Deep poverty in an economic expansion?

[rahmota]

I was looking at the news and found this interesting article.

http://www.usatoday.com/news/nation/...y_x.htm?csp=24

It basically says that over the years 2000-2005 deep poverty in america has increased at an outstanding rate and the gap between the haves and the have nots has increased more than ever.

Big surprise there. I could have told you that. People are working more and for less money while corporate america sees their coffers overflow with record profits.

Hmm with a president in the pocket of the corporations its no wonder that nothign is being done to try and reign this in. But what can be done? Not much without being reviled as being anti capitalist and against the free market. bah freemarket is just another name for letting the rich exploit the poor and keep people in wageslavery and oppressed.

[Rapscallion]

A friend of mine (we're in the UK) says that he's all in favour of the minimum wage, but he'd also like to see a maximum wage as well. That would sort out some of the fatcats who are doing their best to earn huge bonuses whilst their workers are slaving away. However, I could cheerfully recommend an increase in the minimum wage as a starting point.

Rapscallion

[protege]

I don't think we can blame this all on G.W.B. This has been going on for years. The main reason CEOs are getting so much cash...is because they get it from the boards of their respective companies. Anyone want to guess who elects those board members? Stockholders....who only want to increase what their shares are worth and get dividends.

Even so, I really doubt many CEOs are really worth the amount of cash they're making, especially since many of them do very little, and pawn their work off on subordinates.

I'm not sure increasing minimum wage will solve the problem either. All that will do is cause prices to go up. The increase has to be paid for someone...and I don't think corporations will tolerate any hits to their bottom line--they'll just pass the increase off on consumers by raising prices. As if that wasn't enough, a higher minimum wage will mean that taxes will increase as well. It might even make a few companies say "fuck you" to the US, and move overseas.

That brings up a whole new problem. People in this country want high wages, yet demand low prices for things. Companies are in the business to make money--if costs start rising beyond their control, they either raise prices to compensate, or (eventually) go out of business. Take a look at what happened to the steel mills around Pittsburgh during the 1970s and '80s.

Many of the mills here closed up then. There are still a few smaller mills left, but not many...and what's left probably won't last forever. Most of the big mills got squeezed out simply because their costs were too high, making the finished product too expensive. Simple economics--people will tolerate price increases up to a point. Past that point, they'll start looking for subsitutes, and company that can't contain costs *will* fail eventually.

[Isios]

And Protege catchs the Catch 22 with the situation. Everyone praises the great economy during Clintons era. He got to ride the internet boom, also it wasn't until the end of his presidency that the effect of companies moving overseas for cheaper labor really started to hurt the economy. G.W.B. didn't exactly inherit a great economy. Not that I have paid attention to it lately.

[rahmota]

Which is one reason I think the free market has such severe problems that it should be scrapped and a more controlled market should be enforced. With limits on profits and prices and tariffs to keep companies from moving overseas. Basically eat any profit they could ever hope to make by going overseas away in tariffs and then add a punishment penalty to them for being bstrds and taking the jobs overseas in the first place.

The trickle down theory hasnt been working as the rich do not want to part with any of their money than they absolutely have to. the Supply it and they will buy it idea is a bad one because if people dont have the money to buy it then it doesnt matter how many widgets you build they will not be bought. Go by your local hummer dealer and count how many they have on their lot.Look at the most expensive cars/suvs and see how many are being sold. What needs to be done is to increase the buying ability of the average person, increase the amount of jobs available by reducing the ability of companies to run away and force the fiscal responsibility of corporate america by de-emphasising the greed factor.

I'm not quite sure how to figure all this mess out by myself or articulate it so you can understand what is floating up in my mind. But I do feel that capitalism stinks. It is just another means of oppression and exploitation of people and should be abolished. Replaced with some form of maybe true hippie communism, social credits, job protection for people, FDR's New deal brought back, something to bring more people into the middle class and less at the extremes.

