This week the government reported several statistics that indicate that the $7 trillion Uncle Sam has committed to economic stabilization is having little real effect. On Wednesday, the Labor Department reported that the four-week average of initial requests for unemployment benefits was at its highest level since January 1983. The Commerce Department reported that consumer spending plunged by 1 percent in October. Commerce also reported that orders for big ticket manufactured goods plunged in October by the largest amount in two years. Orders for durable goods dropped by 6.2 percent which was more than double the decline economists expected. Lastly, the unemployment rate hit a 14 year high of 6.5 percent.
So, with all of this grave news and the seeming ineffectiveness of the government to spend our way out of depression, unbelievably Washington with an increased Democratic majority in Congress and a Democratic president-elect is planning a bevy of new pro-union measures when they take office in January. It is unbelievable because the last thing we need right now, other than a tax increase, is for Washington to increase costs on business. After all, it is business that is being relied upon to supply the jobs that will eventually lead us to recovery.
What are the measures the new administration is considering imposing on business? They are essentially the same old left-wing schemes that have been pushed for years. They include: mandatory paid sick leave, ergonomics regulations, and expansion of the Family and Medical Leave Act.
These measures that the president-elect and his socialist buddies in the Congress are considering are of course unconstitutional. I know I sound like a broken record, but Congress has no authority under Article 1 Section 8 of the U.S. Constitution to legislate benefit packages for workers of private business. There is a good reason for this. The founders realized the only way for a people to be truly free was by guaranteeing their economic freedom. It works both ways – freedom of individuals to use private property as they see fit and freedom of workers to use their labor as they see fit. Forced regulation puts business at a competitive disadvantage because it usurps the power of the market to make the most efficient decisions possible. These measures seem just, but how does Congress know what the ramifications will be for the health of American business? They don’t and remember again that we are relying on business to reinvigorate the economy with jobs.
Article comments
— go to most recent comments1 - Dan(Miller)
Congress has reached new depths of stupidity. Don't worry. Records are made to be broken.
Dan(Miller)
2 - Cindy D
The founders realized the only way for a people to be truly free was by guaranteeing their economic freedom.
Truly free? Most of the founders were rich authoritarians who wanted to protect themselves from the likes of people like you having an actual say about anything.
Forced regulation puts business at a competitive disadvantage because it usurps the power of the market to make the most efficient decisions possible.
The market already made the most efficient decisions possible (with loads of help even). Take a look around you at the result.
That you are still saying stuff like this makes me wonder what it would take to wake some people out of their propaganda induced comas.
Same old horseshit, different horse.
3 - Clavos
The market already made the most efficient decisions possible (with loads of help even). Take a look around you at the result.
Wrong.
The mess you see is the result of wrong headed manipulation by the government (at the instigation of elected officials, in both the executive and legislative branches) since the end of WW II.
The market had nothing to do with it.
4 - Neal Taslitz, Esq.
Dear Mr. Jacobine,
As an attorney who also holds a bachelors degree with honors in business economics and public policy from a leading U.S. university and as one who volunteered his time working with dozens of serious injured employees and leading scientists and physicians from the U.S. and Scandinavian countries, including members of the National Academy of Sciences in the 1990s, and as an advocate for safety issues that are effective and affordable, I find your comments typical of the ignorance of the documented savings that low cost ergonomics, particularly computer ergonomics, will bring to companies that pay millions in workers compensation claims without proper ergonomic programs in place, to be the standard knee jerk rhetoric that: "government regulation of business is bad for business." Just Google: Feliberty v. Kemper to find out how costly it can be for businesses to skimp on a few hundred dollars of ergonomics items, and end up paying hundreds of thousands of dollars as a result of one injury.
We've seen the results of that same type of myopic foolish thinking recently in the collapse of the housing market and financial industry.
Moreover, as a historian you seem to have forgotten that the major factor why unions took hold in the late 1800's in America was the injuries that were occurring to workers without any regulations or simple inexpensive safety equipment to protect them. The electrical union is one example. The stunning success of the migrant farm workers' union is a more recent example that had more to do with injured workers than anything else, i.e. the devil's hoe.
I doubt that business want unions to organize computer workers, as some have been doing to the surprise of many, but if simple safety measures are not put into place, the computer workers will continue to organize, and business will regret not improving the safety of their companies, if cyber strikes begin. That would be a very expensive problem for business.
Essentially, safety is a management issue, like quality control. Companies that protect their workers usually are more successful than those who look the other way when it comes to proactive safety measures.
