So how do we grow the economy? (money, government, federal)
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What theory of economics is this from???????? It doesn't sound at all feasible to me. You can't pay workers more money unless your profits are sufficient to do so. You can't HIRE workers unless you have enough customer demand for your product where the revenue from the extra purchases of product are more than enough to cover the wages of the worker. YOU CAN'T PUT THE CART BEFORE THE HORSE like you are suggesting.
Large companies have made huge profits for the past 2 years. The problem is companies are squeezing every ounce of productivity of their workers and are refusing to hire new ones. And if a worker quits on a company, its no big deal to the company there are plenty of people out there would are willing to work more for less money. This is why unions were created in the first place to stop this practice by companies, but now most unions are gone.
Instead of taking their profit and capital and hiring new workers, which would put more money in circulation and put more people back to work and INCREASE demand for products, companies are taking that profit and keeping it for themselves and giving back to shareholders in the form of high dividends. This is why profits have risen and the stock market has also risen. This also explains why economists can not understand why jobs haven't been grown. Companies are simply keeping most of their profits and off shoring them in banks.
You want someone to blame for this economic mess look at these large companies taking their profits and not reinvesting them into the economic system. This is what happens when you have a service economy, the trade deficit is a moot point, because we really don't make anything anymore.
The government tried 2 years ago to get companies to create new jobs through tax incentives. Companies refused to do so, and now the government has no choice but to try and put capital back into circulation. Until companies stop taking their record profits and start hiring people this crisis will continue.
"The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life." T. Roosevelt
"No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar's worth of service rendered – not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective – a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate." --T. Roosevelt
It would be wrong to think that the Second World War broke out accidentally, or as a result of blunders committed by certain statesmen, although blunders were certainly committed. As a matter of fact, the war broke out as the inevitable result of the development of world economic and political forces on the basis of present-day monopolistic capitalism. Marxists have more than once stated that the capitalist system of world economy contains the elements of a general crisis and military conflicts, that, in view of that, the development of world capitalism in our times does not proceed smoothly and evenly, but through crises and catastrophic wars. The point is that the uneven development of capitalist countries usually leads, in the course of time, to a sharp disturbance of the equilibrium within the world system of capitalism, and that group of capitalist countries regards itself as being less securely provides with raw materials and markets usually attempts to change the situation and to redistribute "spheres of influence" in its own favor -- by employing armed force. As a result of this, the capitalist world is split into two hostile camps, and war breaks out between them.
Large companies have made huge profits for the past 2 years. The problem is companies are squeezing every ounce of productivity of their workers and are refusing to hire new ones. And if a worker quits on a company, its no big deal to the company there are plenty of people out there would are willing to work more for less money. This is why unions were created in the first place to stop this practice by companies, but now most unions are gone.
Instead of taking their profit and capital and hiring new workers, which would put more money in circulation and put more people back to work and INCREASE demand for products, companies are taking that profit and keeping it for themselves and giving back to shareholders in the form of high dividends. This is why profits have risen and the stock market has also risen. This also explains why economists can not understand why jobs haven't been grown. Companies are simply keeping most of their profits and off shoring them in banks.
No, they're paying their profits to the stockholders who demand efficiently run and increasingly profitable operations.
And who owns the majority of the stock?
From USA TODAY:
The median amount that CEOs actually took home — which includes salary and cash bonuses, as well as stock and options awarded in previous years that vested or were cashed in — was $8.6 million.CEOs saw the estimated future value of stock and options awards take off in 2010, with the median value gaining 32% to $5.6 million. These stock and options, many of which were granted when stock prices were much lower than they are now, stand to create a shower of wealth when CEOs cash them in.Also, the rising stock market was one of the biggest drivers of CEOs’ hefty windfall in 2010, says William Lazonick, professor at the University of Massachusetts. Given the fact the S&P 500 jumped 12.8% in 2010 and capped a two-year gain of 39.3%, shares and options many companies awarded their CEOs wound up being very valuable. Many CEOs receive roughly the same number of shares or options each year, so when the value of those shares rises, so do pay packages, says Richard Wagner of Strategic Compensation Research Associates.
Wall Street's 2½-year bull market is fueling mega-paydays across a swath of corporate America, from aging industrial giants to young dotcom firms. Yet it also is highlighting the growing wage divide between executive suites and rank-and-file employees.
From Christian Science MOnitor:
Corporate America is in a V-shaped recovery. That’s great news for investors and everyone whose savings are mainly in stocks and bonds. It’s also great news for executives and Wall Street traders, whose pay is linked to stock prices. All can expect a banner 2011. But most American workers are trapped in an L-shaped recovery. That’s bad news for the Main Streets and small businesses in 2011. It’s also a bad omen for home prices and sales, and everyone whose savings are mainly in their homes.
This is a 2nd Quarter stockholder letter from a Health Care Corporation in 2010 that is supposed to help its clients like you and me:
These steps included implementing self management, reducing corporate costs, maintaining a patient and prudent investment philosophy, and building a strong balance sheet and cash position. Our objective has always been to put our stockholders first.
Your absolutely correct.
"The vast individual and corporate fortunes, the vast combinations of capital which have marked the development of our industrial system, create new conditions, and necessitate a change from the old attitude of the state and the nation toward property... More and more it is evident that the Stateand if necessary the nation, has got to possess the right of supervision and control as regards the great corporations which are its creatures.
– Theodore Roosevelt,"
I think that a noble thought but misdirected. Corporation have an obligation to maximize shareholder wealth. As such, they are not moral entities.
