Top Of My Head

Thoughts on everything from Politics to Video Games

Category: Economy (page 2 of 3)

The Republican Plan

Rush Limbaugh – that moronic flab of hot air – says that the Republicans can’t compromise. Well, that’s just great. The Republicans should play to their fringe and not to common sense. Around half of our deficit problem is because of the tax cuts in 2001 and 2003. A quarter is because of two wars that we cannot afford. The government, despite my own comparison, cannot run like our household budgets. The government’s job to to provide for the general welfare of its people (see US Constitution) and if people aren’t going to eat because there aren’t any jobs, let the government spend the money.

Yes, we need to cut spending, but we need to raise taxes on the upper echelon of this country. If tax cuts create jobs, like the right wing keeps claiming, then where are they? The US Corporations are paying less in taxes now then since the 50’s (which, by the way, have a great economy). So, where are the jobs?

Limbaugh claims that the GOP won’t have a backbone if they compromise, well, Limbaugh wouldn’t know a backbone if it hit him in the face. None of these guys would. Having a backbone, manning up, this takes courage and it is easy for them not to compromise if that’s what the tea party wants. They’re bending to someone else’s will.

What shows a backbone is standing up for that which is right against those who disagree. If the Republicans said, look Obama has compromised on spending, so we’re going to give a little revenue – that would show some courage. Right now, they’re just thinking about their jobs and not the country.

Debt Ceiling

I could go over Obama’s talk from last night and cover the whiner, Boehner’s dismal response, but I won’t.  I was going to post my own economic research, but I found an article on The Coffee Party website.  I think it is a pretty level headed response to what is going on in this country.

So, please go over there and read it.

The graph regarding the comparison between individual and corporate taxes is enough to make you sick.  It is, also, one of the reasons that the middle class’s wages have been stagnate.  I’m going to blame the lack of hiring in this jobless recovery on it as well.  If there is no incentive to hire someone, corporations aren’t going to do it.

Jobless Recovery

To understand why we are having a jobless recovery, you must understand economics.  Unfortunately, most people in this country do not really understand economics.  So, here’s a very brief explanation.

Our economy is consumption driven – the old supply and demand.  Let’s say I own a widget factory and I make one widget a day – 5 widgets a week.  I send my widgets to the marketplace and every week, I sell all of my widgets.  But, one week, I notice that there are still 5 people in line wanting to buy my widgets.  If I could make more widgets, I’m certain that I could sell all of them, as well.

So, I return to my factory, and hire a person to help me make widgets.  I pay him an hourly wage that pretty much leaves me with most of the profit – this is MY factory and these are MY widgets and if he was bright, he could start his own widget factory.  This is America after all.

Now,  because there are two people building them, I can make and sell ten widgets a week.  Some time goes by and word gets out that I make the best widgets.  Now, I notice that there are three people standing in line when my widgets are sold out.  So, instead of hiring someone new, I make my one and only employee a salary employee (which means I don’t have to pay him overtime) and I make him work longer hours to make those extra three widgets.  Since I don’t have to pay him overtime, I’m still making an enormous profit.

This is how companies work.  This is capitalism, admittedly, at its very basic level, but you get the idea.

If the economy falters and I stop selling 13 widgets a week, I’ll cut my employee’s job.

If I discover that I can outsource widget making to China or Taiwan, bye bye employee.

And, guess what, if the government cuts my taxes, I’m not going to use that money to build another factory (creating new jobs) or hire employees in my old one, I’m going to keep it.  I deserve it.  I came up with this idea for a company and I built it.  And, that’s why giving tax breaks to the richest in this country, isn’t going to create jobs.

If there is not consumption on the bottom and middle rungs of our country, there is no reason for companies to hire.  Cutting the taxes of the rich does not cause jobs to magically appear.  It just makes the rich, richer.  And, because that revenue needs to be made up in some manner, it makes the poor, poorer.  Cutting things like health care for the poor to give tax breaks to the rich is absolutely the most despicable thing we could do in this country.  Cutting school lunches for poor kids or the breakfasts before school, where this might be their only decent meal – and give a 10% tax break to the rich who can afford to pay their taxes under the guise that this will create jobs is irresponsible and ridiculous.  But, that’s what the Republicans are selling you – a tax break for those at the top who don’t need one.

Are there people in this country that don’t pay any money in taxes?  Yes, yes there are and if the Republicans have their way, more of them will be rich than poor.

Credit – Bid Laden and the Bad Economy

Reading the comments on any news site is like traveling through a verbal minefield. Those on the right want to blame President Obama for our bad economy and those on the left want to blame former President Bush (George W, not George Herbert Walker). Then, regarding Bid Laden’s death, those on the right want to give credit to former President Bush (again, G.W.) and those on the left want to give credit to President Obama.

Both sides are wrong.

Admittedly, I don’t know a lot about the capture of Bin Laden – but, that’s not going to stop me from commenting. Here’s what I know based on various news reports.

