OK, Explain This To Me Like I'm a Complete Idiot because I Don't Get It, Part FORE!!!

[HughBeaumont]

http://www.demos.org/inequality/numbers.cfm

Today’s venture for clarity revolves around a rather puzzling facet of conservative economics, where it is written that:

(In best George Will voice) “In order for competing companies to remain more and more and more and more competitive to compete in today’s ever competitive markets, corporations must competitively search for the most competitively effective and above all, lowest possible costing labor. The displaced labor must, in turn, be ever more competitive themselves. They must be willing to . . . adapt, re-think their directions and career paths. They must be willing to put themselves through four, maybe eight, years of schooling if possible in order to (are you ready) compete in today’s ever-changing econo . . ..”

Er, wait a second, Mr. Bean Counter freak. Where’s the reassurance that their new career isn’t going to follow the previous ones offshore?

“(hrrrrrmpgh) Well, there isn’t . . . you do research, or develop hindsight . . . look, life is full of risks. The reality of LIFE is you have to be willing to take risks in order to be . . . competitive.”

:eyes: Well, that’s stupendously empty. Whatever . . . how exactly does the “displaced labor” pay their bills, much less for the schooling for this supposedly secure career field, in the meantime? Are we assuming they have several thousand dollars tucked under their mattresses?

“Wal Mart’s hiring. So’s Target! So’s Red Robin! I see “Help Wanted” signs everywhere! A job’s a job’s a job! Rugged individualism . . . personal responsibility . . . move to service economy . . . adapt or die . . . and all that . . .”

Hooooooooooo-kay. You know, because THAT’ll cover the rent and utilities. :eyes: Yeah, so going back to that whole “lowest possible costing labor” thing . . . are you saying that American labor is too expensive?

“Absolutely. Expensive as an AIG bailout! Sheesh! Icky poo! How do you expect the corporations to pay for these ridiculously high American wages and still make a profit? How do you expect them to be co . . . “

“Competitive” blah blah blah, right. See, that’d be correct if you were trying to sell that Forbesian chestnut to your Teabagger moran lobotomy patients. The reality is that it’s a baldfaced LIE. The American wage in real dollars hasn’t risen since 1979.



Here is a chart of real change in family income from the post-War boom of 1947-1979. Pretty even distribution, with the upper percentile a little below the rest thanks to their higher tax rates at the time. It seems that the slow, boring way (Regulation and a progressive tax system) led to steady economic expansion and a great manufacturing base, which in turn leads to more participants in your consumer based economy.

And now arriveth the horrorshow known as Reaganomics:



As you can see, the wealthy, thanks to Reagan’s ridiculous tax redistribution (among other methods of gladhanding the wealthy and screwing the lower percentile), saw their after-tax incomes rise exponentially, while ours . . . pretty much remained on the same level throughout: stagnant. As tax burden shifted in favor of the upper 5%, all of the risk and loss shifted onto US. Pretty soon, companies didn’t see the need to follow the sacred tenet of “paying your workers so they can afford your products”, which in turn led to this:



Wowzers. Talk about Flatliners. Here are some more sobering stats for production and non-supervisory workers (mind you, all figures are in 2005 dollars):



Remember also that between 1947 and 1979, the dollar bought far more than it does now. Homes were about 1.5 to two times that of the average income, there were no McMansions and products had a far longer shelf life than today’s disposable Chinese trinkets. Regulation and a progressive tax rate assured a steady and most importantly a balanced economy.

So what this graph shows us is that from 1979 to 2005, the average wage (in 2005 dollars) rose thirty-three cents. In 26 years.

New data from Stephen Greenhouse’s book The Big Squeeze shows that wage decreasing even further in 2008; the average worker now actually makes LESS than they did in 1979. As pointed out earlier in another thread, when wages are flat, the consumer, to make up for it, has to go into debt to be able to afford housing, health care expenses, education, various necessities, etc.

And what does that lead to, among other things? THIS:



The savings rate, thanks to rampant joblessness (a product of Friedman economics), a soaring cost of living, “free markets/free trade”, no universal health care and above all, a flat wage expected to pay for it all, has gone negative for the first time in decades.

Retire? Yeah. Good luck on that one. “Pay yourself first”? OK, so . . . do I not eat or skip the mortgage this month?

