banking on Higher Education for this New Millennium that has just started. She did assume willingly Bernie's idea for a postsecondary education free, gratis and for nothing for any family earning less than $100K, which is the income of two parents each earning just below the average US income. It was a great idea!

But, that wasn't good enough. Americans got all upset about her emails, the trigger-point being the Replicant FBI-head who insisted on a "further investigation" just one week before the election - which proved absolutely nothing!

Except that it got him a "stay on the job" from Donald Dork. (Wow! What a surprise!?!)

I would love to give everyone in Appalachia a doctorate, and you and I both know that aint gonna happin. But for anyone who LEAVES APPALACHIA and does get a postsecondary degree, s/he will like find a good-job. And they can stop crying in their beer.

Which is also my advice to you. The US is a BigCountry, there are jobs everywhere if one has the intelligence to go looking for them ...