Forum Post: How to save our economy?
Posted 11 years ago on May 9, 2012, 11:57 p.m. EST by francismjenkins
(3713)
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Over 40,000 factories have closed since 2000 (loss of nearly 6 million jobs, if we include the manufacturing multiplier, the losses total between 15 and 18 million jobs), not because the products they were producing became obsolete, but rather because they couldn't compete against third world sweat shops that use child labor (I mean, who could possibly compete against such a thing)? We need a value added tax, like every other developed nation on earth, to help our manufacturers, and here's an idea to reopen many of the factories we've lost. Studies have shown employee owned companies are more productive compared to their conventional counterparts (and they survive longer). Why not have a stimulus plan that provides funding to reopen these factories under an employee ownership model? No more worries about finding shovel ready projects, no more worries about how big the multiplier will be (whether the Keynesian multiplier exists or not, we "know" the manufacturing multiplier exists), and the best part is, these would be permanent jobs (not temporary stimulus jobs).
We need to create something like 16 or 17 million jobs to normalize unemployment levels. That's a huge undertaking, but this idea could potentially get us half way home (I don't assume that we could recapture all those lost jobs, but recapturing half of those jobs is feasible).
With a few other measures, we could truly reverse our fortunes. We need to expand our public university systems, we need to heavily invest in alternative energy (and a new electrical grid), something like 70,000 of our bridges are in need of repair or replacement, etc.
We could also aggressively hit the demand side with a homeowner and student loan bailout plan. This is obviously more controversial (not that everything I listed above isn't controversial, but the idea of forgiving debt just drives conservatives crazy, unless of course it's big banks we're bailing out, then conservatives will be stumbling all over themselves trying to scare us into believing the sky will fall if we don't bail out their bankster buddies ... but I digress).
Our debt needs some TLC as well, but the time for austerity is not in the middle of a recession. We could just let the Bush tax cuts expire, there's plenty of fat we could cut from the military budget (by closing unneeded overseas bases), we could pass the Buffet rule, we could restore the middle class tax cuts, provided we had a value added tax to replace the revenue, and anyway, the easiest way to lower our debt to GNP ratio, is to increase GNP.
Good post, didn't the GM deal end up with some empolyees ownership?
I'm not sure really ... if it did, then great (but again, I'm not aware of anything like this)?
Francis, please put your ideas on http://the99percentvotes.com. I just launched this website to organize discussion and voting on our public policy proposals.
Topics you've mentioned:
These all fit within the policy categories/subcategories on the website. I encourage you to make specific proposals regarding these things.
Thanks, Greg Orr
I know I would never buy american, bunch of robbers in this country, I mean who can afford it really? Im practically 50 and never could afford a home even. You people deserve whats coming to you... "For then shall be great tribulation, such as was not since the beginning of the world to this time, no, nor ever shall be Mathew 24:21. You deserve this America!
"Over 40,000 factories have closed since 2000 (loss of nearly 6 million jobs, if we include the manufacturing multiplier, the losses total between 15 and 18 million jobs), not because the products they were producing became obsolete, but rather because they couldn't compete against third world sweat shops that use child labor (I mean, who could possibly compete against such a thing)?"
We'll never be able to compete against that, unless we are forced into serfdom or indentured servitude. What about a tariff on Chinese-produced goods?
"We need to expand our public university systems, we need to heavily invest in alternative energy (and a new electrical grid), something like 70,000 of our bridges are in need of repair or replacement, etc."
In other words, there's more than enough work to go around for a new public works project. Of course the people currently in office don't have the cajones to propose such a thing.
Please put your ideas on http://the99percentvotes.com. This is a website I just launched last week to organize discussion and voting on public policy proposals. The tariff and other ideas you've suggested here are well worth considering.
That's the function a value added tax can serve (depending on how we structure it). For instance, we could have a "cottage industry" exemption (and get away with it under WTO rules). This effectively makes the VAT like a tariff.
Please put the VAT idea on http://the99percentvotes.com to get feedback on it (arguments, discussion, and voting).
Is this issue ripe for a popular vote? I mean, how many people are informed about this issue, and all the relevant ancillary issues, in an adequately sophisticated way? The idea obviously must be voted on at some point (or at least hopefully), but without proper information, people tend to default to what they perceive as their self interest.
Sure. In accordance with public awareness, not all ideas will get as much attention as others. But my website can be a location to increase awareness with information, argument, and discussion. The website is not just for vote-ready proposals; it is also a place to incubate with smaller groups of interested people.