And I was not throwing all the blame on King Bush II but he has been at the helm during some of the biggest and fastest expnsion of the federal government in the history of the country. Civil rights have been collapsing at a faster rate than a house of cards in a hurricane and poverty has been increasing at record rates. SO he is to blame for a lot of the evils and wrongs in this country and the world and is more deserving of impeachment than Clinton ever was.

Unfortunately the first politician to stand up to big business and try and reign in their abuses will shoot his career in the foot as the PACS and lobbists will see to it that he couldnt be elected dog catcher in podunk alabama.

[Rapscallion]

Tariffs are interesting from the other side of the fence. There was a rather interesting time when GWB implemented tariffs on imported steel, making certain that exporters from this neck of the wood could not compete against US-based producers who were less efficient.

So far, so good. It meant that the industries relying on that steel actually paid higher prices, though it kept Americans in jobs.

However, rumblings began about how American goods would soon suffer reciprocal tariffs when exported to other areas of the world. It would have an effect on the economy in a different way. That's what the beancounters are for - to work out what would cause least harm to the economy.

Rapscallion

[Isios]

I hate to say it but I don't think socializing wealth is the right way to go either. It makes people too dependant on their government. I am one of those that believes our government has too many fingers in the proverbial american pie right now. Heck the USoA has it's fingers in too many pieces of the world pie right now, but i am not going to get into that.

You know communism in any form has worked so well in so many countries. I really don't think it matters how money is handled there will always be the haves and have nots until money is completely done away with, and the need to keep up with the Johnses is no longer in the human psyche'. Unless we are living in a Star Trek like world I just don't see that happening with the limited resources in our world.

[rahmota]

I will grant you that the distribution of resources is one of the if not the most complex and complicated things in the world. And so far there have been very few instances of the free market or actually any other market working on a fair and equitable level above the small hippie commune. And even then they have some issues.

As for the commnism that has been bandied about like in the old soviet union. That was not the true communism. That was only communism in name as it was more of a socialist state. A all are equal but some are more equal than others state. The star trek kind of communism (because yes I believe th federation as of teh next generation is best describeed as a true communism state. To each according to their needs, from each according to their ability.

Right now it seem to me like it is to each according to how much they can scam or who they know or what they can get away with from each according to what social class they are. I cant help it if I want to see a bit more social responsibility in this world.

And I've never claimed to be an economist just a humble reedneck farmer from the backwoods of Ohio who has had enough of the fatcat rich getting bigger paychecks than some countries GNP. I've been digging my way up to the point where I finally have my head above water but a good wave could knock me back down. And too many people I know are in the same boat or worse. Merely surviving on one or two paychecks in their family or even worse barely keeping their head below water and this is folks not splurging or misappropriating their funds on stupid BS.

I will agree about the fingers in the pie thing. I am not against the government having their fingers in the pie if they have the right fingers in the right pie. Personal individual civil liberties should be protected as strongly and aggresively as possible while companies and the market and the resources are controlled in as efficient and effective a manner to provide the most benefit to the most people in the common good.

Maybe I should just do a cincinnatus and hang up my political activist hat and stay on the farm.

[protege]

So far, so good. It meant that the industries relying on that steel actually paid higher prices, though it kept Americans in jobs.

Eventually though, many American mills were killed off by this--because the companies were "protected" they didn't feel a need to modernize or streamline their operations. (Not that they could anyway--the unionized workers would have threatened to go on strike, and did so many times.) Those mills are now rusting away, or were torn down in the late 1990s for redevelopment. Driving in and around Pittsburgh during the 1970s and '80s...there were dead mills all over the place. 20-30 years before then, it was possible that 10,000 jobs or more were in each one! After they closed, the ripple effect hit other industries: coal, machinery, etc. They too suffered problems, and many had to close. Things here weren't helped when low-cost coal started coming in from places like Wyoming during the 1970s.
Now, most of the coal mined here, that would go to mills, goes to power plants or is exported.

