I just thought I should make my readers aware of a new faction within Congress called the 'Blue Dog Democrats'.
Apparently, these are fiscally responsible Democrats banding together to make sure laws enacted by a Democratically controlled Congress are either fiscally sound or follow the President's mandate of revenue neutral (WSJ Article).
This idea gives me pause: At what point in the election of representative lawmakers did these same statesmen decide that bad law is ok despite the ability to pay for it? Am I naive in thinking that this has always been the case?
This reminds me of an incident while working at Brooks Brothers during college. A famous (to remain unnamed) Rep. MN Representative visited the store and purchased a custom-made suit (rough cost: $2000).
A month later, when receiving the bill, he returned the suit and said, 'it just didn't fit right' (i.e. he didn't want to pay for it even though he used the suit for official campaign functions throughout the month and was seen in the newspaper, on TV, etc.). (NOTE: it also meant a charge-back, much to the dismay of one college employee, of commissions for the return of the suit)
It then struck me: Lawmakers want all of the press and the glamour of creating law simply for publicity and getting something passed.
But when it comes to paying for it (budget cuts, program cuts, increased taxes), they disappear and are nowhere to be found. The taxpayers, those who elected the officials, are the ones who pay for it. Nancy Pelosi's statements referenced in this article are representative of this opinion.
It's not unlike a conversation with a 10 year old:
Dad: Did you finish cleaning the car?
Son: Yes
Dad: Did you clean out the front seat and vacuum?
Son: You didn't tell me to clean out the front seat and vacuum.
Dad: Did I tell you to clean the car?
Son: Yes
Dad: Clean implies that it is not dirty.
Son: Ok
(Repeat 5 times)
It seems obvious to me that bad law is more costly than enacting the proper laws even if it takes longer to get them done. The House is trying to pass a Health Care reform package too hastily just to say that they have got it done, despite its obvious flaws.
How about something different? Why not work together to make law that is constitutionally sound, fiscally responsible or cost saving, and socially beneficial? Corporations continue to strive to fine-tune their products and services, resulting in better products for less money. Why can't the biggest employer in the nation do the same?
Grace & Peace
PLW
Corporations continue to strive to fine-tune their products and services, resulting in better products for less money."
ReplyDeleteYou mean like all the products that are now made overseas with slave-wage labor, using sub-standard(and dangerous) materials? Or do you mean 'services,' the likes of which Verizon, Comcast, and Citibank provide? Don't make me laugh. Corporations are out to make money, which is quite independent of the quality of products.
The federal government is NOT a corporation. The services the government provides are not money-making ventures(with a couple of exceptions). If you want to privatize roads, postal services, and air traffic control, fine. Just tell me what you're going to do with the millions who currently receive public assistance in the form of OASDI payments, food stamps, and health care for the poorest among us(and the elderly). And remember, the plan must be viable. Simply letting them die does not constitute viable.
People want governmental services, but don't want to pay for them. This is the quandry that has existed since the nation was founded.
Only the government 'wastes' money, right? Well, what do you call multi-million dollar salaries given to exectutives for poor performance? What about golden parachutes, lunches on the company dime, and travel in private jets? How do these help lower the cost of goods and services for the consumer? Simple: they don't.
But at least when you spend money on private sector goods and services, it's a choice, right? Wrong. Explain to me how eating, wearing clothing, and having a roof over your head is a choice? I suppose if just curling up in a ball in a field somewhere and dying is a choice, then so are the necessaries of existance.
You can argue that the government is too darn big, that we now live in a society where everyone expects to have it all. But the example of the congressman returning the suit isn't an example of governmental waste. It's an example of being a jerk
Corporations exist to make money, of course, otherwise they wouldn't be able to provide taxes for local, state and federal governments, benefits, salaries, wages, charities and support the highest standard of living of any country in the world. Obviously its a very simbiotic relationship but my point is that corporations don't spend money if they don't have it. Especially right now (just ask Lehman Brothers). Our government spends without the means to pay for it.
ReplyDeleteCorporations only go overseas because of profit conditions in America (to your own admission), and don't have to pay unusually high labor rates due to irrational unions that would rather see companies go bankrupt verses reducing benefits and salaries and union dues (GM, Chrysler, etc).
I think government is a LOT closer to a corporation than you think, and thus our problem. Less government programs would equate to higher charitable and non-profits stepping up to provide those benefits (much of those supported by corporations). To what extent? I don't know but I would bet you that private enterprise would run a more efficient social service (with no profit motive) because the labor is better.
