Starve the beast
In the world according to ALEC, competing firms in free markets are the only real source of social efficiency and wealth. Government contributes nothing but security. Outside of this function, it should be demonized, starved or privatized. Any force in civil society, especially labor, that contests the right of business to grab all social surplus for itself, and to treat people like roadkill and the earth like a sewer, should be crushed.
Because, the national chairman of ALEC explained on Fresh Air yesterday, creating jobs isn’t the job of government; corporations are the ones that create jobs.
O rilly? I thought what corporations did was cut jobs as much as they possibly could without cutting production. I thought the job of corporations was not to create jobs but to make lotsa money for the shareholders. I thought one favored way of doing this was cutting labor costs. Jobs are all very well, but if they don’t pay anything, they tend to be more trouble than they’re worth. (I should know; I don’t get paid anything; but then I don’t call what I “do” a “job.”)
Well anyway. The Republican are determined to push us all off a cliff, so none of it matters. In a couple of weeks everybody except the very rich will be penniless. Whatevs.
Look…
My wife had less than a hundred pages left on her latest George R.R. Martin book. If you post stuff like this, I start screaming at my computer at the top of my lungs, and she never finished the damned book. We know corporations and the political groups that support them are in favor of destroying America in order to maximize profits, but you don’t need to rub it in.
…and don’t even get me started on the stupidity of the “free market” suicide cult.
Victim shaming and mockery too. That’s what one gets for actually helping YOU (Wally much?)… well thanks, Ophelia. I’m not sorry I helped stop YNH, because he was acting unethically. But you have a thing or two to learn in the ethics department yourself. Not that I expect you to be any more willing to learn, given the assholish attitude you display right here.
The hell, Hitch?
Tom Toles. (After, when I checked, a Gulfstream ad!)
Confession: I’m not doing anything to help. I used to be a leftist, but now I find the left annoying. And for that, I leave the field to the tea party. No excuses.
Eesh @ #2. You get your finger caught in your fly or something?
It’s funny how many of the sorta-rich think that they’ll somehow be immune to the forces they’re setting in motion. How much business will those boutique and big box stores do if the middle class is erased, I wonder. It’s a pity libertarians have declared by fiat that “enlightened self-interest” means unbridled greed, because there’s a lot of good arguments that universal health care and other scary socialist ideas are very much in the interests of mid-sized and large corporations. Healthy employees are productive, and retraining when you fire unhealthy ones is expensive.
Marta @ #5
… something smaller than a normal person’s finger caught in the zipper? :)
Joe,
Indeed. His head.
Morris Berman’s thoughts on this topic are worth reviewing. Here’s a passage from a 2001 Guardian article titled “Waiting for the Barbarians”:
“The contemporary American situation could be compared to that of Rome in the Late Empire period, and the factors involved in the process of decline in each are pretty much the same: a steadily widening gap between rich and poor; declining marginal returns with regard to investment in organizational solutions to socioeconomic problems (in the US, dwindling funds for Social Security and Medicare); rapidly dropping levels literacy, critical understanding, and general intellectual awareness; and what might be called “spiritual death”: apathy, cynicism, political corruption, loss of public spirit, and the repackaging of cultural content (e.g., democracy) as slogans and formulas.”
He goes on to comment on “external barbarism” as well, but I think the above excerpt is especially apt for your post, Ophelia–nay, prophetic!
Actually, my observation of modern business practices is that profit is NOT the prime operating goal because profit gets taxed. instead they tend to reinvest the money to “grow the value” of the company so that shareholders get capital gains without taxation (until they sell their shares). Then, having created a culture of deferred benefits, difficult-to-measure asset gains, and inscrutable accounting practices, the executive branch soon learns (or is taken over by people who already know) that they can bloat their own salaries much faster than they can grow the business, and they then become parasitic upon their own shareholders. This is why so many major companies go belly-up, leaving the shareholders with nothing while the executives earn multi-million dollar performance bonuses and golden parachutes no matter how badly the company has crashed and burned.
Well, what’s going on is the reality of almost a reversal in the way business is run on a day to day basis. How it used to be, and how Econ 101 is delivered is the following: If we have X workers doing Y units of labor, if we add to those numbers, how much more business will we do? Is it profitable to do so?
Now? Businesses are much more complex and informed in the way they are run. So you get the following: We will sell estimated Z units. How can we minimize the cost and the amount of labor in order to produce Z.
The economy has gone from a mild-supply side economy to a hardcore demand-side economy. And generally speaking we still talk about business using the former terms. That’s the problem. And it’s not just conservatives! A good cross-example I like to give, is if you hear a leader talking about how more secondary education is the key to growth, how? Degrees do not magically equal jobs. It all has to do with demand. More degrees mean lower wages for those with those degrees. But we still talk about education in pretty specific supply-side tones.
I thought what corporations did was cut jobs as much as they possibly could without cutting production. I thought the job of corporations was not to create jobs but to make lotsa money for the shareholders…
Well, isn’t that what you want to do in your life (replace shareholders with family)? What’s the difference?
What was amusing was the insistence by some Louisiana political hack that the public was fully represented in the development of business-friendly policy because he was elected and therefore was representing that public in those sessions. Well everythings alright then, innit?
