One of us doesn't get it.
I'm watching commentators discuss executive pay caps and I am reading a forum where posters are talking about how great it would be if companies were legally banned from outsourcing jobs or taxed for doing so.
Now I assume that the posters believe that the result would be that we would all be employed with nice high paying jobs.
As best I can tell folks, that simply does not work. Well it does not work as long as we are working a basically capitalism framework. Maybe it works in some other; say socialist, economic framework, but not capitalism.
How come?
Because for the exact same product made to the same high quality, who in their right mind is going to buy the more expensive one? Oh, because of service. No deal. I'm talking about the same product, same service, same everything other than price.
So OK, maybe we have the government pass laws to force us to buy American? That doesn't help either. The rest of the world will buy the cheaper product made elsewhere. So they have more money to buy other stuff. Money we now don't have because we bought those government mandated higher priced products. So the rest of the world becomes just a little bit richer compared to us and we become just a little bit poorer.
So how did that buy American law benefit us? Well it did save those jobs, but the reason was that we all contributed to those workers employment by paying higher than market prices.
So you say, "OK, but you assume we're all greedy. What if we are generous and agree to buy our neighbor's product rather than some foreign product?" Unfortunately Virginia, it still doesn't work.
Let's take a very simplistic example. The only products are shoes and shirts. Assuming all the workers produce a single product, workers in CountryA can make 100 shoes per year, but only 50 shirts. Conversely, workers in CountryB can make 100 shirts per year, but only 50 shoes. We all want to just get along so we agree to make our own stuff. So we put 1/2 the workers in each country to work making shoes and 1/2 making shirts. CountryA produces 50 shoes and 25 shirts. CountryB produces 50 shirts and 25 shoes. So the world GDP is 75 shirts + 75 shoes. If we let the workers do what they do best, CountryA produces 100 shoes and CountryB produces 100 shirts. Under this plan the world GDP is now 100 shirts + 100 shoes. The world is simply richer when the products and services are done by the workers who do the job best.
What about the argument that says our national security requires a steel industry or fighter airplane industry? A society may certainly decide that those things are so important that they need the security of keeping that industry at home. The only thing we need to remember is that protecting industries or jobs is no free ride. We have to pay for it. If we are not the most efficient producers of these products, if we artificially subsidize them, we all become a little poorer than we would be otherwise. Maybe that is the right decision. But it is a decision we need to make with our eyes open as well as our hearts.
2009-03-31
2009-03-20
No More Handshakes
Remember those yesterdays when we used to say "A man's word is his bond"? Or maybe one of those old movies where when hero is asked to sign a contract or agreement and he responds with how his handshake is all that is needed?
Did this ever exist?
I have never seen it. Well maybe I have to some extent.
I did buy my first car for $65. I handed over some cash and I got the state title and keys. This was an 8 year old car with around 110,000 miles on it, no dash lights, no working gas gauge, and a bad transmission. Was that deal the same as our mythological handshake? I guess it was close, but maybe not. The risk to the seller was nil. He got his $65 in cash. My risk was $65. Granted, this was back in the "good old days" when a dollar was a dollar but even then, if the wheels fell off on the way home, the loss of $65 was not going to put my entire life in to a tail-spin. So perhaps my example is but a pale imitation.
When I bought my house or when I bought my first new car, I had long complicated contracts that I did not understand anymore than anyone else.
So fast forward to yesterday. If you believe the media, every single member of the public is simply outraged by the bonus checks for AIG employees.
Well, that is not correct. I am not.
As best I can tell, at least some of these are essentially performance payments for employees who have worked and earned them. Perhaps not all of them. Details are sketchy as our media never wants to provide us with anything more than thin sound bites.
But does that matter?
These bonuses seem to be handed out now because they represent a year's worth of performance. Well that means people made these deals before our impending meltdown was known. Perhaps lots of people should have known, but how many of us knew where we were heading a year ago. It is my understanding that quite a few of the AIG divisions made a profit last year and were well run. That the problem that threatened to topple the company was in one or two specific areas.
Last fall, our government decided to bail out AIG. These bonuses were six months old. Seems like they were not hidden. When the stimulus package was passed, these bonuses were known. How are we sure? Well because they wrote an amendment in to protect them.
My outrage is that our government would dare to rip up a legal contract in response to the drumbeat of public polls. Now if they said to AIG last fall or last month, "listen, you want the money, you renegotiate the contract", I would say "that's fair". That would be the deal. But no, the government comes in after the fact and breaks a deal they were not party to. Breaks a deal that THEY wrote in to the law of the stimulus package.
How will you like it when you next buy a savings bond, wait say seven years for it to mature and then be told that there is a 100% fee to cash it in? Sound fair to you? Well that is exactly what the government is trying to do to AIG.