There is no doubt that corporations waste money. Headlines all of the time bear out the fact of golden parachutes, etc. However, the accountability for such 'waste' is different. For the most part, as long as stockholders are seeing an increase in their stock price and earnings, and they are happy with their performance, they don't fire the board members or CEOs. They have the right to vote people out and often do (CITI, GM, etc.). But UNLIKE our elections for lawmakers, they simply don't because no-one votes despite the irregularities and the wastefulness. Why? Not sure. Probably has to do with no tangible product, somebody else is paying the bill, etc will probably put you on the right track.
Spending money on private sector goods is close to revenue neutral, in my opinion. It benefits the employee providing the service, who pays taxes, hires other people who pay taxes, and uses the profits to spend (70% of US GDP is based on consumption). Those taxes support those inefficiently run government programs you like so much for the growing minority (41% in the US-www.taxfoundation.org) ) that don't pay taxes.
Spending is ALWAYS a choice. How you eat, drink, live, etc. is a choice but its SHOULD be based on the income you provide. Some people chose to spend very little and live very frugally. Some the opposite.
A society in which 41% of the population expect to live without contributing will be very short-lived.
I would agree, however, with your assessment of the congressman...
Thank you for responding. And for giving me an opportunity to respond.
ReplyDeleteI acknowledge that corporations (for the most part) pay taxes, income and otherwise. But you did not address my criticism of your statement that "...corporations...strive to fine-tune their products, resulting in better products for less money." Please tell me how this "Wal-Mart" model has resulted in BETTER products? And with real wages for the bottom 80% stagnant since the year I was born (1969), I'd like to know how they are effectively cheaper? Cheaper for the top 20%? Certainly. No argument here. What about the others?
"...Corporations...don't spend money if they don't have it."
I'm actually surprised you wrote this. But I'm sure it was just a slight oversight. You do realize that corporations carry debt, which, incidentally, is how the government is financing more and more expenditures these days. You may not like the WAYS (outlays), but the government always has the MEANS (receipts) because it has the ability to tax and to borrow (both are afforded powers manifested in the US Constitution).
"Corporations...go overseas...because of profit conditions in America...and irrational unions that would rather see companies go bankrupt..."
Ah yes. The big bad unions. The 7% that the other 93% are so afraid of. It's a nice bit of hyperbole to call them irrational, but I hope you realize that most of the jobs being sent to foreign nations are NON-UNION jobs and industries. Corporations are doing it to circumvent the cost of labor here, just like Northern US firms opened factories in the Southern US to circumvent labor costs in the last century. We had an answer to that...the minimum wage. But don't price floors create shortages? I'm sure you remember the concept of elasticity in your days as a student, so I'll leave it there.
"Less government programs would equate to higher charitable and non-profits to step-up and provide those benefits..."
Have any proof of this? Any at all? What charity is going to step in and take the place of Medicaid or Medicare? Or food stamps? Better be a pretty big one.
Oh, and as for your comment about "(much of those [charities] supported by corporations)," I agree. Corporations do give money to communities and charities and the like.
In fact, the local mega-grocer here in the town where I reside puts facimile checks on the wall to announce such giving. Correct me if I'm wrong, but just as you're supposed to fast in silence, aren't you supposed to give without publicizing it? To me it smacks of just another "cost of business," and not a charitable contribution.
"Private enterprise would run a better social service...because the labor is better..."
Uh...tell me, which private enterprises run social services? And how is their labor better? Or are you suggesting that 'private sector' labor is just simply better than public sector labor? I'm sure you'll provide examples. I can hardly wait.
My comment was not about corporate earnings and stock price--it was about waste. You can still have earnings and waste a lot of money. It doesn't mean there isn't waste.
As for shareholders exercising their rights, come on. You and I both know that retail investors don't own corporations. Look at any big corporation's ownership composition--it's comprised of OTHER corporations(and sometimes the US gov't now!)! You cite Citibank, GM, et al...well, I hate to break it to you, but NONE of those board members were ousted by shareholder revolt. In fact, I don't believe it's EVER been done in the US. (I think it came close to happening at Disney one year.) GM's board was changed as a condition of government loans; Citi's current CEO Pandit was board-appointed, his successor, Chuck Prince, resigned; neither are a product of shareholder revolt.
41% of people in the United States don't pay taxes? I find this hard to believe, since it would be awfully difficult to totally avoid sales(use) taxes. Perhaps you will elaborate.
ReplyDeleteI never said I 'like' social welfare programs. I asked for a viable alternative. But putting words in my mouth is a time-honored tradition. It's good to see it alive and well.
And finally...
The U.S. does NOT have the highest standard of living in the world. I have seen them rated no higher than #6. Norway is #1, and Australia and Switzerland, et al, are in between.
Incidentally, here in the U.S., taxes are 28% of GDP. In Norway, they are 43%. My gosh! And they still have a higher standard of living! How do they do it paying all those taxes? Okay okay, that was a jab. But perhaps the subject of another blog.