Wealthy people hire people? I didn’t know that
by Beverly Mann
Wealthy people hire people? I didn’t know that.
Crossposted with the Annarborist
“Unemployed people hire people? Really? I didn’t know that. The truth is the unemployed will spend as little of that money as they possibly can.”(here)
—Rep. John Shadegg of Arizona and Economics Nobel Prize laureate
Actually, of course, since Shadegg is right that the unemployed will spend as little of that money as they possibly can, and since as little of that money as they possibly can is, for most of the unemployed, all of the unemployment compensation they receive, unemployed people who receive unemployment compensation, unlike unemployed people who don’t, do hire people. Or at least prevent the layoffs of people.
Shadegg might want to consult the waitress at the coffee shop he stops at in the morning. Or better yet, the real estate agent who’s trying to sell that house down the street from his that isn’t quite yet in foreclosure.
Shadegg’s economics theory, of course, would make a perfect subject for our president to use as an object lesson for the public about the Republicans—and as a call to action, or rather anger, by the public. But then, he’d have to actually speak to the public about policy. And since that’s not in his repertoire of things he thinks a president should do, or is not in his repertoire of things he’ll trouble himself to do, Shadegg & Friends will win, on the policy itself and politically; when the economy begins to collapse again, no one will know why, and even then Obama won’t explain or remind them.
I would so love to see a Howard Dean-type Dem come out of the blue and challenge Obama for the 2012 nomination—and start now to educate the public and vociferously push back against the Republicans by turning the tide of public opinion. This Dem also could make the Afghanistan-war bottomless money-and-lives pit a hot topic, too.
This uninterrupted rightwing monologue we’ve endured throughout the last 20 months or so will continue uninterrupted until a countervailing force of that sort emerges.
Any takers?
Oh, and as for wealthy people: They hire people? I didn’t know that.
“Oh, and as for wealthy people: They hire people? I didn’t know that.”
Servants are proportional to the log of income, aren’t they?
😉
Bev said: “I would so love to see a Howard Dean-type Dem come out of the blue and challenge Obama for the 2012 nomination—and start now to educate the public and vociferously push back against the Republicans by turning the tide of public opinion.” Most conservatives feel the same. The resultant split in the Democratic party would be catastrophic.
Actually there is a lot of talk of a liberal challenge to “O”. Feingold, perhaps? Regardless, if there was a more liberal Presidential Dem candidate selected, the 2012 election would be a blood bath. Today, the country is in no mood to follow an even more liberal agenda than we already have. 2011 and 2012 may prove different, but it doesn’t feel that way.
This might be the most unintelligible essay I have ever read.
And if we can just repeal the minimum wage and unemployment compensation, the rich will be able to hire even more people. They do in Thailand; all it takes is for your cleaning lady and your gardener and your driver to each make $5 a day.
CoRev: “Today, the country is in no mood to follow an even more liberal agenda than we already have.”
We have a liberal agenda? Really? What is it?
Min asks: “We have a liberal agenda? Really? What is it?”
I answer: 1) public option health care reform,
2) global climate change,
3) amnesty for illegals
4) belief that the Govt is the solution for nearly every problem (fighting against any social finance reform),
5) class warfare -increasing taxes on (fill in your favorite group here),
6) anti-war/pro-terrorist actions (Guantanamo, civilian trials, killing versus capture of terrorist leaders, etc), and
7) reliance on any Keynesian economics solution for recovery.
There is much more, but it’s too early to think deeply.
CoRev – “The resultant split in the Democratic party would be catastrophic. …if there was a more liberal Presidential Dem candidate selected, the 2012 election would be a blood bath. Today, the country is in no mood to follow an even more liberal agenda than we already have. 2011 and 2012 may prove different, but it doesn’t feel that way.”
I think that covers it.
The Dems may split their party by backing another candidate as there is no way that the black voters will abandon Obama. What the black voters would do if another candidate won the Dem primary would be the unknown factor.
The Dems haven’t figured out how to secure a larger share of the Independent voters. There is no likelihood at this point that a more liberal Dem candidate will cause a return of the Independent voters in my opinion.