So let me see if I got this right. Conservative economists expect the economy to recover by paying Americans (you know, the ones that are still lucky enough to be employed) a consistently inadequate wage; one that’s relatively the same amount no matter WHAT year it is, for decades. . . and you expect this flat lining wage to cover everything from mortgage to car repairs to health care costs to groceries and retirement savings and many other things that are only going up in cost? You expect your workers to be happy with playing employment musical chairs, costing them money, stress and time and corporations’ money and time thanks to adaptation for new hires? You expect them to be able to buy your products so you can remain in business? You actually expect, after all of this you’re laying on them, to be a regular participant in this house of cards economy?

Seriously … logically explain to me how that works.



OK, so since he’s dead, can someone explain this to me like I’m a COMPLETE idiot because I don’t get it?

How does cutting the legs off of the wage earner help the wage payer? How in Gawd’s name does this help the economy??

[Sinistrous]

1. For Pete's sake, folks, let's get this post recommended!

[HughBeaumont]

3. Good luck on that.

Controversial opinion puts asses in the seats, not "preaching to the choir". That's why many of my threads die fast deaths.

[HughBeaumont]

17. See what I mean?

[Dragonfli]

2. Conservative economics is a religion

It is not fact based but faith based. The "faithful" believe this will help the economy - overflowing the pockets of the most wealthy while reducing 98% of the rest of the population to poverty.

Absurd yes. Incorrect of course.
It is faith and not reason that makes them believe you can have a good economy while most of the population can't afford to purchase goods and services.

Every time this religion becomes popular - it fails, yet faith requires that they find scapegoats of "non-believers" to blame for the failure rather than face the truth that their religion is a lie.

You are looking for a rational explanation where none exists.

Religious fanatics require only faith and the ability to enforce their beliefs on the rest of us and have no use for reason.

[HughBeaumont]

7. No, I WANT their idea of a rational explanation . . .

. . . for the sole purpose of getting the results in the .gif above! :rofl:

Yes, the religion of supply-side economics is a powerful and dangerously destructive one. What other faith could inspire (allegedly) a quarter of a million fanatics nationwide to protest . . . er . . . well, what exactly they were protesting I'm not quite sure . . . but they were all out there against their best interests and those of the country.

It sets a really bad precedent when the sans cullottes defend the Aristocracy with such fervor.

[rhett o rick]

11. conservative economics is an oxymoran. nm

[Norquist Nemesis]

28. Con economics means that the govnerment gives you a salary raise

by giving a tax cut, thereby relieving the employer from having to raise wages and thus more profit for the company to flow to the "risk-takers" (top).

[truedelphi]

4. K & R. Loving your statement

are you saying that American labor is too expensive?

“Absolutely. Expensive as a Wells Fargo bailout! Sheesh! Icky poo! How do you expect the corporations to pay for these ridiculously high American wages and still make a profit? How do you expect them to be co . . . “

These fuckers are systematically destroying our nation.

While we mesmerize ourselves over the notion that First Dog Bo is so cute.

One side note - I don't know that Wells Fargo has received any Bailout Funds - they were in much better shape than other banks late last year. But there are more than enough names for other banks to plug into that hole.

[HughBeaumont]

10. And edited. Thank you.

I could have sworn Wells got bailout money. So many banks, such little accountability, and all that . . .

[truedelphi]

14. It's easier to "edit" someone else's posts

The flurry/nervousness etcvof posting makes mistakes harder for the author to see.


And not only was Wells one of the few profitable banks last year, the Bush government tried to prevent them getting to take over Wachovia. Bush's buddies wanted Citibank to have it instead, even though Citi was in bad shape.

Twenty years ago such policies would have had conservatives saying this is like the Politboro. But not now.

[JDPriestly]

47. Friend of mine called me shortly after the bail-out was announced

and told me that Wells Fargo had contacted her to get her a different mortgage. Maybe they responded differently to the crisis than some of the piggier banks.

[leftstreet]

5. hehe, your last graph is shaped like an upside down guillotine

}(

sorta

[malaise]

6. Great post

K & R

[Hannah Bell]

8. k/r - this is *the* issue, globally. too much money & power in too few hands.

most other ills stem from it.

[Junkdrawer]

9. That's what the Credit Bubble was for, silly. Unfortunately, bubbles burst.

So now we have a world full of factories manned with slave laborers that can't afford the products they produce.

