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Economic theory, which is basically bullshit, is often coached in mathmatical terms to disguise the fact that it is pure bull. However there are some very simple concepts which make very good common sense, and if one looks at that, instead of how to use current data to justify one’s action politically, one comes up with obvious surprising results.
Labor Demand < Labor Supply
That is why so many people are out of work. Now here are the players.
- Workforce Market
- Corporations
- Commodity Market
- Foreign Investments
- Financial Markets
- Households
- Government
Government is our last option.
So our workforce if we compare the same counting today as was during the Great Depression, is running at 85% capacity. Meaning 15% are unemployed.
Going down the list then,
Corporations are at their best ever. Corporate profit the highest percent of GDP ever.
Financial Markets also are at their best ever. Dow Jones is at record highs.
Commodities are performing well, all indications are of a long term bull market.
Foreign Investment is at an all time high. Never have we had this much outside money.
Real Household Income is declining. We are headed downwards and are currently tied with 1994 as it rose out of the 91 recession, and prior to that, tied with 1984 as we were coming out of the 1982 Recession.
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Bottom line with government out our equation, we have the investment side of our economy all doing spectacularly well, and the household side going down.
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Proof enough that the free market system, or capitalist system does little for the good of any nation, just as little good it did prior to the legislation that became law after the crash of 1929 when Democrats swept the Federal Government.
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Government is the great equalizer. For a fix, government needs to step up and side with We the people (or households), and as a referee would in any sporting event, make the playing field fair.
It can to it in either of two ways. It can impose necessary restrictions upon businesses which increase their demand for labor at the expense of their corporate profits. For example, pass legislation to imprison CEO’s for malfeasance. Only then in order to keep their heads out of hot water, they hire environmentalists, social engineers, accountants, and other highly trained personnel whose prime function is to make sure the company is not doing anything shady.
It can also split the corporations into multiple smaller ones, each now requiring a new president, several new vice presidents, new HR’s, new financial planners, etc and with one fell swoop, increase the demand for labor. This too, comes at the expense of corporate profits, which are currently huge primarily due to economies of scale.
And it can indirectly create demand by raising taxes. When taxes go up on profit- earned, less profit gets earned by design; less “reported” profit, less money handed over in taxes.. Meaning the bulk of that money is now spent being reinvested into the business just so it can’t be taxed. Building projects, higher wages, more R&D gets spent into the economy, This too, comes at the expense of corporate profits on the books.
But that is why higher tax rates are actually the best alternative. Higher tax rates tend to create less taxes, so government still needs to stay small. The revenue collected is lower for the simple reason that if there was absolutely no tax, all the money earned would belong to me. But if more of what I earn goes to you, then I will figure out a legal way to keep more for myself, and report less. So whereas as tax rates go up, total tax revenue comes down; the net effect is that more money goes into our economy thereby creating more demand.
The demand for labor then gradually rises to equal the supply and if it continues on its upward path, yes, yes, so there are more jobs than workers, then competition begins pushing the individual wage rates higher.
Which adds to the increased demand.
Using tax rates works best for now instead of the government interfering with day to day operations of all businesses, it actually creates an environment where each business can operate independently to its own best interest, and as they do, the demand for labor rises even more…..
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Anyone who argues for less government input into the economy is in the wrong century and can’t read economic figures that are plain as day. So how does one interpret the cries for less regulations that are hurting corporate profits? Easily. One realizes that sooner or later corporate profits have no choice but to fall, so our household income can increase. Loss of corporate profits is a “good thing”.
One should mention in the same breath, that labor’s percent of wages is deteriorating all across the world. It is a world wide phenomenon. The answer is simply that deference of all governments over the past decade and a quarter, has been given to those in charge of investment.
Policies favoring Investment must now take a back seat to those which put people back to work, which if done, raise the incomes of all of us… Even those of the 1% , though not as much as they have been lately been accustomed. But everyone still benefits.
Raising taxes is where we need to go.
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The city of Newark has been trying to do it’s part in controlling misbehavior that occurs after drinking.
