Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

January 11 2012

"Mitt Romney and the Bain of Capitalism" by Robert Reich

It’s one thing to criticize Mitt Romney for being a businessman with the wrong values. It’s quite another to accuse him and his former company, Bain Capital, of doing bad things. If what Bain Capital...

September 22 2011

"The Republicans’ Latest Ploy to Keep the Economy Lousy through Election Day" by Robert Reich

Whatever shred of doubt you may have harbored about the determination of congressional Republicans to keep the economy in the dumps through Election Day should now be gone. Today, in advance of a key...

September 14 2011

How to Create More Jobs By Lowering Wages: Texas and America

Perry and Romney can duke it out over who created the most jobs, but governors have as much influence over job growth in their states as roosters do over sunrises.

States don’t have their own monetary policies so they can’t lower interest rates to spur job growth. They can’t spur demand through fiscal policies because state budgets are small, and 49 out of 50 are barred by their constitutions from running deficits.

States can cut corporate taxes and regulations, and dole out corporate welfare, in efforts to improve the states’ “business climate.” But studies show these strategies have little or no effect on where companies locate. Location decisions are driven by much larger factors — where customers are, transportation links, and energy costs.

If governors try hard enough, though, they can create lots of lousy jobs. They can drive out unions, attract low-wage immigrants, and turn a blind eye to businesses that fail to protect worker health and safety.

Rick Perry seems to have done exactly this. While Texas leads the nation in job growth, a majority of Texas’s workforce is paid hourly wages rather than salaries. And the median hourly wage there was $11.20, compared to the national median of $12.50 an hour.

Texas has also been specializing in minimum-wage jobs. From 2007 to 2010, the number of minimum wage workers there rose from 221,000 to 550,000 – that’s an increase of nearly 150 percent. And 9.5 percent of Texas workers earn the minimum wage or below – compared to about 6 percent for the rest of the nation, according to the Bureau of Labor Statistics. The state also has the lowest percentage of workers without health insurance. Texas schools rank 44th in the nation in per-pupil spending.

The Perry model of creating more jobs through low wages seems to be catching on around America.

According to a report out today from the Commerce Department, the median income of U.S. households fell 2.3 percent last year – to the lowest level in fifteen years (adjusted for inflation). That’s the third straight year of declining household incomes. Part of this is loss of jobs. Part is loss of earnings.  

More and more Americans are retaining their jobs by settling for lower wages and benefits, or going without cost-of-living increases. Or they’ve lost a higher-paying job and have taken one that pays less. Or they’ve joined the great army of contingent workers, self-employed “consultants,” temps, and contract workers – without healthcare benefits, without pensions, without job security, without decent wages.  

It’s no great feat to create lots of lousy jobs. A few years ago Michele Bachmann remarked that if the minimum wage were repealed “we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.”

I keep on hearing conservative economists say Americans have priced themselves out of the global high-tech labor market. That’s baloney. The productivity of American workers continues to soar. The problem is fewer and fewer Americans are sharing the gains. The ratio of corporate profits to wages is the highest it’s been since before the Great Depression.

Besides, how can lower incomes possibly be an answer to America’s economic problem? Lower incomes mean less overall demand for goods and services — which translates into even fewer jobs and even lower wages.

In short, the Perry (and Bachmann) model of job growth condemns Americans to lower and lower living standards. That’s nothing to crow about.

Reposted by02mydafsoup-01santaprecaria

August 30 2011

Rick Perry's Secret Plan to Save Blue States from the Red States

Of all the nonsense Texas Governor Rick Perry spews about states’ rights and the tenth amendment, his dumbest is the notion that states should go it alone. “We’ve got a great Union,” he said at a Tea Party rally in Austin in April 2009. “There’s absolutely no reason to dissolve it. But if Washington continues to thumb their nose at the American people, you know, who knows what might come out of that.”

The core of his message isn’t outright secession, though. It’s that the locus of governmental action ought to be at the state rather than the federal level. “It is essential to our liberty,” he writes in his book, Fed Up! Our Fight to Save America from Washington, “that we be allowed to live as we see fit through the democratic process at the local and state level.”

Perry doesn’t like the Federal Reserve Board. He hates the Internal Revenue Service even more. Presumably if he had his way taxpayers would pay states rather than the federal government for all the services and transfer payments they get.

This might be a good deal for Texas. According to the most recent data from the Tax Foundation, the citizens of Texas receive only 94 cents from the federal government for every tax dollar they send to Washington.

But it would be a bad deal for most other red states. On average, citizens of states with strong Republican majorities get back more from the federal government than they pay in. Kentucky receives $1.51 from Washington for every dollar its citizens pay in federal taxes. Alabama gets back $1.66. Louisiana receives $1.78. Alaska, $1.84. Mississippi, $2.02. Arizona, $1.19. Idaho, $1.21. South Carolina, $1.35. Oklahoma, $1.36. Arkansas, $1.41. Montana, $1.47, Nebraska, $1.10. Wyoming, $1.11. Kansas, $1.12.

On the other hand, fiscal secession would be a boon to most blue states. The citizens of California – harder hit by the recession than most – receive from Washington only 78 cents for every tax dollar they send to Washington. New Yorkers get back only 79 cents on every tax dollar they send in. Massachusetts, 82 cents. Michigan, 92 cents. Oregon, 98 cents.

In other words, blue states are subsidizing red states. The federal government is like a giant sump pump – pulling dollars out of liberal enclaves like California, New York, Massachusetts, and Oregon  – and sending them to conservative places like Montana, Idaho, Oklahoma, Arizona, Wyoming, Kansas, Nebraska, and the Old South.

As a practical matter, then, Rick Perry’s fight to save America from Washington is really a secret plan to save blue states from red states.

Perry, it turns out, is a closet liberal.

Older posts are this way If this message doesn't go away, click anywhere on the page to continue loading posts.
Could not load more posts
Maybe Soup is currently being updated? I'll try again automatically in a few seconds...
Just a second, loading more posts...
You've reached the end.

Don't be the product, buy the product!

Schweinderl