One day Chris Dodd says he doesn't know how the amendment got there. The very next day he admits that someone in Treasury pressured him to do it. Charlie Rangel says one day that the tax code does not exist to selectively punish individuals and the next day he has some BS reason why doing exactly that is ok. What about the Olympia Snow amendment: "Financial institutions that used "federal bailout" funds to pay employees bonuses in excess of $100,000 will be required to compensate taxpayers under a provision that will be introduced today by U.S. Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine)." Clearly this situation was known and anticipated. Why did this amendment fail?
Were are our leaders? They certainly are not leading.
President Obama says he has inherited this mess. Oh really? Didn't he vote 'Yes' last fall? Wasn't this his stimulus package? Geithner says he takes responsibility but not the blame. Obama says he takes responsibility but not the blame. Tricky Dick Nixon is that last one I remember saying that. Didn't buy it then and I don't buy it now.
Come on America. Your word is your bond. The honor comes from keeping it. You show your worth when keeping your word is hard, not when it is easy. Let these guys keep their bonus. Figure out where YOU went wrong and fix it.
Oh and while you're at it, President Obama. Senator Dodd. How about giving back those large sums of campaign contributions you got from AIG.
Did this ever exist?
I have never seen it. Well maybe I have to some extent.
I did buy my first car for $65. I handed over some cash and I got the state title and keys. This was an 8 year old car with around 110,000 miles on it, no dash lights, no working gas gauge, and a bad transmission. Was that deal the same as our mythological handshake? I guess it was close, but maybe not. The risk to the seller was nil. He got his $65 in cash. My risk was $65. Granted, this was back in the "good old days" when a dollar was a dollar but even then, if the wheels fell off on the way home, the loss of $65 was not going to put my entire life in to a tail-spin. So perhaps my example is but a pale imitation.
When I bought my house or when I bought my first new car, I had long complicated contracts that I did not understand anymore than anyone else.
So fast forward to yesterday. If you believe the media, every single member of the public is simply outraged by the bonus checks for AIG employees.
Well, that is not correct. I am not.
As best I can tell, at least some of these are essentially performance payments for employees who have worked and earned them. Perhaps not all of them. Details are sketchy as our media never wants to provide us with anything more than thin sound bites.
But does that matter?
These bonuses seem to be handed out now because they represent a year's worth of performance. Well that means people made these deals before our impending meltdown was known. Perhaps lots of people should have known, but how many of us knew where we were heading a year ago. It is my understanding that quite a few of the AIG divisions made a profit last year and were well run. That the problem that threatened to topple the company was in one or two specific areas.
Last fall, our government decided to bail out AIG. These bonuses were six months old. Seems like they were not hidden. When the stimulus package was passed, these bonuses were known. How are we sure? Well because they wrote an amendment in to protect them.
My outrage is that our government would dare to rip up a legal contract in response to the drumbeat of public polls. Now if they said to AIG last fall or last month, "listen, you want the money, you renegotiate the contract", I would say "that's fair". That would be the deal. But no, the government comes in after the fact and breaks a deal they were not party to. Breaks a deal that THEY wrote in to the law of the stimulus package.
How will you like it when you next buy a savings bond, wait say seven years for it to mature and then be told that there is a 100% fee to cash it in? Sound fair to you? Well that is exactly what the government is trying to do to AIG.
One day Chris Dodd says he doesn't know how the amendment got there. The very next day he admits that someone in Treasury pressured him to do it. Charlie Rangel says one day that the tax code does not exist to selectively punish individuals and the next day he has some BS reason why doing exactly that is ok. What about the Olympia Snow amendment: "Financial institutions that used "federal bailout" funds to pay employees bonuses in excess of $100,000 will be required to compensate taxpayers under a provision that will be introduced today by U.S. Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine)." Clearly this situation was known and anticipated. Why did this amendment fail?
Were are our leaders? They certainly are not leading.
President Obama says he has inherited this mess. Oh really? Didn't he vote 'Yes' last fall? Wasn't this his stimulus package? Geithner says he takes responsibility but not the blame. Obama says he takes responsibility but not the blame. Tricky Dick Nixon is that last one I remember saying that. Didn't buy it then and I don't buy it now.
Come on America. Your word is your bond. The honor comes from keeping it. You show your worth when keeping your word is hard, not when it is easy. Let these guys keep their bonus. Figure out where YOU went wrong and fix it.
Oh and while you're at it, President Obama. Senator Dodd. How about giving back those large sums of campaign contributions you got from AIG.
2009-03-04
Guilty by Imagination
The truth does not come from your imagination.
It's on the left. It's on the right. I too often get in to discussions, well maybe arguments, about things political. And almost always, my counterpart is just making it all up.
Some examples.
Bush lied.
I have never seen any cojent argument on this other than, "well they didn't find any, did they?".