I just bookmarked the page, and took a look at it. When I select "more info" .... there doesn't seem to be very much space to provide detailed information? I mean, this idea is different than say ending the death penalty. The death penalty is a straightforward moral issue, whereas this issue requires in depth economic analysis, but I do appreciate the resource (and I'll try to generate something). I see there's an argument & counterargument space (hopefully there's not character number limitations that make putting forward a substantive argument overly cumbersome).
I just launched this website, and design details could change. Currently the high-level summary is 120-char limit to be compatible with twitter. The "full description" limit is 1000 characters. Then there can be as many arguments and further comments as you like. If you have ideas for how it should be designed differently, you can suggest at http://dev.the99percentvotes.com
I hope to see you on the site. Thanks for checking it out.
I could remove or greatly increase description, argument, and comment character limits.
Its posts such as these that both sadden and illuminate both the terrible dysfunction and reasons why so many are frustrated with the world as it is. FrancisJ clearly has put time thinking into this but his deficient intellect or education (or perhaps both) , has him utterly missing the forest for the trees, as is the case with people not educated in hard science or rigorous degrees.
The factories in question can be bought for pennies on the dollar. Capitalism is anything if not efficient, and a tool such as a factory would have been bought and recycled, if in fact the tool was useful. The hard truth, (if you were schooled in rigorous thinking you would understand, but alas rigor escapes you) is that the product the shuttered plant made can be made elsewhere for a much lower cost. A union could EASILY reopen a nut and bolt factory, but the wages would have to approximate those being paid overseas. Creative destruction is cleansing but harsh. Reopening a tool and die factory at union scale doesnt solve the lack of competitiveness union wages create.
Yet, while I'm pursuing a grad degree in molecular bio, already have a law degree, and my undergrad major was finance for crying out loud .... you're talking some lofty shit.
Rigor, where's your studies, statistical reports, analysis (besides bare assertions)? I can readily provide rigorous, peer reviewed reports regarding the efficiency of employee owned companies (and their superior performance compared to conventional companies). What can you provide, besides bullshit? I will gladly challenge your aptitude in economics and finance anytime you wish.
I mean, do you even have a college degree? If so, what was your major? How far did you get? Where did you learn the term creative destruction from (such a retro term, sounds like you watched Gordon Gekko one too many times :))?
I know someone that sounds like you. Took a few college classes, read Road to Serfdom, now he fancies himself an academic economist. Did you even manage to get through a whole book?
Then if all you say is true, you should know the issue is low foreign wages and ease of doing business overseas and not lack of investment money to rehab shuttered factories.
I mean honestly, what kind of education have you received if you think America lacks investment capital, whether public or private? Its pathetic for someone learned to post such a foolish idea. Any publically traded company can easily be purchased by its employees and would be, if it were a smart buy.
Please post your peer reviewed research that shows employee owned companies are consistently better than publically traded companies.
Here's a good place to start:
http://www.nceo.org/articles/research-employee-ownership-corporate-performance
And no, I didn't say America lacked investment capital anywhere in my OP. However, employees cannot just unilaterally make a public company employee owned, moreover, I'm not talking about existing companies anyway (I'm talking about closed down factories). There's no profit incentive for investors to funnel capital into these sort of projects, so notwithstanding how well employee companies perform, there's no vehicle to fund this sort of thing.
This is where government comes in, the government that's supposed to be serving the people. You can look at it this way, combined with other ideas (like allowing recall elections & promoting more participatory democracy) it's sort of a "decentralization" program. Ultimately, we'd want only as much government as we need, but mine is a libertarianism with a social orientation. If we simply dismantled government without first ensuring that robust and "working" alternatives were in place ... we really would get chaos, or a very dark world of exuberant wealth, extreme poverty, and nothing in between. There is really no natural mechanism supporting the middle class, besides collective action.
At the end of it .... ideally, we'd have a government truly "by the people" (not a top down plutocracy).
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At least employee own companies won't have executive taking exorbitant salaries and bonuses. There will be more for the people who do the real work! Support OWS. Vote out union busting republicans
Also loan forgiveness is idiotic. You should know that. The best thing is to let the market find a bottom, let the market clear over bought real estate and get people out of homes they cant afford to service or keep repaired. Universal home ownership was a bad, bad policy and if you study econ, you should know that a vibrant economy should have a general mix of 50% owners and 50% renters.Home ownership has significant risk to it, and large portions of a population cant manage that risk.
