Article in The Harvard Crimson, 4/6/05 by Yoshi Tsurumi. Thirty years ago George Bush was his student at Harvard Business School:

http://www.thecrimson.com/article.aspx?ref=506836

As usually Roadster yarn spun a little thin and day late and a dollar short.

That is all!

I also "hail" the so-called "Robber Barons." However, I was unable to read your site. Those men did a lot for our country. They drastically lowered the price of steal, oil, pharmaceuticals, and many other things.

As for their "dastardly" practices, I would suggest The Politically Incorrect Guide to American History. From it, I learned, among other things, that the majority of mergers that Rockefeller made were ones in which he was approached by a smaller company. In fact, a good number of people made a good living starting up small oil refineries and selling them to Standard Oil. As for things like predatory pricing, the book emphasizes that no legal record exists of its occurrence. It also illustrates how impossible it is to make predatory pricing work.

They gave a lot of people work, and lowered the price of consumables for the poor. Hmm....sounds a lot like Wal-Mart to me…

Another truly excellent point made by the book was the government’s role in screwing the everyday American. At the same time politicians were bemoaning evil Big Business, they had a huge tariff in place. This allowed the price of materials from many companies to sky rocket without fear of foreign competition. Insulating our companies from competition is never a good idea. It makes them weak an inefficient. (A good argument for outsourcing).

After reading into the whole situation, I realized that my public education history books were written by the government, and, naturally, they would emphasize the government as a protector from big business. This is not the case.

Incidentally, ADM was recently slammed for price fixing. I think the theory goes "power corrupts." So while there may be no evidence for wrongdoing, and maybe even no wrongdoing at all, that would be a temporary condition. In addition, there is lots of evidence on\f cmopanies engaging in duplicitious action o protect profits. The anti-union wars, for example. The oil companies knew that the lead additive in leaded gasoline was a potent neurotoxin from the gate, but happened the think they might be able to make some profit off of it, anyways. The inventor even went so far as to make a fake press conference where he put his hand it it to show its safety (much like PM Thaksin of Thailand, who, to instill faith in oultry after the bird flu scare had a pres conference where he and his family ate Argentinian chickens. The chicken's nationality, however, was not disclosed in the press conference...


An argument against outsourcing, though, is at what point are the companies no longer "ours"?

I know that cities compete for big factories, giving companies no taxes and even helping to finance the plants on occaision because they know that the tax revenue thy make from the worker's salaries, the convience stores, bowling alley's etc that are built by those workers salaries far more than makes up for the tax on the company itself.

They do not do this because it helps businesses, and businesses should be helped, end of discussion.

This is really the primary beneit from industry for a country / region. why would it be in the nation's interest to forgoe this benefit, and still give tax benefits to the company?

I can certainly see the benefit for business in it, but where is the benefit for the average worker, other than buying cheaper goods?

Does cheaper goods offset the loss of industry?

At what point is the loss of industry complete? Is it the owners nationality that is the sole determinant factor? Do they simply have an address? I'm really curious. What makes a business "ours"? Is BP "ours"? Is FOX News "ours"? Its not Rupert Murdoch's? Whats the difference?

You are right that no company is "ours". It is only ours in a sense that, currently, it provides us with jobs and cheap goods. The ultimate goal in an economy could be argued to be jobs and cheap goods. Outsourcing gives up jobs in the short term with long term market, and thus job, expansion.

Not all foreign companies are all bad. For example, Toyota has a few plants in the US that provide us jobs. But on the whole, because most of their production is done overseas, we have lost those jobs. When companies, foreign or domestic, add more value to other economies than the US, they are not "ours" any longer. That is probably as close as I can get to an exact point.

As I have stated before, there is no need to provide extra incentive to outsource. Either it is feasible, or it is not. However, I'm looking for a reason to give someone a tax break.... Ever been to church? Tax Break. Ever worshipped the devil? Tax Break (although not quite as happily, but still happily).

Bottom line:
Outsourcing helps companies predominantly based in the US maintain US market share, and thus provide jobs to our people instead of another country's.