What is a lie?
Dictionary.com's definition is:
"a false statement made with deliberate intent to deceive; an intentional untruth; a falsehood"
Seems like the definition I grew up with. Intent is of course difficult to prove, but the preponderance of evidence could be telling. So what do we know? Sadam Hussein gassed the Iranians and the Kurds. So he had WMDs at some point. I have seen reports of IEDs that contain chemicals of some sort. So where is the evidence that the president knowingly and purposely lied?
I heard on the radio today a comparison of how the left or maybe it was the white house is out to get Rush Limbaugh. They were compared to the Nixon enemies list. We the audience are asked "What is the difference?" Well the difference is that Nixon did have a list and the right pundits are speculating. Maybe the Obama does have a list, maybe not. I'll perk my ears up when there is some hard evidence.
I was watching one of the cable news channels a week or two ago and listened to how the simtulus bill had all these earmarks. Now I'm one of the few voters who actually have read this thing. Not all of it, but a lot. Probably more than any of the representatives or senators if reports can be believed. I specifically looked for earmarks and couldn't find any. The cable guy was arguing that this or that really amounted to giving money to Nancy Pelosi's mouse. Well I did search for 'mouse' and a couple other possible keyords mentioned at the time.
Hits: none.
So did the commentator tell us what it was? Did he provide any proof? Any link to show what piece of the bill was really going to the mouse? Not a chance.
I recently had an argument in a forum with another poster. This is an anonymous board, but I happen to know the poster. And to be fair, he knows who I am as well. The argument was about unemployment. He claimed that near the end of the senior G Bush term, unemployment was over 10%. Apparently he had lost his job at the time. Well I went to a federal government site and found it simply was not true. So I posted that and asked where he got his numbers from. The response was that well it must have been in New Jersey and he got his numbers from a county employee. So I went to the official New Jersey site and dug up those numbers. Again, unemployment did not come close to double digits. I think I even found the numbers for his county and the results were the same.
I am really tired of arguing with people who make this stuff up. If you are really right, your guy is better than my guy, your policy ideas are better than mine, try arguing based on facts and the truth.
If you are interested, take a look at my unemployment figures. Take another look. See those national debt numbers? So which year did Clinton have a surplus? And if we actually had a surplus, how come the debt goes up and not down?
It's on the left. It's on the right. I too often get in to discussions, well maybe arguments, about things political. And almost always, my counterpart is just making it all up.
Some examples.
Bush lied.
I have never seen any cojent argument on this other than, "well they didn't find any, did they?".
What is a lie?
Dictionary.com's definition is:
"a false statement made with deliberate intent to deceive; an intentional untruth; a falsehood"
Seems like the definition I grew up with. Intent is of course difficult to prove, but the preponderance of evidence could be telling. So what do we know? Sadam Hussein gassed the Iranians and the Kurds. So he had WMDs at some point. I have seen reports of IEDs that contain chemicals of some sort. So where is the evidence that the president knowingly and purposely lied?
I heard on the radio today a comparison of how the left or maybe it was the white house is out to get Rush Limbaugh. They were compared to the Nixon enemies list. We the audience are asked "What is the difference?" Well the difference is that Nixon did have a list and the right pundits are speculating. Maybe the Obama does have a list, maybe not. I'll perk my ears up when there is some hard evidence.
I was watching one of the cable news channels a week or two ago and listened to how the simtulus bill had all these earmarks. Now I'm one of the few voters who actually have read this thing. Not all of it, but a lot. Probably more than any of the representatives or senators if reports can be believed. I specifically looked for earmarks and couldn't find any. The cable guy was arguing that this or that really amounted to giving money to Nancy Pelosi's mouse. Well I did search for 'mouse' and a couple other possible keyords mentioned at the time.
Hits: none.
So did the commentator tell us what it was? Did he provide any proof? Any link to show what piece of the bill was really going to the mouse? Not a chance.
I recently had an argument in a forum with another poster. This is an anonymous board, but I happen to know the poster. And to be fair, he knows who I am as well. The argument was about unemployment. He claimed that near the end of the senior G Bush term, unemployment was over 10%. Apparently he had lost his job at the time. Well I went to a federal government site and found it simply was not true. So I posted that and asked where he got his numbers from. The response was that well it must have been in New Jersey and he got his numbers from a county employee. So I went to the official New Jersey site and dug up those numbers. Again, unemployment did not come close to double digits. I think I even found the numbers for his county and the results were the same.
I am really tired of arguing with people who make this stuff up. If you are really right, your guy is better than my guy, your policy ideas are better than mine, try arguing based on facts and the truth.
If you are interested, take a look at my unemployment figures. Take another look. See those national debt numbers? So which year did Clinton have a surplus? And if we actually had a surplus, how come the debt goes up and not down?