The inner circle of the Dem party is playing with nitro right now. Evidence of a forthcoming split is known around the beltway.
The Dem split looks to be in play, and I don’t see how that will help them in the 2012 election. I think the Dems have a real problem on their hands if they abandon Obama.
Beale – “This uninterrupted rightwing monologue we’ve endured throughout the last 20 months or so will continue uninterrupted until a countervailing force of that sort emerges.”
Any time that I read something like that, I know that the Dems are starting to lose it.
Beale lost it last month in my opinion. Unglued. It’s starting to really show.
same idiotology of the late 19th-earjy 20th centuries – the more the wealthy have, the better for all since, by definition, the wealthy know what to do with their often ill-gotten fotunes – they will save, invest, create employment and growth, that which the working class is [supposedly] incapable of doing.
modern lingo – cut taxes on capital and its owners,
allow the wealthiest to retain more
and rainbows and blue birds must cover the sky,,,
all can only be well in us o a’ville.
so well that overinvestment/overaccumulation of production capital takes place, avg rate of profit falls, which induces cost cutting via firing of employees and, to xtent competition demands, addition of new tech – all to drive rate of exploitation of living labor higher. Which may work for a few but certainly not most emloyees nor even most corporations which seek to recapture their formerly higher mass and rate of profit through increasinhly speculative activities — they become more finanxialized [which can also be seen as another negative feedback, particularly as this comes to demand, then depend, on progressively greater federal, state, local deficit financed subsidies and serial credit bubbles]. Real industrial capital becomes a fragile yet obscure house of cards. [think 1980s through present day]
“Pre-tax domestic nonfinancial corporate profits — a mouthful, but also seemingly a fair measure of the underlying health of business in America — are nowhere near record levels as a share of national income. They exceeded 15% of national income once in the late 1940s, and repeatedly topped 12% in the 1950s and 1960s; in the third quarter of this year, they were 7.03% of national income.”
http://ftalphaville.ft.com/blog/2010/11/26/416891/more-on-those-record-profits/
capex, etc. – http://av.r.ftdata.co.uk/files/2010/11/CashUses.png
Who is doing better? Well, according to the BEA’s data, financial industry profits and “rest of world” profits — that is, the money U.S.-based corporations make overseas — are relatively much higher now than they were in the 1950s or 1960s. And the taxes paid by corporations are much lower now than they were then, as a share of national income…..”
I’ve little doubt the percentages would be worse if tax based bea/nipa data were not used and if even this was placed into relation with total capital rather than national income or gdp, and if allowance were made for the ballooning of unproductive labor. Lowering taxes on those who are already hording will not bring thr profit rate up nor induce investment [other than of speculative/financial nature]. Recall that the latter, being in thr sphere of circulation are not in any way directly productive, cannot an economy make.
same time, greater income inequality, being less and less offset by credit, guarantees greater real market disproportionalities – sales and quality suffer.
MG said: “ I think the Dems have a real problem on their hands if they abandon Obama.” and I agree. They have another kind of problem if Obama doesn’t recognize his own faults and failures in the past two years. It appears Pelosi and Reid are clueless in the faults/failures recognition arena. That is probably because they are from fairly safe districts.
This uninterrupted rightwing monologue we’ve endured throughout the last 20 months or so will continue uninterrupted until a countervailing force of that sort emerges.
lesson plan comes from latin america and, more currently, europe – countervailing force will not be elections but in the streets – psuedo libertarian ‘tea party’ provides somewhat of a right-populist
example,,,,left-populism will emerge/is emerging.
CoRev,
The House Dems should have gone with Steny Hoyer instead of Pelosi. That would have helped them with the general voting population. Pelosi is the kiss of death beyond the leftists. I expect that Reid will be done in two years. They won’t stick with that horse in my opinion.
Obama has step up and do what is best for the nation as a whole. That’s his only chance of being reelected now. He has to get a grip. It’s time for him to be the President of all the people, whether the leftists like it or not.
And the Republicans have to play it straight or they’ll be back out on the street, too. They can only clown around for another few months.
It’s time to get this nation back on track.
juan,
The leftists can’t have control of this nation anytime in the near future. That much is clear based on the last election. It’s just not going to happen.