..sounds about right, or at least as close as I'll be likely to get...

OK - so benefit to the economy is defined by jobs (and modified by wages, no doubt) and cheap goods.

Isn't this kind of like cost / standard of living?

Its got to translate into real human benefits at some point. How does it do that?

I'm not sure that I understand your last post. Having a job and buying things for cheap is the benefit.

Standard of living goes up when you afford to by more necessities and luxuries. More money alongside cheaper goods means more purchasing power. More money left over from purchasing that loaf of bread is more money for healthcare etc.

I would think more real money to spend will go hand in hand with higher standard of living.

Please explain further if I have not drawn the correct lines.

Where is the formula for how good your job is versus how cheap the goods are?

Is there any kind of modification for this with social programs? Tax rate? .e. if someone has free healthcare, wouldn't that fall under the 'cheap goods' catagory? And taxes reduce job quality?

But that has to be qualified with cost of living and what other benefits are provided. It would be a factor, sure, but there would be a large portion at the first part of the graph where there would be a reduction in quality of life in many circumstances, wouldn't there?

I have no formula readily available to illustrate. I merely am stating a sensible idea that larger companies like Wal-Mart provide goods cheaper than your Mom & Pop store. Also, that they are able to give many more people minimum-wage jobs than Mom & Pop.

I would like to add that tax rates and social programs do affect the standard of living, but free healthcare is a myth. "Free" healthcare from the government is the same as walking around your neighborhood and asking for money to pay your medical bills. Someone has to pay. Don't get me wrong, both Democrats and Republicans want universal healthcare, they just disagree on how to achieve it. I would like to see medicine stay privatized, as that is how it has become so great. I think HMOs are a great example as to how "well" the government can handle healthcare. Anyway...back to the topic at hand...

You are right, without a certain tax/spend level of the government, the economy will suffer greatly. This is because a relatively fair playing field has to be enforced by a referee (govt) and laws have to be made and enforced nationally. However, transfer programs, like SS, only shift money around. Also, they take money out of the area where it has the most chance to improve national SOL and places it into a sector with little or no chance to improve the national SOL. On a small degree, I can see this helping a little, if implemented correctly. On a large scale, I don't believe it works at all, especially in the long run.

Le Tonk: Correct me if I'm wrong, but doesn’t France have to revise a lot of its healthcare promises because the system is in financial trouble?

Finally:
Cost of living: price of goods and services.
Cheap goods = low cost of living.
It would follow that, with lower cost of living (due to cheaper goods and services) and more people having jobs, standard of living would rise.

Also to Roadster:

I was finally able to read the article you posted. Yoshi Tsurumi is a demonstrable socialist by his very words. I do not say this to discredit him as he is entitled to his opinions just as I am to mine. However, of course he would say that Bush is evil.

Bush is a capitalist. He doesn't think the government has to watch over everything and provide everyone with everything. Oh....and FDR was a socialist...

We can debate that, but he threw government into the workings of the private sector. In fact, he forced growers to destroy food while people were starving in the streets. FDR was a fool. He thought wages caused a good economy instead of the other way around, hence minimum wage. He tried packing the US Supreme Court with liberal judges who would let him do whatever he wanted. In fact, I can confidently say that he did nothing that I am proud of. The only exception to this may be WWII, but after reading some non-public-school history texts, I have become a little skeptical of that as well.

How long was he the President? 12 years?! He was as close to a tyrannical president as we've ever had.

Walmart link

Have you been paying attention to the anti-Walmart sentiment floating around? This is a link that will bring you up to speed. Incidentally, for every 2 jobs created at Walmart, 3 jobs are lost at Mom and Pop stores.

Yes, Walmart employs a lot of people in dead end, minimum wage jobs. Yes they provide cheaper goods. BUT they drive out small businesses that are niether minimum wage nor dead end(well, not nearly as often, anyway). Think of the net profits from a particular Walmart store. These are profits that would have otherwise been givin to local entrepeneurs and would otherwise have largely been spent in the town, becasue the owners lived there.