Soviet-era communism in the workplace was a disaster. Many times, their products sold well at home...but not so much in other places. Cars such as the Trabant, Syrena, Pobieda, or God forbid, the Zaporozhets. were common behind the Iron Curtain, simply because there weren't choices. In other words, if you wanted a new car, it was one of those. These cars were built to last. However, they were pretty crude, technology-wise....simply because there usually wasn't enough cash to modernize them. Throw in the "I don't care" attitude of employees then (they got paid regardless of whether or not they actually did work), and it's no wonder some things had a well-deserved reputation for being shit. After the curtain fell, new Trabants suddenly found themselves without buyers--after the wall fell, you couldn't give them away! By then, everyone wanted a used VW or BMW instead.

[Rapscallion]

Well, the way the unions work in the US is a matter of fright for me. Granted, I only hear about them when they act up, but the ones we have over here have legal restrictions on them, but they also try to work with the employers.

The one I joined at my current job offers training courses in basic and advanced areas - the reasoning is that a more skilled workforce is going to be better able to help the employer stave off financial woes. It also makes it harder for the employers to claim the workers are underskilled and therefore disposable.

I don't know much about the way the unions work in the US, but every time I see them they're striking, and it seems very much an 'us vs them' instead of 'us and them' style that was in vogue in the seventies and eighties over here. The unions need to modernise as much as the industries do.

Rapscallion

[rahmota]

Protege: I was a little kid back in the 70s so I didnt live throuhg that stuff much. The factory dad worked at did shut down back in the 80s due to the management using it as a tax dodge we later found out.

I'll agree that a lot of the problem was the short sightedness of a lot of the management and leaders of both the factories and unions.

Here in southern ohio/appalchia the coal mining industry took a huge hit and so did industrial in general. Poverty and unemployment in many counties here is above national average. People are scrambling to try and figure out what to do. there are workers but there are no jobs.

I've heard the horror stories about the way thigns where back in old USSR socialism. This is why a socail credit or a communist state would have to learn from these mistakes. Work out the flaws and form a more equitable sort of resource distribution. I am sure it could be done. If the proper motivation was there. Right now the rich and power like being rich and powerful and dont want to share or do anything that might reduce their chances of staying rich and powerful or spreading it thin with new members to the rich boys club.

Raps: Unions are not all as bad as the ones that get on the news. I'll agree that the unions themselves have changed and are now in many ways part of the problems in stead. BUt still a properly run and controlled union is better than no union at all. As long as the union and its members recognize that the best interest is for the many and whole together than each individual. And as for the us vs them attitude management had developed that attitude as well. AK Steel here is one palce that has a management that is very anti employee. Multiple OSHA violations, horror stories from former employees but thanks to the union they have had some decent pay and the excesses have been managed to be held in check. In many ways it can and is a war with each side trying to wring the most use and resources out of the other. Instead of working together.

The training thing used to be a part of union membership also apprenticeship programs to get into the jobs. Unfortunately the amount of cuts that have come about have reduced those programs. Also the big unions have had some people get into power that where more concerned with the power they could acquire.

[protege]

Protege: I was a little kid back in the 70s so I didnt live throuhg that stuff much. The factory dad worked at did shut down back in the 80s due to the management using it as a tax dodge we later found out.

I remember seeing the mills when riding downtown, or even in some of the mill towns years ago. I didn't know it at the time, but they wouldn't be around much longer. Pittsburgh got hit hard when the steel industry left. Nearly a million people left town afterwards. Some areas, like Homestead, have slowly started to recover. Others, like Duquesne and McKeesport, probably never will.

The reason I remember all this..is my father's advertising agency started having trouble around this time. Many of his clients were either the mills...or suppliers to the mills. As they went bankrupt or left town, things got tougher for us. Eventually, we closed the agency, and he was unemployed for awhile. Trust me, it sucked.

If you want an interesting story...look up Jock Yablonski sometime. He wanted to clean up the corruption plaguing the United Mine Workers union and ran for president. But, before the election was over, he, along with his family, were murdered by hired thugs on New Year's Eve in 1969. http://en.wikipedia.org/wiki/Joseph_Yablonski

[rahmota]

Protege: Yeah I saw the movie they made from that when I was going through my Charles Bronson tough guy phase. Hell'uva way to get action done.