I agree, though, that the class warfare underway will erode support for the existing establishments in the USA. But I am not convinced that the nation will go socialist or worse. The upper echelon will be taught a few lessons and then things will settle back down.
I spent a large portion of my life in Central America and Europe. We will not end up like that during my lifetime. Europe is a complete mess in my opinion, and Central America is at a crossroads though I expect that they will strengthen the democracy models.
One thing that has happened is a sound lesson: Never surrender your nation’s currency. Europeans were stupid on that one. Dumb as dirt.
MG,
I agree with you two. I think having Pelosi and Reid re-elected was a gift to the GOP. Their individual seats (and vote) would not matter but keeping their faces in the news just will grate on people. And all the lefty dream stuff doesn’t have a chance. No cap & trade, no elimination of the secret ballot in union votes, etc, etc, (its early – need caffene).
And not onlt wil the black vote not abandon Obama if by some miracle a Feingold or Clinton actually managed to win the nominations from Obama I would expect riots in the streets and the black vote sitting out the election. Without the black vote the Dems lose big. This is about the only way I see Palin winning BTW.
But I am also very confident in the ability of the Reps to shoot themselves in the foot, repeatly, with a bazooka…the vote on earmarks is a first look at this.
Islam will change
MG,
I will quietly point out that you really goofed here on this one…
MG,
I read mostly left wing blogs and some in the center. I think you’re starting to see some of the lefties coming unglued. They are watching their once-in-a-lifetime chance to bring socialism light to the US slip away.
They dreamed back in Nov 2006 that the new congress would end the war and put Bush in his place, preferably in jail. Instead the new congress overwelmingly supported the surge and gave Bush everything he wanted. Iraq was won and Obama will secure Bush’s legacy.
They dreamed after Nov 2008, now with a stranglehold on the US legislature and Presidency that they would get the entire liberal enchalada. Single-payer health care, Carbon taxes or at least Cap & trade, heavy Federal Gov control of banks and finance, increased taxes – especially on the high income – to fund an the ever increasing reach and control of the Federal government into individual lives, elimination of DADT, closure of GITMO, end all the Bush war legislation(which teh Dems voted for), and of course end the wars. What they got was ObamaCare, a surge in Afghanistan, and no-end-sight US deficits.
So some or coming unglued now that the reality of the 2010 election is staring them full in the face.
Others have started disconnecting from reality – my favorite illiterate Harvard educated blogger M Yglesias being a example here. They tend to spot the Obama line like Baghdad Bob did for Saddam.
Yes, its starting to really show now that the dreams have been dashed.
Islam will change
juan,
“left-populism will emerge/is emerging”
Where? The left ran the government these last two years. Or did you miss the memo? They are the establishment., “the man.”
I’ll beleive you when I see big leftest protest on the mall, risking sunburn, protesting Obama’s war. Until then the looney left and especially the anti-war left are just a joke. If there was one thing everyone learned from the election of Obama was that the protests were actually against Bush and the Rs not the policies they actually enacted.
MG
This should be tatooed on every finance ministers forhead – “Never surrender your nation’s currency.”
Right on the money there.
Islam will change
Did you also not notice the author?? So much for glancing at the post.
Buff, MG, Sammy and even myself, the more consistent conservative commenters here, are actually watching the ungluing of the U.S. left. The dawning of realization of how badly their policies performed, the awakening realization of how poorly their politicians performed, and the inevitable dismantling of some of their worst ideas is just being realized.
That is what we are seeing. If you are not, then you probably are on the left and still in denial.
Now the conservative mantra: Please, Lord, don’t let us screw this up like we just saw happen!
True. The article was written by Beverly Mann.
Buff,
Well said.
I’ve had my cell phone melt down more than a few times with liberal friends. They’re one unhappy group of campers. Unhinged to the max. Worst I have ever experienced. Reminds me of the ’60s.
Beam me up, Scotty.
“Buff, MG, Sammy and even myself, the more consistent conservative commenters here, are actually watching the ungluing of the U.S. left.”