According to the statistics and the formulas Walmart should be great for a small town. But is not. It creates a net loss of jobs, a loss of competition and the jobs it does bring are dead end, low income. In some cases it even kills the towns economy.

As you said, economists do not agree with each other. But this is why i was asking about where the formula is that translates economic benefit into actual human experience.



Re: free healthcare. Most certainly it is not free. Someone does have to pay. But who has to pay and how much? Why is it so expensive? (insert prescription drug benefit rant here) It didn't help, anyway. Completely on the wrong track, anyways. Its commonly accepted that the more of something you buy, the cheaper it is. The more buying power you have, the better deal you can get.

You can save money with a properly implemented system.
Re: tort reform ... Who wants to give up the protection the law affords for malpractice? Would you go bungee jumping knowing that if you died, the owner wouldn't have to give your family anything of value? Re: medical malpractice, i remember reading that most of the suits are directed at a small group of seeming quacks. Why not just take away their licences? Wouldn't that greatly reduce the cost while maintaining the effectiveness of the process?

Wouldn't effective group negotiating reduce the price of services? Couldn't this kind of thing actually reduce the overall cost for the average Joe?


re: cost of living vs. standard of living. Here in Thailand there are a lot of jobs, and goods are extremely cheap. But the jobs really don't pay very well. Most people can't afford an washing machine, much less a car.

In fact, the major reason the goods are cheaper is *because* wages are low. But the low income people here have a low standard of living.

In other words, what I see here in Thailand is what you seem to be saying is a good idea.

Companies would be ours/yours if one owns stock in said companies regardless of nationality. How those companies are run by employees of said companies (who may also own a great deal of stock) is another book.

Money is the proverbial root of all evil, but, before money, people were fighting and cheating over hunting grounds.

I am very aware of the anti-Wal-Mart sentiment. I have many liberal friends who feel like Wal-Mart is a microcosm of everything that is wrong with America's big business.

I feel that the sentiment is misplaced. I would like to address the idea that Wal-Mart's profits are not enjoyed by members of the community. Wal-Mart stock is readily available for purchase. Just about everyone in the community that has money in a 401k or mutual fund has some money invested into Wal-Mart. Instead of mom and pop enjoying the profits, they are spread throughout the community. On top of that, they may also enjoy part of the profits from other locations.

I would also like to add that dead-end, minimum-wage jobs are a blessing for some. I have heard many horrible stories about Wal-Mart, but I am biased because I've been in one after midnight. A HUGE percentage of everyone working had some form of handicap. I was both sad and happy at the same time. I was sad that there were people with these disabilities that couldn't work better or higher priced jobs. However, I was happy that they had somewhere like Wal-Mart where they could go and get minimum wage at the very least. The guy who took my money took a little longer to figure out the change, but I was more than happy to wait. My point doesn't apply only to the handicapped. The uneducated, or otherwise unemployable people, can find work at Wal-Mart.

I have also noticed Wal-Mart's fight to stop the negative opinions. In the US, they are running commercials talking to people who work there. These people talk about how great their benefits are, and how Wal-Mart paid for their child's medical bills, etc. I'm not trying to say that Wal-Mart is a solely magnanimous store or anything, but it's surely no more deserving of blame than any other company.

I find an interesting parallel between Wal-Mart and government purchasing medicine. Either use, or would use, their large purchasing power to lower prices. I could see how using the government's large purchasing power could lower the price of medicine, but I would be very skeptical of using it. This is because the government doesn't run like a business, and corruption is everywhere. My default position is to deny government any new powers because I feel they have way too many already. Also, nowhere does the Constitution give the Fed the power to do this. This, although mentioned last, is the best reason to deny government from purchasing our medicine.

I read a FRONTLINE article on Wal-Marthere. It was fairly well done I think. After reading it, I think the biggest reason that Dems don't like it is its anti-union policies. Seeing as how I hate unions, I love Wal-Mart all the more. Here's a great reason why:

Those hourly associates in the other supermarkets are union. Because they are union, they are being paid drastically higher than they are worth! 'Atta boy Wal-Mart. Because they pay their employees less money, they can provide goods for cheaper. This is why the other supermarkets had to cut their union worker's benefits in response. Either that or be totally dominated by a cheaper store.