The modern corporate executive layer has cut itself free from shareholder control or accountability, I think thanks largely to the massive part in shareholding played by pension funds. The people who set the packages and perks of the executives (directors or consultants hired by them) have their pay determined in turn according to what the executives are getting. In other words, a positive feedback loop.
Result: executive rewards have grown exponentially, and independent of company profits. They can go through the floor, but the result for the executives is still the same.
The worst part of the anti-government ideology is that it’s resolutely anti-empirical. If low taxes really produced general prosperity why is it only found in countries with “high” taxes and large government sectors?
Why not consult history instead of spinning a tale out of abstractions? The U.S. was built on big government projects like the Louisiana Purchase, the Erie Canal, the railroads and homesteading, the construction of bridges, airports and interstate highways, communications satellites and, oh yes, the computer industry and the internet. Private industry can’t build very much if the government doesn’t pave the way. Look at the world, look at the patterns of prosperity and poverty, and then tell me that government is the problem.
robzrob, (#12) let business do what it thinks it must, so long as government does what it must do to create the conditions for future growth, as it has done in the past. The decline in investment of recent decades is part of the reason for income stagnation since 1975. The rest is the inevitable result of competition as U.S. economic supremacy after WWII was challenged. The anti-government ideology is a form of amnesia. We’ve forgotten how we actually built the country.
Well if lower taxes lead to more job creation we’re sitting pretty since tax rates are the lowest they have been for decades. Lower4 than in the boom years of the nineties. The current unemployment rate is simply because all you spoiled lefties just don’t want to work. We’ll just have to import more illegal labour!
@Hitch:
WTF?
@Hitch
You okay?
Hitch…there was no “victim shaming.” You seem to be applying what I said on Rebecca’s post to yourself, but you’re making huge and unwarranted assumptions in doing that. Not least, you’re assuming I know a lot about you, when the fact is I know nothing about you. Nothing. You seem to think I know you’re a “victim” of some sort but I don’t. Please try to keep in mind that you’re one of many people who comment here, you don’t comment often, and my memory is nowhere near good enough to hang onto everything people post here. It’s not good enough to hang onto what I post here!
Really. I’m not talking about you. I’m not “shaming” you. I’m not using knowledge about you against you. I don’t have any knowledge about you.
sailor1031 (#18), it’s funny (not haha, though), you would think that antigovernment people would try to make the case for low taxes by showing the splendid results of lowering taxes, with charts showing how we’ve all benefited from the growth explosion and income growth since the Reagan years. But they can’t make the empirical case without running into the situation I described: slow overall growth with benefits accruing to the upper income levels. Income for high school grads has gone down, is flat for college grads, and has risen for people with advanced degrees. The tax changes have pushed the burden downwards onto people with fewer resources, and the resentment against taxes is then exploited by the very people who have the least cause to complain.
The best argument against all this nonsense is here. And it’s not like the guy writing it is a big government liberal; he seems to be a disillusioned libertarian.
Ophelia, yeah I kind of agree that you have almost no knowledge about me. What I did share was not well received, but alas that’s in part on me. No point to lament.
Hitch, honestly, I have no knowledge about you. If you’re thinking you said something relevant to my comment at Rebecca’s and I remember it, you’re wrong. Nothing I said at Rebecca’s had anything to do with you. Really. I wasn’t thinking about you when I said it. I got a lot of comments from people I’d never heard of before (as far as I knew).
The ‘job’ of business enterprises is to make a return on shareholders’ funds, the average industrialist’s nirvana is an enterprise staffed by robots. What business school did Mr Ellington attend?
#15 Ernie Keller,
yes, exactly don’t let statistics get in the way of self-serving ideology.
May I offer a small correction? These professional managers say they want to maximize shareholder value. They don’t necessarily want to maximize shareholder value.
The comment here is tending to focus the anti labour aspect. But from Enron to Wall Street we see they’ll skim value from anyone. Shareholders, taxpayers, it doesn’t matter.
Much of the deregulation they advocate is aimed at reducing shareholder oversight. That makes it easy for managers to skim shareholder value. That they should still be pressing this deregulation in the wake of the GFC is breathtakingly arrogant.
#26,
Fair point, however its accuracy would depend on how dysfunctional any particular enterprise’s governance actually is. Sometimes, I’d have to agree that managers are, all too often, incompetent, unethical or just plain criminal rent-seekers. “Paper entrepreneurs” seem to infest Western economies these days.
As other comments here have implied, we get the capitalists we deserve.
@ Rossana Lhota I’m reminded France’s prelude to revolution. The government was broke. The king tried to levy taxes on the nobility and clergy. The nobility and clergy thwarted the king.
The revolution was a poor outcome in my opinion. But it demonstrates there’s only so much degradation people will take from their ‘superiors’.
@ Smokey Dusty: Yes, I see what you mean, though it seems that those outside of the “nobility and clergy” who lack their power to “thwart kings” can, in fact, take lots of degradation today, no? Maybe they’re too well distracted and entertained–and not yet starving in sufficient numbers–to challenge their “superiors.”
I really enjoy the article post.Much thanks again. Really Great.