Ah projection! Hey C-R still plumping for the miracle of Anbar? Or maybe thinking the magic will just transfer to Kandahar?
The Republican Senate rode the last ten years first on the threat of a Bush veto of anything they didn’t like, and backing that up with the easier choice of abusing unaminous consent rules to block any action they didn’t approve after losing legal control of the Senate in 2006 and then continuing that through the election of Obama while still blandly insisting that Speaker Pelosi was in control of everything.
To the extent that the Left is coming ‘unglued’ it is in recognition of how Republican Senators have spent the last eight years resorting to anti-democratic floor rules to unapologetically control the national agenda. Only liars or morons believe that Pelosi has been controlling events since 2006. And Buff and CoRev are not morons. Plus I’ll give MG a pass on that front,because God knows he is a Google-Plex searching genius. (Sammy being on probation here).
You all are saboteurs claiming that successful sabotage is proof of the virtue of wearing wooden shoes and shoving them into the gears. Leninists one and all, hope you are proud at your undermining of democracy. Or I guess as you see it Democrat-cy.
Buff,
AMEN.
“The leftists can’t have control of this nation anytime in the near future. That much is clear based on the last election. It’s just not going to happen.”
What the last election showed is that the Democratic Party is finally scraping the last residue of Jefferson Davis off our shoes. Strom Thurmond showed the way to the exit in 1948 with the States Right Democratic Party and Wallace ironically assisted by standing in the door with a baseball bat (and yes that was Lester Maddox, same cracker/different box). The Right claimed the scalps of maybe five progressives while the Left is watching 28 Blue Dog scalps on the wall.
California is a fucking disaster zone. Which may explain why the last election kicked all state-wide elected positions to the Democrats. Because maybe the Ah-Nold Zone didn’t work. Of course it is only 10% of the whole population of the U.S.
Bruce,
Since 2006 and definitely after the 2008 election the Dems have had every chance to change the Senate rules. They didn’t. They will get another chance here in a month. My bet they won’t do anything again.
Lastly, the Reps have every right to try to stop legislation they beleive is bad. Just as the Dems do. And for part of the last two years the Dems had the ability to pass legislation without a single R vote. They decided not to do so. That has nothing to do with the Rs in the Senate of House. You can lay the blame on this squarely on the fact that the Dem politicians beleived that the socialism light legislation was not popular and they didn’t want to get voted out of office. Bad legislation is just bad legislation. Was it sabatoge when the Dems gutted Bush’s feeble attempt to change SS? Or just opposition to unpopular legislation?
Blaming people who successfully block unpopular legislation becuase they honestly beleive it would be bad for the country is nuts. Bring popular legislation! The voters were pretty convincing in the past November what they felt about Dem leadership for the past two years.
Re-read what I wrote. The people coming unglued are mostly the looney left and the ones who really, really wanted the US to make a major change in direction. Their dreams have been dashed.
And I don’t see any lefty grass-roots anywhere out there. Why? Becuase Obama is President. They protest R not D – they don’t about policy. So they are coming unglued with no where to turn…
Islam will change
“The left ran the government these last two years.”
http://en.wikipedia.org/wiki/Gang_of_6
http://en.wikipedia.org/wiki/Gang_of_14
Buff and here I thought you were paying attention. Or maybe I missed the point when the U.S. switched over to a parliamentary system that put Prime Minister Pelosi in full charge of presenting legislation to to Queen Michelle. NO WAIT! That is Beck’s NIGHTMARE!
The last time the Left was in sniffing distance of running government was in 1975 when we ran Nixon into his helicopter. And while I personally like Jimmy Carter he and his deliberately ran this country and his supposed Party right away from the New Deal in favor of the Slurping Compromise with the Banksters.
Was there ever a politico with the more appropriate name of Bert Lance? Because he set us up for the Rubin-isSticking. In retrospect we didn’t even need the David Tiny-Stick-Man, the baby was already drowning itself once the Carterites stomped Teddy. (Not that Teddy was the ideal spear carrier for the New Deal-but still).
I think I should add some historical context here since the econ news on the problem with the PIIGS is focusing only on “the problem is they can’t depreciate there own currency and make everything better”.