If you would like more information on any of these topics, I'll be glad to share them with you. You might decide that an once of prevention is worth preventing a ton of litigation costs, not to mention terrible moral issues, and bad press.
Just ask the management of the U.S. companies where coal miners died during the last couple of years, where safety took a back seat to short term profits. I'm sure the costs of settling the litigation was substantially more than a proper safety program. The real tragedy is that 99% of the workers who get injured would have rather avoided the injury and the litigation. No amount of money can bring many injured workers back to work once they are seriously injured, and no amount of reactive safety measures will help those who died doing their jobs.
Sincerely,
Neal Taslitz
Attorney-at-Law
[personal contact info deleted]
5 - Clavos
Comments Editors,
Are we giving away free advertising space in the comments threads now?
6 - Dr Dreadful
Not sure what you mean, Clav.
I've excised the personal contact information which was appended to the comment above yours, which we do for commenters' own protection. If there's something else I've missed, please point it out to me.
7 - YesWeDid
Kevin-
Only rightie nutjobs blame workers for bad management!
That is SO 1990s.
All workers have a right to organize, and business has to live with it, or get replaced. That's economic reality.
8 - bliffle
This article reaches new depths of stupidity.
Anyone who pins their hopes of recovery on the business community is a fool. The business community is uninterested in recovery. Each business is only interested in maximizing return to it's own investors, as we have been told time and time again by champions of the Pure Capitalism so cherished by the rightists.
Which is why the biggest fools in the political sphere, namely Bush, Paulson, etc., and their supporters in the peanut gallery, like Nalle, Jacobine, Clavos, etc., support this goofy idea.
In fact the authors own opening sentence empirically refutes the idea that pumping money into the business sector can bring recovery:
"This week the government reported several statistics that indicate that the $7 trillion Uncle Sam has committed to economic stabilization is having little real effect."
In fact, pumping money into business is counterproductive because it shifts the money balance away from consumers, which is the real path to recovery.
This is a CONSUMER ECONOMY. It is not a producer economy. The economy is driven by consumer spending, not by manufacturing. Businesses do not lead, they follow. In particular, they follow markets. Businesses around the world, and especially in the USA have honed their ability to follow markets rapidly greatly since the Japanese revolution of a couple decades ago and the ascendancy of Deming methods of Zero Inventory Time and other rapid response techniques. Producers have developed methods such as Vendor Banking to a fine degree to reduce their own capital involvement and shift risk to, among others, their suppliers. Thus, for example, GM owes it's vendors several times it's own cap value.
Sure, partisans of the business world advocate giving public money to their firms: why not? But it is quite foolish for government to do that. Given extra capital in the form of public handouts a modern firm doesn't 'create more jobs' as the ideologues theorize, but just buy a competitor or bank it, thus removing the money from circulation, which is directly contrary to the intent of the handout!
If they buy a lossy competitor they will realize a huge tax benefit, thus weakening recovery even more. That is EXACTLY what Wells Fargo did when it purchased Wachovia! By investing $14billion in the purchase WF will realize a tax refund estimated from $20billion to $70billion! Possibly, that $14billion was bailout money.
So, not only did the USA GIVE away the $14billion, it will also have a further liability to WF in the form of tax refunds.
How stupid can you get?
It's time to lay to rest the bogus idea that giving money to businesses stimulates the economy. It is invalid theoretically and empirically.
The key to the economy lies with CONSUMERS. We've got to put money in the hands of individual consumers. Any recovery based on producers is bound to fail, and, in fact, worsen the situation.
9 - Brian aka Guppusmaximus
The mess you see is the result of wrong headed manipulation by the government (at the instigation of elected officials, in both the executive and legislative branches) since the end of WW II.
Nope, this is the reason why there is a mess:
This is a CONSUMER ECONOMY. It is not a producer economy. The economy is driven by consumer spending..
It is because of those stupid "consumers" who purchase a new car when they know they can't make the payments. Those stupid "consumers" who knew they shouldn't be taking out them housing loans(Too good to be true??) Those stupid "Consumers" who are up to their eyeballs in credit card debt. Who do you think has to eat that poor return?
10 - bliffle
What's your point, Brian?
11 - Cindy D
He doesn't have a real point bliffle.
Like Clav and Kenn, his religion was attacked. And his answer is very similar to Clav's or Kenn's--"you are wrong and I am right, because this is what I have faith in." No proof is necessary. Any criticism is wrong, instantly and absolutely. That is the way it is.
Like any blind follower he's got nothing but his faith and a reactionary need to repel any argument against his religious beliefs no matter how well-considered.