And do you even proof what you write? How in the heck would adding a VAT not be crushing to household income? Europe has the VAT, and Europe is again going backwards economically. Europe has a productivity problem, not a tax problem. Well they do have a tax problem, taxes in Europe are too high and kill productivity.
Central socialized planning virtually never works. It always mis allocates resources.
Unfortunately, you're lumping to many things under the same banner. I agree, centralized planning is disastrous (it doesn't work, and I think that's been adequately demonstrated through time). However, a financing program for employee owned companies is NOT centralized planning, indeed, it's the exact opposite. As we're now learning, centralized planning can become just as pervasive and destructive in the private sector as it is in the public sector.
Moreover, you're basing your assumptions on a static society (assuming there's certain things that just can't change, and we'll always need things like a 50/50 owner/renter ratio). That, I'm afraid to say, is just ludicrous. First, our economic statistics don't go back very far, and we did not emerge from the primordial soup as renters and owners (therefore you don't have a rigorous statistical basis to say this dynamic forms some part of our innate nature). But secondly, and more profoundly, you're not asking the most important question, why is it that some people don't do a good job of managing their lives? I should say, the millions of people who lost their jobs to overseas sweat shops were by and large people who were managing their lives just fine. However, as a separate issue, there are indeed many people who do not fall into this category ... but rather than assuming as a foregone conclusion that this comprises some immutable aspect of human nature, we ought to be asking ourselves, how can we improve our society so we minimize this as much as possible?
It's almost always easier and less complicated to assume things can't change, but occupy wall street isn't about expedient solutions (which should be abundantly clear to anyone who's been following this movement). We're about real and lasting solutions. Quite frankly, even if I were looking for easy answers, factors like racism, certain aspects of our economic structure, cultural disparities between regions, etc. are much more explanatory than imagining this is the consequence of some aspect of human nature. Quite frankly, the idea that you pulled some of these views from an academic economics text, is disturbing. There's such a lack of critical thinking, such a one dimensional perspective ... it's just terrible.
Your position has no regard for people. And only considers the market. We don't have to have 50% renters. We do need honest bankers/real estate/mtg/lawyers in a housing market that doesn't prey on the ignorant and poor. Debt forgiveness will put more cash in the hands of the middle class, increase consumer demand, increase employment, increase tax revenue, grow economy, and pay down debt. Come on board, Support OWS, Vote out wall st supporting republicans.
It's becoming clear that Pequod's thoughts are (shall we say) not well organized. It amazes me when people lump Europe into one basket. Forget about the fact that Germany, Norway, and other European countries are doing "much" better than we are (economically), nope, the entire continent of Europe is Greece (oy). These people are so brainwashed, it's no use really (like trying to have a meaningful conversation with a box of rocks).
You gotta stay strong. solidarity!
Germans have a strong work ethic. Now what are the othet LARGE countries that match the US standard of living? Norway is a tiny meaningless country with Arab shiekdom levels of oil wealth. They drill offshore without qualm.
Yup, for every nation that provides an exception to your narrative, there's always some reason that's consistent with the narrative you're trying to spin, explaining why they do well (very similar to religious apologetics). Well, in the case of Norway, maybe a fair analysis, but Germany is just as socialistic as the average EU country. They have a good work ethic, well, so do we. So why do they have such a robust manufacturing sector (as a percent of GNP), while ours is eroding?
There must be something else about German culture that preserves its status as a manufacturing powerhouse? I mean, surely the Chinese also have a good work ethic, and sweat shop labor can most likely produce cheaper goods compared to virtually any other model (particularly in labor intensive manufacturing).
I've seen studies on this. German factories tend to be family owned companies, with generations of tradition, and a strong loyalty to Germany (and their people). This is called solidarity.
It may be true that this sort of dynamic isn't feasible in the United States, but that only means that we should look for more innovative ways to inspire the same kind of solidarity.
Your post is insulting and condescending. Most of all it is wrong. We can have descent wage jobs in manufacturing, without exploiting foreign workers as we allow corp to do. Penalize (Tariffs,value added tax) corps/products that exploit workers, the costs for those products will increase. Reward American corps who hire Americans with tax breaks. You asre just unwilling to help your fellow Americans. Support OWS. Vote out outsource supporting republicans.