That's where the role of government comes in, to make the playing field rules. Without these rules, there would be a corporate free-for-all using every abhorrent behavior available before their competition does. That's why corporations have an incentive to pollute -- because it reduces their costs by throwing them onto society at large.
Current law and regulations encourage shipping jobs to the cheapest locations.
That is not in the U.S. interest and can be remedied many ways. Instead of an outright ban, on can achieve the same end through tariff policy and tax policy. Products can label their U.S. content and assign duties accordingly. The problem, of course, is that corporations buy politicians and Citizens United only makes that worse.
Moreover, other polices effect manufacturer location. Toyota opened a factory in Canada because Canadians provide health care, where the same benefit in the U.S. adds thousands to the cost of the vehicle.
Its a shame this site limits rep points.......its ridiculous, either you are right or you are right!
And who owns the majority of the stock?
From USA TODAY:
The median amount that CEOs actually took home — which includes salary and cash bonuses, as well as stock and options awarded in previous years that vested or were cashed in — was $8.6 million.CEOs saw the estimated future value of stock and options awards take off in 2010, with the median value gaining 32% to $5.6 million. These stock and options, many of which were granted when stock prices were much lower than they are now, stand to create a shower of wealth when CEOs cash them in.
the government creating jobs is a misnomer. what it should be is the government creating the proper conditions for private business to create jobs. and the problem is that obama is not creating the needed conditions for business to create jobs. NOONE is doing what is necessary to create jobs. NOONE...And that was the "mandate" of the 2010 elections according to the Repubs, it was their ONLY PLATFORM, but yet they waste their talking points on social issues instead of job creating. I'm going to be voting for Obama yet again.....but if Repubs had even attempted to do what they "said" they were "mandated" to do, then the Repub congress would be much more popular by now and we Dems would be lots more worried, seriously ALOT more worried because of the continued bad economy. But since Repubs are still lying to the American people, as they have since the last admin. and did not stick to their promise and we can see the group of "teabags" that are running for Pres. We are not so scared. And since Repubs,have decided gay marriage, don't ask don't tell and keeping Obama from succeeding on any subject ever...at any time until the 2012 elections if more important than putting Americans back to work well then...... America and Americans are just S.... out of luck.
on this we agree. imo what needs to happen is that the housing market needs to bottom out. stop trying to prop up the real estate market, let the idiots who signed for mortgages they couldnt pay for fail, and then let the real estate market heal normally. it really wont take as long as people think it might, since it will bring a lot of money back into the real estate markets because investors will be snapping up bargains, and turning them into rental properties. To think that the housing market is full of idiots who signed bad mortgages is the reason the housing market is a mess is IDIOTIC!!!!!!! The banks/wall street speculators created the mess knowing full well they were loaning to idiots. But worse than that are people like me who have had to pay over 3 grand a month for an empty house in Calif for almost 4 freaking years!!!!!that is 200 grand over WHAT THE BANK APPRAISERS SAID IT WS WORTH!!!! Because the market tanked leaving all of us underwater......and we had a NORMAL mortgage. I am sick to death of people assuming that the crisis is brought on by people simply doing what people have been doing since the 50's! then blaming US for the problem. Get a life!
no hoover did not try keeping the government out of the way. he pushed for and signed the smoot-hawley tariff act, added government social spending, raised taxes in a soft economy, and did a number of other big government ideas being floated now, and they all failed. the problem is that FDR has done what obama is doing now, doubling and tripling down on spending, adding new regulations, and playing class warfare, and even raising taxes.
big government does NOT work, and it NEVER has.
too little government does NOT WORK EITHER.....IE: THE HOUSING CRISIS......NO REGULATIONS, OR POOR REGULATIONS on the bankers and wall street! It works both ways.
too little government does NOT WORK EITHER.....IE: THE HOUSING CRISIS......NO REGULATIONS, OR POOR REGULATIONS on the bankers and wall street! It works both ways.
Nope. Too MUCH government interference caused the housing bubble and the mortgage meltdown. Read my post and the linked articles/publications: //www.city-data.com/forum/19954559-post158.html
too little government does NOT WORK EITHER.....IE: THE HOUSING CRISIS......NO REGULATIONS, OR POOR REGULATIONS on the bankers and wall street! It works both ways.
Yes it does.
Government created the housing crisis and then bailed out the bankers and wall street, when it should have let them fail.
It's intervention screwed us all over the place.
i know that's the talking point but that's not what happened. Government didn't force lending institutions to do anything against their will. These institutions were making lots of money doing the wrong thing.
The fallacy in your reply is that the government 'forced' banks to make bad loans. The profit motive and perverse incentives made the financial institutions make bad loans. Under the age-old system, a bank would make prudent loans because they intended upon holding those loans for a long time and they wanted to assure that the borrower had the means to repay the loan.
Under their new system, banks could make risky loans because they intended upon selling the loan five-minutes after signing to a financial institution that would bundle that loan with other loans and sell them as bond-like investments. Thus, the bank couldn't care whether the borrower was a good risk or bad one. Therefore, they made money on the volume of loans not the quality. That's one of the perverse incentives I spoke of and had nothing to do with the government but had everything to do with greed.
You make it sound like the government had to twist the bank's arms to make them lend to unworthy borrowers, which is not the case. The banks and mortgage companies were eager to do it and advertised for borrowers. We all heard the TV ads - "no credit check, no asset check, no problem." The government didn't force them to run those ads.
I wish I had the ability to speak (write) so clearly so anyone could understand. The twisted logic of those that are blaming the borrowers for simply buying houses like Americans have been doing forever...drives me to drink! If I did anyway. They have completely had a case of amnesia over what truly happened. Thanks for making it so very clear!
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Ohh... the freaking irony...