12 - Clavos
Like Clav...
Excuse me???
Who posted on another thread (and was supported by bliffle) that this is a consumer economy?
Who advocated NOT giving any money to the car companies? Who said let them crash?
Who suggested charging trying and convicting all the car companies' boards and senior management?
Who proposed giving the money to re-train, relocate and sustain the workers?
So, Cindy, you indulge in stereotyping too, I see.
I'm fast losing the respect I once had for you, Cindy.
I've never had any respect for you bliffle, you're too rude and not nearly as smart as you think you are, but I thought you were truthful, at least.
What a pair...
13 - Glenn Contrarian
Brian, Clavos -
Here's a little something to chew on - which democracies in this world have the MOST regulated economies, and which democracies in this world have the LEAST regulated economies?
The answer's easy for those who have traveled much - but let's see what you two think....
14 - Clavos
You tell me, GC. Show me how much smarter than I you are.
15 - Irene wagner
Yeah, Glenn, and while you're at it, show how much smarter than ME you am.
Might doesn't make right. Neither does smart, not always.
16 - Irene wagner
I'm going to guess Ireland for the least.
17 - bliffle
It is important to regulate businesses for public benefits, such as clean air, clean water, safe working conditions, etc.
It is just as important to stop coddling businesses with subsidies and tax breaks. The very premise of private business is against such coddling.
Coddling business is counterproductive economically as well as polluting our streams and air and endangering citizens on every side, whether as employees, as customers or as innocent bystanders.
18 - Glenn Contrarian
Clavos - did I say I was smarter than you? No. And I truly don't even think such things. There are things that I know that you don't...and there are things you know that I don't.
Want to make me happy? Show me something new, something I didn't know. Learning something new, something I didn't expect makes me happy.
Look back at everything I've ever written on this or any other forum, and you'll see NO insults. You'll sometimes see a condescending tone - which is not intentional - and you'll see angry rebukes...but NO insults.
So you've no need to toss spite or scorn in my direction. I'm just a guy who's willing to learn, and who's eager (like you are) to share what he knows.
But in this case, it's more effective if I challenge you to determine the answer for yourself, because if you determine the answer, you will have learned something I don't think you realized. However, if I simply pointed it out to you, that makes it much easier for you to dismiss.
19 - Irene wagner
The thing is Glenn, if the answer to "which democracy has the least regulated economy?" is some third world place, where the leaders don't really care, where factory workers are routinely sacrificing fingers to machines, or sweat-shop bosses are getting away with abuses they never could in the land (USA) where the company's headquarters are, then will you really have proved that ALL regulation is good regulation?
With that argument, you're only considering one extreme, the "too little" extreme, not the "too much" extreme, or the "just right" extreme.
20 - Irene wagner
And if I could take back the phrase "just right extreme" I would. I've said enough.
21 - Irene wagner
No, I haven’t.
…and if, on the other hand, if the answer to the “what is the democracy with the most regulations?” is some country whose consumers are not burdened with footing the bill for military bases all over the world, (not to mention wars), for instance, then you haven’t pinpointed optimal regulation as the source of that economy’s success either.
There Glenn the Contrarian, I’ve dismissed your answer before you’ve even given it. Say hi to your wife Marian.
22 - Georgio
Neil Taslitz...is your fathers name Jack ?
23 - Dr Dreadful
"...Congress has no authority under Article 1 Section 8 of the U.S. Constitution to legislate benefit packages for workers of private business."
Article 1, Section 8 does not prohibit Congress from doing anything. It enumerates what Congress can do.
Just because it does not specifically state that they can enact labor legislation doesn't mean that they can't.
24 - Brian aka Guppusmaximus
Like any blind follower he's got nothing but his faith and a reactionary need to repel any argument against his religious beliefs no matter how well-considered.
Okay...come back to Earth, Cindy. Did you even read my comment or are you the blind one?
25 - Dave Nalle
Which is why the biggest fools in the political sphere, namely Bush, Paulson, etc., and their supporters in the peanut gallery, like Nalle, Jacobine, Clavos, etc., support this goofy idea.
Bliffle, it's amusing that you cite the three people who have written the most opposing the business bailouts here. You really do live in an altered reality, don't you.
This is a CONSUMER ECONOMY. It is not a producer economy. The economy is driven by consumer spending, not by manufacturing.
Now this I can agree with. We've been a consumer driven economy since the colonial era. It's not often addressed by economists, but the truth is that it is possible to have a fully functional economy which is driven and dominated by consumption and the structures and institutions which support consumption.
Dave