I'm thinking that "How do we create our own INTERNAL markets?" is being kicked around a lot in Chinese government circles nowadays

[glitch]

19. That is a good question. Buy Local implies this, but take a look at transition towns

http://www.transitiontowns.org/

[rhett o rick]

12. Like to see superimposed on the personal savings rate graph, personal debt. nm

[robdogbucky]

13. Thanks Hugh

I'm relatively new here and am wondering how to K&R? Or is that just an expression to look for that indicates especially good threads?

I like the link. The EPI always has good stuff. The best to use for wingnutters though is straight up US govt. stats and graphs, hence the US Census Bureau stuff and the like is the best. Much of the factual stuff is now so historical it is hard to deny and obfuscate with their propaganda. Of course that does not stop them from then asserting it is all a liberal bureaucratic lie and coverup, etc.

I argued recently with a wingnut on another site, that is totally anti-union and in discussions about Detroit, the bailouts or lack thereof for some and not others, he asserted that until the auto manufacturers crush the unions they would never prosper and compete again. I simply looked up the history of GM and it showed glaringly how management has booted the pooch for the last 30 or so years. Of course, I used some Wikipedia references and you guessed it, even though the data was linked, he opined that Wikidpedia is notoriously unreliable. I was searching for stuff about inflation vs oil prices. He had made the statement (I think he is only around 30 years old, so...) that the long gas lines, shortages and the Arab oil embargo of 1973 were due to excessive US regulations. That was relatively easy to disprove, but some of these folks, especially those that have only been sentient since the Reagan years and have been totally conditioned to certain business oriented mantras, are impossible to have any real debate with.

He has called me every name in the book at this point, commie, socialist, jackass, far left radical fear-monger, idiot, etc. His latest gem was that global warming is 95% radical left hysteria and 5% minor weather trend changes. I think we have the foot in the door on that one. Cripes, it is funny though. The extent of brainwashing is scary.

Threads like this are what make DU the best.


robdogbucky

[HughBeaumont]

15. Give 'em facts, and personal attacks are all they'll throw back.

Because they got NOTHING.

This Friedman economic tenderpile is owned lock, stock and barrel by Republicans and neo-lib weasels. One of the best signs from the counter-protestors at the tea parties read "Have you forgotten who got us in Hot Water . . . and you want to make TEA?"

As pointed out above, Reaganomics is religion. Religion doesn't need reason, it only needs faith. Religion doesn't need figures, it only needs a bunch of people who share the same brain to continue the fool-osophy to the nth degree. It only needs a charismatic and kindly face to spew the bullshit. You have that (as conservatives did with Reagan and Bush II), and you'll be able to sell the slobberers the rope to hang themselves with.

And as the past 28 years have proven, self-operating nooses were a seemingly popular item.

Welcome to DU.

[unpossibles]

25. welcome, Rob - I agree

And sadly I've been in the same discussion on the other side of the country with a guy (who ironically is IN a union) who blames the unions and the consumers and everyone except management for the failures we're seeing now. It's insane. I truly think the problem behind all of these misinformed and self-defeating souls is that they all get the same propaganda; some from radio, some from mainstream "news" like FOX.

They've been conditioned by a daily dose of hate for the past decade or so, mixed with a religious fervor worship of Supply Side Reagan, and throw in a dash of left over McCarthyism, and voila! They'll argue til they're blue in the face to defend policies which actually hurt them. Remember when people made fun of supply side economics? It's amazing how much it's embraced now, despite evidence of it not being a very good or sustainable model.

[DUlover2909]

34. Welcome to DU!

:hi: I would first suggest that you stop wasting your time arguing with freepers and idiots on other sites. There's no getting through to them. No matter what you do they are too eaten up by their stupidity, arrogance, and ego to listen to facts. Sometimes I have fun messing with them on The Young Turks Youtube videos by just being childish and making fun of them. They'll call you every name their tiny brain can come up with. Try asking them fun questions like, "How does it make you feel knowing that your hard earned tax dollars are being taken from you by liberals in the White House and Congress?" Just push their buttons a little, sit back, and enjoy. This is our time. They're the losers. Soak it up.

[emmadoggy]

38. Welcome to DU.

To "K & R" means to "kick" & "recommend". To "Rec" a post click on the "Recommend" link at the bottom left of the OP. Once a post reaches 5 Recs it goes to the Greatest page. You automatically "kick" the post back to the top of the forum listing simply by making a reply to the thread.