Townspeople have railed at them for not getting University of Delaware students to behave, and so they instituted a policy that holds business owners responsible, when and if they are deemed to run a disreputable business.
Although that may sound good to people who hate fun and drinking, it may not bode well for businesses considering setting up an establishment in Newark.
“Good”, some Council members say: “we don’t want their kind here anyway”. And they may have a couple of residents who will back them up… After all, Grotto’s belongs at the beach. Get rid of it on Main Street; they serve beer… Let’s get rid of all the Grotto’s while we’re at it! No one likes their pizza anyway.
Unbeknown to every Newark business, this law is in the books of Newark’s code.
For residents who are tired of loud behavior, that is a breath of fresh air. Now, they may finally get relief from those college students peeing in their bushes…
However, for a business, there is no set level that must take effect, before the implementation of the following penalties. It’s as if your boot camp drill instructor stood you at attention and told you that if you moved in the slightest, he/she would slam you with a baseball bat… With no parameters set, no time limit given, eventually you shuffle, and BAM, right into the back of your medulla….
Last Wednesday, at an well known established on Main Street, two girls got into a bitch yip. They were quickly ushered out of the building by management and employees. Calm was restored. But some random person called the police, who arrived after the incident was over. They arrested the two girls who were still hanging around outside, and then came in, handcuffed the assistant manager, and took them all to the police station, where they charged the girls with disorderly conduct, and the manager for running a disreputable business… Grottos… a disreputable business?… Has everyone on Newark’s council lost their mind?
A business is open to the public. A business can’t be responsible for every individual. No matter how much they try, they can’t be! They CAN be responsible for having systems in place, ones that that can be initiated if and when such a random unforeseen acts were to occur… But in this case, through a random system of events, an assistant manager is now going to have to pay at least 10% of his yearly income, hopefully put up by his company, to fight these charges. 10% of his income… His crime? He was scheduled to work that night… That’s it…
Or let’s put this irrationality in in a different way: it’s a given that Newark’s police are charged with policing the town. It’s also a given that City Council is the party responsible for all the laws made by the town. Check out this law.
302.9.3 Notice. Notice shall be as specified in this chapter. Notice to remove graffiti shall specify that it is unlawful for the owner or anyone who has primary responsibility for control of the property, or for maintenance or repair of the property, to permit property that is defaced with graffiti to remain defaced beyond a period of 10 days after service of notice as specified in this chapter.
Currently there is graffiti on property owned by the City of Newark.. The person ultimately responsible for that property, would be the acting manager, which in this case would be the mayor, and members of the City Council. They are the elected officials held accountable for the running of the city. As we can see, here is evidence that they broke the above statute by allowing a single individual to deface their property.
Under the same principals which they are applying to the business which silenced a girl spat, they, the mayor and council, as well as the police chief just for good measure, should be arrested by the citizens of Newark, and charged for violating these clauses listed above.. They too should get an arrest record, they too should be personally assessed court costs and lawyers fees, and they too, should suffer economic hardship, just because they happened to be he mayor and council at that time of the spray painting….
LAUGHABLE? EXACTLY!
If Newark is going to hold businesses accountable for every little detail written in code, then they need to hold themselves accountable as well. They too need to be arrested, because some individual over which they had no control, did not know how to behave…
“They ( mayor and council)… should have prevented it”, the towns people say… “Throw the mayor and council in jail”..
Bottom line, this type of adherence to the law is stupid. The municipal code needs to be modified before a conglomeration of businesses start filing suit against every police officer, every desk supervisor, every chief of police, every council member and even the mayor. They are open to personal suit, because the business from which the manager was arrested, actually did what the law implied. They stopped the fighting, shut it down, before anything serious happened… One would think from the reading of the law, that is how they would abide by it in that given situation. But no….
Now some random employee, will have to go to court, and if the judge is not reasonable, (which has been known to happen in small towns), he could forever have the stigma of a misguided police force, attached to his name…
The stupidity is not in the intent… The stupidity is the the implementation… There is no filter.
If what’s good for the goose is good for the gander… throw these elected bums into jail……
kavips 