Ten years ago the PIIGS and others were desperate to get into the EU and use the Euro because they had depreciated the hell out of their currencies for decades and were unable to borrow money at reasonable rates anymore, if at all.
The EU architects weren’t as stupid as our brilliant economists make them out to be. They imposed limits on fiscal and trade deficits on EU members. It is a well know fact that a stable currency is good for business, and the idea was to create a larger regional market with a single currency and more common regulations and import duties between members.
Where the problem came in is fiscal and trade deficits either weren’t enforced, or like Greece, some countries cooked the books and hid the problem. In the case of Iceland and Ireland, lack of banking regulation made them the safe haven for financial fraud, and this was exploited by some Euro and US banks as well as Irish banks.
So the only good thing about having their own currency is the PIIGS would have gone bankrupt 10 years ago, and maybe would have partially recovered by now. But only maybe. (Some like to point to Argentina as a miracle economy, but really, how many are packing up to move there?)
I’m not unhinged. And, this ain’t the 60’s. Unless you count the immigrant bashing, Muslim and gay hating, racist “jokes”and general paranoid “anti-communist” hysteria. Then, it’s like the 60’s. But, if you don’t go to rallies where people are toting semi-automatic weapons, everything is normal. NancyO
Bruce, Since when have we ever needed a perfectly moral President? Teddy was no worse than many of those who have held the job. Nevertheless, we have the lessons of history. There’s no excuse for our not doing the right thing. Whole different problem. NancyO
I just read an interview of outgoing Ohio Governor Ted Strickland interview by Sam Stein published on Huffington Post on Dec. 1, and I think I’ve found my candidate—if only he would consider doing it. The interview is at http://www.huffingtonpost.com/2010/12/01/exclusive-ted-strickland-_n_790489.html.
Bruce,
I will concede the point. The LEFT did not run the country, the DEMOCRATS did. Otherwise my point sticks and you probably just re-inforced MGs point about a possible Dem breakup. The Left and Looney left, as oppossed to the Dems, are out on the fringe – not as far as ilsm, but far enough that they will hopefully never get power.
And its Obama’s catfood commission that taking the hatchet to SS and the rest of the New Deal. Nothing, absolutely nothing will get enacted without Obama’s (D) signature for the next 2 and more likely 6 years. These are the guys you ran as your champions. I garuntee you a McCain Presidency would not have even brought up the subject of SS after the drubbing Bush took on it. And we wouldn’t have the crap ObamaCare either!
I’ll beleive the left is actually serious about policy when I see them out on the National Mall risking sunburn protesting Obama. They did it against LBJ, a New Deal liberal, why wouldn’t they stand up to Obama? Oh that’s right – he’s a Dem and its not about policy.
So get real here Bruce – your a smart guy – the Dems had a stranglehold on the Fed for the last two years, for the two years prior every piece of legislation had to get the Dems approval. Not once, in my lifetime, has the Rs had as much control over the Fed Government as the Dems did these last two years. Obama now owns it all – GITMO, Iraq, Afghanistan 10% unemployment etc. And he’s AB’s guy.
I won’t say this is the left’s high tide since I have enduring faith the Rs will shoot themselves in the foot, but it probably is for the next 10 years or so. But right now the backlash against the left, the Federal Gov, and Obama is still growing. Unless Obama can pull a Clinton I would expect the Dems to lose the Senate in 2012. And if the left mounts a successful challenge to Obama’s legitimacy as the Dems Presidential nominee in 2012, you might just be watching Palin being sworn in (like the Dems watched Nixon in 1968).
Islam will change
Cedric, this is such an interesting and (I think) important comment that I just emailed Dan and suggested that he post it as a separate post. I’d love to read comments about it from economists.
Beverly
California is a lost cause. Helicopters filled with cash won’t fix that state. Really…it’s too far gone. All their calculators are broken.
I don’t believe that the leftists will control this nation anytime in the near future. The votes aren’t there across the nation. It’s not just the South, Bruce. It’s everywhere between the coasts. Once California implodes…well, that might just end the leftist gameplan for quite a while.