Oh, and I totally agree with the last line of your post.


:hi:

[Laelth]

16. Brilliant. n/t

:dem:

-Laelth

[glitch]

18. Crikey! We all know the numbers but seeing them makes the argument starkly irrefutable.

Excellent post, K & R. Thank you.

[dgibby]

20. It doesn't help the economy, nor is it designed to do so.

In order for globalization/free trade to work, there must be a level playing field. Since it's impossible to bring 3rd world economies up to par with us, it's necessary to drag us down in order to be on par with them. Unfortunately, both the middle class and our present standard of living will disappear in the process, and the rich will get a whole lot richer.

[Political Heretic]

21. Thank you for this post! You are my partner in Political Economy :)

I've been trying to get people to pay attention to numbers like this for years. I'm sure you have too. Thank you for taking the time to post.

Incidentally, I often take many of my statistics from the most excellent State of Working American report, released bi-annually by the wonderful Economic Policy Institute.

http://www.stateofworkingamerica.org/index.html

Thank you again for this. I've clipped it in evernote, saving all the graphs and links, for the future.

Kick and Rec.

[Political Heretic]

22. Here's the most rational explanation you can get for defending this:

Basically, if someone is going to (1) not lie and (2) provide a rational defense, it basically must go like this:

Conservative economic policy is not designed around the same goals that you are assuming as you present your information. Namely, it is not designed around the goal of long term social economic well-being and prosperity.

Conservative economic policy is highly effective at is actual goals: achieving short-term exponential wealth gains for a tiny class of highly privileged individuals. Following models such as these, in a matter of ten, twenty, even thirty years (not long in the larger scheme of things) a small number of people can achieve wealth beyond all possible imagination and then "exit" the system before its collapse. Thus the people that benefit need not be concerned about the declining conditions for the rest of society, or even be concerned about an impending collapse, because they've already gotten in, robbed the system, and gotten out.

That's not a flawed system - its a system working exactly as it was intended to work - only with different goals than you have.

[HughBeaumont]

30. So in other words, it's all in how "success" is defined.

As in "Waaaalllll, we never said our brand of economics would be successful for YOU."

Yet, for those idjits who continually buy into their supply-side horseshit and continue to believe it's going to work for them, it becomes a matter of "how many times are you going to get hit with that paddle before your bent-over ass stops saying 'thank you sir, may I have another'?" When do they finally realize their Horatio Alger nonsense they bought into isn't ever going to work for them?

It's amazing how people believe a system that assumes the wealthy to be benevolent, cost of living and goods to never go up, raises to be steady and life to be without landmines will work for everyone when 28 years (or 400 years, depending on which historian you ask) of this garbage has proven the exact opposite so far.

[Political Heretic]

42. They all believe in the "American Dream"

That they will be rich one day.

That's partly why they keep supporting policies that hurt them... false consciousness

[RaleighNCDUer]

43. Like a ponzi scheme, IOW. nt

[ms liberty]

23. Wow...nice work HB, and thanks...KR&B - n/t

[xchrom]

24. recommend -- you mean trade policies should reflect the best interests of the citizens?

how -- um -- er -- novel!

:wow:

[wroberts189]

26. Good question: You cannot get it because simply put conservative logic is just lies and spin.

They change their arguments to fit whatever position they want evan if they have to do a 180 and contradict themselves.

No lie is big enough ..matter a fact the bigger the better. Does not matter if yesterday they were for what they are now against. They got the media to tell you the new "reality"


Your not an idiot ...you just getting treated like one by the media

knr

[Mithreal]

27. K&R Workers are seen as costs rather than assets. nt

[HughBeaumont]

32. America takes it's economy as seriously as it takes it's workers.

This is why I can never subscribe to conservative economics. It's theoretically flawed and disastrous in practice. Without a living wage or manufacturing, this economy will go no place. Companies only think about bottom lines and don't seem to get that it isn't about that anymore.

Does "profit above all" have to mean "profit above the Big Picture" or "profit at the risk of the economy itself"?

[autorank]

29. An answer to your question (outstandingi post btw, brilliant actually)

How does cutting the legs off of the wage earner help the wage payer? How in Gawd’s name does this help the economy??