I know that he was found in Pakistan. I know that at one point Pakistan was our “friend”. At some point, we decided that we needed more CIA operatives in Pakistan and we put them there. Eventually, these extra operatives were able to find out the necessary information on Bin Laden’s whereabouts and that is when President Obama was brought fully into the loop (Please don’t fool yourself in thinking that the CIA shares every bit of information with the President, they don’t.) and he made the decision to go and get Bin Laden.

Intelligence gathering takes time, just in case you don’t know. If the information had been gathered four years ago, Mission Accomplish would’ve rang true for Bush II, but it didn’t. Should President Obama be allowed to bask in glory of having found and disposing of our nation’s greatest enemy on his watch? Damn straight he should. Give the man his moment in the sun. He gave the order, he approved the mission. If it had failed, he would’ve taken the blame (remember Carter?). He, along with our fine Navy Seals – take that special forces (what can I say, I’m a Navy brat) – should feel proud for this successful mission.

Now, I would like to say one more thing. Former President George W. Bush is not dissing President Obama by not appearing at Ground Zero with him. He’s doing exactly what he said he would do: stay out of the spotlight. With the exception of his book tour, Bush has stayed away from being center stage. His father did it during Clinton’s presidency and now, George W. Bush is following in his father’s footsteps. He’s doing what the right wing doesn’t want done: He’s giving Obama his day of glory. I think that’s very nice of him.

Now, about the economy. Here’s a very short economic history lesson:

The repeal of the Glass-Seag­al Act in 1999 by the Gramm-Leac­h-Bliley Act started the financial mess (by removing the barrier between Wall Street investment banks and depository banks. This led to the sub prime mortgage crisis, which nearly brought this country to it’s knees. For the record, the Gramm-Leac­h-Bliley Act was sponsored by Republican­s and signed into law by a Democrat. Both parties are to blame.

Now, I believe that when you coupled the Gramm-Leach-Bliley Act with Bush’s ridiculous tax cuts for the rich, you just added fuel to the fire. Profits became king, which made the banks and Wall Street take even more chances. However; I am not saying that the Bush tax cuts were the sole reason, just that they exasperated the situation. I am not sure what the tax cuts would’ve done to our economy without the repeal of the Glass-Seagal Act.

In other words, and I’ll say it again, both parties are to blame.

You know who isn’t to blame?

President Obama.

No matter how you slice it, you can’t lay the blame of a bad economy at the feet of a man who wasn’t in power when the economy started to tank. Even though I don’t believe Bush caused the bad economy, there’s at least some cause and effect there and precedence for blaming him. Remember, Carter was blame for the bad economy he inherited from Ford and Reagan was blamed for the bad economy he inherited from Carter. (The 70’s and early 80’s were just a bad time.) In fact, I don’t think Reagan would be so beloved today if he had to deal with the 24 hour news channels and the bloggers like Obama does. But, that’s for another blog.

So, in a nutshell, let’s stop all this petty bullshit and start actually working together. Let’s stop shouting crap at each other and start crossing the aisle. Neither side has a monopoly on what’s wrong for our country and neither side has a monopoly on what’s right for our country. We’re never going to get anywhere if we keep hoping the President fails or slam him all the time. We can’t solve any of our problems talking about those blowhards, Palin and Trump – two people who couldn’t be elected dog catcher to the stars. Let’s start having open dialogues about the issues with some facts, not falsehoods and let’s figure out how to solve our problems. We didn’t kill Bin Laden without some cooperation on both sides and we won’t be able to fix the economy without it.

You Can’t Run the Government. .

You can’t run the government like a business and anyone who thinks you can is a fool. The whole goal of business is to make a profit. Oh, sure, most businesses have a mission statement with a lofty goal about exceeding customers’ expectations or adding value. In all the ones I reviewed, I only found one company who was honest enough to tell the truth. After the phony provide value statement, the next line was “To be profitable”.

None of the government’s goals are to “be profitable”. If the government made a profit and didn’t return it to the taxpayers, there’d be hell to pay.

However; running the government like a business is what all these “Reagan” Republicans are all about. They cut taxes – in a failed attempt to create jobs. You don’t cut you income when you need it most. Companies that do that usually end up hanging Going Out of Business signs. You don’t cut Research & Development money (in government’s case education) and expect to stay ahead of the competition.

Government is not a business and it shouldn’t be run like one.

Oh and lest you think I’ve forgotten – RECALL WALKER!

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Walker’s Anti-Union Success

If the budget was all about balance and not destroying unions, then why – as a friend put it – did “Walker and his henchmen” pull the collective bargaining rights out and pass it?

I’ll tell you why. This isn’t about our great state. It is about Governor Walker making his friends over at Koch Industries happy. Watch who takes over our state owned energy assets and then ask yourself if this was about a balanced budget.

Worse – he campaigned on how he will create jobs. I don’t see anything in this budget that has created one job.