One last thing on Wal-Mart. They promoted 9,000 hourly associates to management positions last year. That doesn't sound like a dead-end job.

Tort Reform:
The large majority of all money ever won in court went to the lawyers. There are many stories of lawyers winning millions while the plaintiffs got coupons. A basic right to hold corporations accountable should exist, but tort reform puts limits on the extravagance that now exists. It also limits how much a lawyer can take of the claim. I would hope both sides of the fence could agree on that much at least. No one really cares for ambulance chasers...

Thailand:
It is sad to hear that those people cannot afford the amenities that make life easier for the average American. I do not know enough about Thailand's economy to address the issue. I'm not sure why the goods are priced above what the laborers who make them can afford. Are these devices imports? How involved is the government in the economy of Thailand?

You know, I had a lower management job at McDolands quite a while back. Somehow I still felt it was 'dead end'. the reason is that a 'management' position can include overseeing a section, having minor supervisory powers over other employees. At McDonalds, it came with a $.10 an hour raise. Wheeee!

re: disabled workers. This would not be the case with no minumum wage, you understand ....


I also noted that you didn't address your assumption on job gain vs. the reality of job loss.

Also, I talk about the actual dollars staying in the town, get spent at the video rental store and the hardware shop. You talk about buying stock. Thats kind of difficult for someone who is now going out of business. Thats *really* difficult for someone on minimum wage.

IMHO - the dollars staying where they are is a much bigger benefit that the ability to buy stock. Incidentally, you can buy stock in Airbus, too...

Minimum Wage and Wal-Mart:
You make a good point about McDonald's management. Wal-Mart and McDonald's provides the population with introductory, minimum-wage jobs. This is a necessary aspect of any economy. If someone doesn't educate themselves and gets stuck in this job....see: Tough Love.

You're right about the disabled workers. If there was no minimum wage, there would be more disabled people with a job waiting for them. They would each get paid less however. To compensate for that, and because there are more people working for less, the price of goods would go down.

If you can afford to pay 5 people minimum wage in a production shift, X% of your product cost would be to pay for them. With no minimum wage, either those 5 get paid less, which lowers your cost due to lower labor cost, or you hire more workers, which increases supply thereby lowering cost. Companies WILL always sell at the lowest cost they can afford as long as there is adequate competition.

So with no minimum wage, more people are working and can afford to buy the cheaper goods. Minimum wage has no net-positive effect on the economy, or standard of living. Zero. It actually may have a negative effect, but that is for its own topic. One basic negative that I will mention, is that (again, if there is ANY effect), is that people wont want to educate themselves and leave a minimum wage job if that job is just enough to live comfortably on. The idea isn't to work at McDonald's for the rest of your life, and minimum wage may promote that behavior.

"The Reality of Job Loss"
You are right, when Wal-Mart moves to a broke, uneducated town (I don't know why they would, but they might). It would devastate it. Not everyone who got fired from Mom and Pop could go work for Wal-Mart, and they aren't qualified for another job. It's called structural unemployment, and it's the worse kind. The only way to beat it however, isn't anti-corporation, it's education.

However, usually when Wal-Mart comes to town, the net job loss is temporary. People find new jobs, if they are qualified. Some find them in town, some outside of town. A healthy economy is one that constantly hires and fires people. I've said it before with outsourcing, but short term job loss isn't anything to fear. It's the economy shifting workers to the most efficient position.

Stocks:
Stocks are an equally good, and usually better, asset than cash. At any time, you can sell them for cash, and yet you can also choose to let them grow with the market. Dividends also play a part. If one store owner sees $1000 in cash in a day, or 100 people in the same town see their small piece of that $1000 reflected in their stock holdings, it's a wash for economic benefit. Again, this is theory and not cash in your hand, but the theory is sound, in my opinion.

If Mom and Pop were smart, they would also have some money in the market...possibly even in Wal-Mart.