You presume the possibility of a rational answer.

Look at this;)

[DemReadingDU]

36. Twilight Zone

You unlock this door with the key of imagination. Beyond it is another dimension: a dimension of sound, a dimension of sight, a dimension of mind. You're moving into a land of both shadow and substance, of things and ideas; you've just crossed over into the Twilight Zone.
http://tinyurl.com/9644sl

[autorank]

53. It's starting to feel like we're in that space

Although they've added The Matrix. The complete control system.

Hey check out a web page I put together on William K Black. I'm going to update
it regularly with anything new that comes out.

William K Black

[DemReadingDU]

55. That's great

I saw William Black on Bill Moyers a couple weeks ago. We need more people like him to speak out. I've bookmarked your Money Party site, lots of great info there, Thanks!

[Butch350]

31. You saying...I won't buy a car - it may go out of style?

[phillyindependent]

33. This is just a little more food for thought....

historical mortgage rates.....not sure how i would afford a house at 18%

[baldguy]

35. It's a swindle - and the cons only care enough to seperate the mark from his money.

[gtar100]

37. K&R

Well, except for the guy's head exploding. That's kinda gross.

But the information you've posted is important and very eye-opening. I can't help thinking that so many who voted and rah-rah'd for Reagan back in 1980 are also now being squeezed by the idiotic policies they thought would make them filthy rich. But how many actually recognize it since they've been taught so well to blame their hard times on liberals, gays, and abortion.

[L0oniX]

39. Yea I'll compete when my cost of living goes down with my paycheck.

[valerief]

40. Conservative economics is a collection of bromides for the masses to

ensure they don't interfere with the goal of making the rich ever richer. That's all it is.

[emmadoggy]

41. "Are you sure you want to recommend this post?"

Yep, I'm pretty damn sure!

K & R for an excellent post.

[area51]

44. Always enjoy your posts, HB.

:thumbsup:

[BlancheSplanchnik]

45. Another K&R here. OUTSTANDING!!

and very educational!!!!!

Thank You; I had no idea of the actual big picture.

Bookmarking

[cliffordu]

46. K&R.

[dflprincess]

48. He didnt' mention how the serfs would be able to pay for

the 4-8 additional years of school, did he?

[EJSTES2005]

49. Not too difficult to

figure out. It's called the systematic elimination of the greatest middle class this world has ever seen.

[Enthusiast]

50. K&R. Hugh, since the days of

Leave It to Beaver I've thought of you as a bright guy. Nice OP.

When my son was young he was under the impression that 'Leave It' was Theodore's name. Really. My son was our very own version of the Beaver.

[Quantess]

51. So recommended.

[tclambert]

52. Okay, let me explain. The lowest costing labor is slave labor.

And that is your corporate ideal. Well, if you add in mandatory execution of retirees. Paying pensions for no work is clearly uncompetitive.

[Cresent City Kid]

54. Boom & Bust is totally busted

Conservative economics is like a bar owner watering down the liquor. You start with a full bottle, and when you sell half the bottle, you top it off with water. When that bottle is half-gone, you repeat the process, and then again until it's almost all water. As you can see, this is unsustainable because at some point nobody's drinking at your place anymore. This is why the whole thing blew up in their faces before the election. It became obvious that they were over-reaching when there was nothing left to reach for.

If they were logical about what they're doing, they would give a little back from the people they stole from so there would be something left to steal. They only know they want more, blind to the fact that there is no more. They are as logical as a squirrel who eats a whole winter's worth of nuts in one sitting. Great meal, what's for dinner tomorrow?

[DemReadingDU]

56. Exactly

They have it all, nothing's left for us. And they don't realize they still need us. It's going to get ugly.

[HughBeaumont]

57. Unless we get off of this slow train into the chasm . . .

. . . the boom/bubble/CRASH pattern is going to happen in guaranteed succession every five years. The whole easy credit mess stemmed from the fact that, again, those in power didn't want to raise our wages all this time. Bill Clinton, much of a free trader as he was, made the statement once that "when we all do well, we ALL do well." Even he recognized the value of a steadier economy, gainful employment and increasing wages, despite OK'ing some really bad conservative policies along the way.

We cannot continue to straddle the fence of Friedman disaster capitalism. It does not work, much as conservative spinmeisters and revisionists want it to be so.