Can you say RECALL, boys and girls?

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Video Re-Run – Tax Breaks for the Wealthy

In case you missed it the first time around, I’m re-running it here.

Harley-Davidson – Leaving Milwaukee?

In the news this morning is an article – rumors of which I’ve been hearing about for months – that Harley Davidson wants to move their operations to another state.  (The rumors I heard was they were moving to Canada.)  At issue is the company’s desire to “cut millions of dollars at the factories that build the bikes”.  According to the article, they plan on making their decision within the next two months.

Also, according to the article “The company, he (Harley chief executive Keith Wandell) said, would also be open to incentives to keep the 1,630 manufacturing jobs in Wisconsin.”  I’m sure those incentives include tax breaks paid for by us – the taxpayers of Wisconsin.

And, is Harley-Davidson suffering?  Are they about to go broke?

Not according to their financial report:

“Harley-Davidson, Inc. (NYSE: HOG) reported second-quarter 2010 income from continuing operations of $139.3 million, or $0.59 per share, compared to income of $33.4 million and earnings per share of $0.14 from continuing operations in the year-ago quarter.”

Granted, sales of Harleys are down, but with the economy suffering as it is – isn’t that to be expected?  Harley-Davidson is the best motorcycle in the world.  Their sales will bounce back.

I don’t want to see 1,630 of my fellow Wisconsinites to be out of jobs, but do we really want our state to bend over and give incentives as a bribe to keep them here?

I know what’ll happen.  Our cash-strapped state will give in, save those jobs and the tax payers of Wisconsin will pay for the privilege of having Harley-Davidson motorcycles built in Milwaukee.

Just a thought…Rise in Stolen Cars – a sign of real thefts or the bad economy?

Crime in the US has been dropping.  According to the FBI, there were 1,646,037 violent crimes committed in the US in 1989.  In 2008, there were only 1,382,012 violent crimes committed.  Granted, that’s still a bad statistic for those almost 1.4 million people, but good news in general.

Despite that, according to the Highway Loss Data Institute, noticed that there has been an uptick in claims for stolen pick up trucks since 2006.

And, that made me wonder.  Could it have been a sign of the bad economy to come?  Could “stolen” pick up trucks have been planned to be stolen because their owners could no longer make the payments?  The FBI table doesn’t bare out the idea that more vehicles are being stolen from 2005 to 2006, but I was just wondering.

An Economic Truth

For months, I’ve been telling my friends that the bad economy cannot be fixed by the government alone, nor is it the government’s sole fault that we’re in this mess.  Yes, the deregulation that started under Ronald Reagan and continued through Bush I and Clinton before it imploded on Bush II has to take a lot of the blame.  The tax cuts on big business have hurt the economy, as well, even as we hear the battle cries from the far right to cut them some more.

However; the bigger slice of the blame game needs to be laid at the feet of the companies themselves.  Our government is in their pockets and have made it easier for the companies to only look out for themselves in the last thirty years, but We the People have elected them.  As long as companies don’t hire American workers to work in American plants and as long as the American government doesn’t place a high tariffs on non-American made goods coming into this country, we will continue to have high unemployment.

For example, according to this week’s Bloomberg Businessweek (pg.50), Apple employs 25,000 Americans.  Sounds impressive, doesn’t it?  That is until you learn that Apple’s products are made by Hon Hai Precision Industry in China.  Hon Hai Precision (AKA Foxconn) employs 250,000 employees to build Apple products.  Do the math – for every 10 Chinese employee, Apple has 1 lone American employee.

Yes, but Julie, that’s because our unions are demanding such hire wages, I hear you say.

Uh, no.  Unions aren’t as powerful as they once were – for one thing – and for another, you don’t believe that a worker on the factory floor deserves a fair wage for his or her work?  I could get into all that anti-union rhetoric, but I’ll save it up for a later article.  In a nutshell, anyone who lays our economic problems at the feet of unions is someone who has never read a business magazine, gone to college or is making millions as a talking head.

The need and greed for high profits is what’s causing the massive overseas drive of American jobs.  And, because there is no moral hazard – such as taxes or tariffs – companies will continue to drain our population of jobs.

And, it is not just the big companies.

I know of a company with less than 1000 employees – right here in southeast Wisconsin – that has a temporary need for one employee.  Rather than hire an American, they’ve contracted a company in India and now an American employee is training an Indian employee over the phone to do this job. And, it isn’t a call center job.  And, there isn’t a union employee in sight.

Really, Julie?

Yes, really.

In conclusion, this economy has just been brewing for the last ten years, we’ve been shedding jobs for a very long time.  Relaxing the regulations on the financial markets has caused the economy to implode and relaxing tariffs and taxes on corporations – especially those that have been cutting American jobs – has finally killed the American dream.  And, no, the government can’t fix all of it and the people who can – CEOs of corporations – don’t want to fix it.  They don’t care.  They’re too busy laughing all the way to the bank.
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