Besides, Independents will determine the direction of the nation. They control the swing vote, like it or not. The political party that ignores those centrists does so at its own peril.
Ok. Just noticed a typo tho.
“the problem is they can’t depreciate there own currency and make everything better”.
There s/b their.
Everything else is accurate and indisputable, however.
Buff,
AMEN again. But, God, I hope they don’t go with Palin.
The party of Barney Frank and ‘Squeaky Fromme’ Pelosi, the new Dems, aren’t responsible for a damn bad thing. Just ask them.
Nice Dutch shoes, Bruce.
MG,
I’m not a Palin fan, and I truely beleive she will not be on the ticket in 2012. But then stranger things have happened – she was more qualified than the current sitting Pres.
the Dems had 2 years of control and blew. Its that simple. That does not mean the Rs will do any better when they get their next chance….
Islam will change
Thanks for the list, CoRev. 🙂 But what makes you think that that is the nation’s agenda, or has been recently? Thanks. 🙂
Define “lost cause”.
They have the sixth largest economy in the world. They could feed the entire country themselves.
The idiocy of right wing hacks taking glee in Calis budget issues and acting like its a result of left wing socialist policies rather than right wing intentional strangling is astounding. Cals debt is less than 10% of GDP. If your household had debt of 10% of your income you’d be ecstatic.
I suggest if we divided into fifty countries, the way many right wingers like to view our republic, California would kick Texas’ ass ten ways to Sunday and the entire southern plantation district would be choked out within a decade. Their gulf will be poisoned from oil and their fresh water will be controlled by folks upstream of them. California currently receives less than a dollar for all federal revenues paid. Its the redstate southern haven that benefits the most from federal largesse. I’d love to see the southern part of the country secede. They’d be a third rate economic power in five years.
They are definitely more trouble than they are worth. They do provide some hot Miss America candidates though.
Hilarious. The first 3 are legislative proposals that went nowhere. The rest are comic book wingnut fantasies.
Maybe after you get woken up you can try thinking clearly. Some honesty might help too. Just saying.
Let’s run down the GOP’s options sans Ms. Palin. I doubt she will run in any serious way – it’s a pay cut for her and involves too much bothersome debate and policy prep.
Romney? Sorry but GHW and Barbara Bush just endorsed him that’s got to be the kiss of death. Plus i doubt he’ll get past the well established Limbaugh/Beck/Palin filters the wingnuttiest GOP primary voters depend on.
Pawlenty just got tagged with his own Willie Horton in the form of a pardoned pedophile who is apparently now molesting the kids he had by the victim he got pardoned for by marrying. (tortured sentence but accurate if bizarre)
Rick Perry is obviously running but will be reminding too many GOPers of dumbya to get the nomination much less indies. Jeb Bush same problem unless he changes his name.
Huckabee? Doesn’t pass the laugh test. Nor does perennial candidate Steve Forbes.
Yeah a primary challenge to Obama means electoral victory for the GOP. Right.
This bickering about some imaginary left-right policy distinction is absurd. In what reality is Obama a left of center ideologist? The concept bears no raltion to his actions on legislation. He has been cowtowing to a reactionary Republican minority to the point that hjis legislative accomplishments, if that term can even be used, are all to the right of centrism. Both parties represent the corporate interests and those of the wealthy. The Republicans make few bones about it, but do talk trash and nonsense when addressing their working calss base. The Democrats try hard to sound like populists, but never lose sight of their business first poiint of view.
Obama needs to win back the respect of his base and the respect of the fools who generally vote against their own economic interests. He’ll opnly accomplish that by taking a firm stance on what he says he believes in and let the Republican leadership fume all it wants to. The best step would be for the Senate to squash its very undemocratic fillibuster rule.
Gizzard: “They are definitely more trouble than they are worth. They do provide some hot Miss America candidates though.”
Candidates? Don’t forget Mary Ann Mobley and Linda Mead.
Go Chi O! 😉
In a saner world the newly elected Tea Party Inc congresscritters would be jumping at the chance to serve on appropriations a committee that used to be considered a plum assignment. But as Josh Marshall has pointed out not one wants to actually make policy regarding spending. Classic.