For the sake of argument

[pastorlenny.livejournal.com]

Premise the first
Governments can actually serve a worthwhile purpose. They can build roads. They can maintain relatively stable currencies. They can police private manufacturers to make sure they don’t completely foul up local watersheds.

Because of this—and despite those who claim that government is by definition oppression and taxation is by definition theft—governments may have a legitimate role to play in the optimization of domestic economies and the mitigation of economic injustice.

Premise the second
Private corporate capital has no immediate incentive to optimize the employment of the citizenry. On the contrary, capital normatively views labor as a commodity to be obtained as cheaply and utilized as sparingly as possible. From the Triangle Shirtwaist fire to the battle of Blair Mountain, capital has consistently demonstrated an innate tendency to operate against the interests of the citizenry it employs.

Because of this—and despite those who claim that capital ownership inherently confers upon the holders thereof exclusive rights to the wealth generated by any society’s productive capacity—it is reasonable to posit that some counterforce against capital interests may be required to protect the interests of the citizenry employed thereby.

Be it therefore proposed…
…that the government take certain reasonable measures to incentivize private corporations to allocate some portion of the large amounts of capital currently being held on their balance sheets as cash towards the hiring of the citizenry that said government was duly elected to serve. These incentives would be in the form of one or more types of tax allowances—such as forbearance of payroll taxes on new hires, tax credits for specified increases in domestic employee headcount, etc.

Such incentives would stimulate employment, which would in turn stimulate consumer spending, the housing market, and personal savings. In doing so, it would also drive local and state revenues—while reducing the current burden on government services at all levels.

This ultimately serves the long-term interests of capital holders as well. But, as we all know, sometimes we all need a little help doing what’s best for us. See rehab.

Comments

[pastorlenny.livejournal.com]

It could be worse. Originally, I was going to post about tax breaks for the unborn -- and euthanasia as an extension of Affirmative Action.

[blue-mangos.livejournal.com]

That would have been so much fun!

[rasilio.livejournal.com]

The first premise is true but incomplete. It ignores the fact that just because the government CAN do something that it is not necessarily the best agency for the job. Further the fact that governments can make positive contributions to a society does not change the fact that there is little practical difference between a government and an organized crime ring. In fact several existing governments became governments by beating out all of the competing
criminal rings.


Your second premise is just flat our wrong. It displays astounding levels of economic ignorance in the face of overwhelming evidence to disprove it. It is exactly as valid an economic theory as Intelligent Design is a scientific model for the origin of species.

The fact is that capital relies on labor exactly as much as labor relies on capital. They are a symbiotic relationship and without one the other would die a quick death.

Finally your proposal is just more economic ignorance. Government incentives for hiring can never work because they do not produce any added demand, they merely reduce the cost of employment slightly. However without a market for the products they would produce businesses would still not hire them unless the government was picking up all or nearly all of the tab for their employment. If they were going to do that it would just be cheaper for the government to put them to work directly.

[pastorlenny.livejournal.com]

there is little practical difference between a government and an organized crime ring.

So it is your position that Abraham Lincoln was, in point of fact, a mere criminal?

It displays astounding levels of economic ignorance in the face of overwhelming evidence to disprove it.

That evidence being...?

Government incentives for hiring can never work because they do not produce any added demand, they merely reduce the cost of employment slightly

That's odd. So many observers claim that government disincentives -- to wit, uncertainities about healthcare legislation -- are playing a major role in delaying new hires. Are you saying that this is a false assertion? Or can government only create disincentives, but never create incentives?

without a market for the products they would produce businesses would still not hire them

Are you claiming that there is no market for the products American corporations produce? If so, where is all their new-found wealth coming from?

[anfalicious.livejournal.com]

Government incentives for hiring can never work because they do not produce any added demand, they merely reduce the cost of employment slightly. However without a market for the products they would produce businesses would still not hire them unless the government was picking up all or nearly all of the tab for their employment. If they were going to do that it would just be cheaper for the government to put them to work directly.

The consequence of this argument is that if minimum wages levels are raised it will increase demand, increasing the need to employ more staff, which would increase demand, etc. In fact, one could argue that the best thing to do in a consumerist economy is to share all the profits of the business out amongst the employees, creating greater demand. After all, the employees are going to spend local, not invest in building an Indian power plant. Some sort of joint ownership of the business by the employees would work well with that. I wonder if there is some name for workers owning the means of production ;)

I don't disagree with you, it's just interesting to see a Libertarian arguing for minimum wage increases.

[notmrgarrison.livejournal.com]

there is little practical difference between a government and an organized crime ring.

Don't organized crime rings routinely murder people, and not care much for the rule of law? And are their leaders elected?

[yahvah.livejournal.com]

Well, Lenny, what I see you saying is a government may or may not have an obligation to protect the individual first and foremost. If that's true, Q.E.D.

[badlydrawnjeff.livejournal.com]

You really think that corporations are going to have the customers best interests in mind?

What value is alienating your whole clientele? I don't think everything should be privatized, but I also think the private is going to be the better choice on the whole for most things.

[badlydrawnjeff.livejournal.com]

Because of this—and despite those who claim that government is by definition oppression and taxation is by definition theft—governments may have a legitimate role to play in the optimization of domestic economies and the mitigation of economic injustice.

I don't know how you go from your first point to this.

Private corporate capital has no immediate incentive to optimize the employment of the citizenry.

Hardly universal. In many/most/all(?) service positions, for instance. In the business philosophy that good customer service reigns triumphant, absolutely.

On the contrary, capital normatively views labor as a commodity to be obtained as cheaply and utilized as sparingly as possible. From the Triangle Shirtwaist fire to the battle of Blair Mountain, capital has consistently demonstrated an innate tendency to operate against the interests of the citizenry it employs.

That your most recent examples can be measured in a time distance of century tells me that things have changed considerably, even if we were to accept that your examples were the norm. Labor will always be utilized as cheaply and sparingly as possible, yes - that does not automatically lead to atrocity or conflict.

…that the government take certain reasonable measures to incentivize private corporations to allocate some portion of the large amounts of capital currently being held on their balance sheets as cash towards the hiring of the citizenry that said government was duly elected to serve. These incentives would be in the form of one or more types of tax allowances—such as forbearance of payroll taxes on new hires, tax credits for specified increases in domestic employee headcount, etc.

The government already does this. The results are questionable at best, worthless at worst. Targeted incentives like this assume the problem in business hiring right now is a lack of staff, when it's really a number of other things.

Such incentives would stimulate employment, which would in turn stimulate consumer spending, the housing market, and personal savings. In doing so, it would also drive local and state revenues—while reducing the current burden on government services at all levels.

What you're calling for is an indirect form of stimulus. Targeted stimulus has no modern record of success. Why you think targeted, as opposed to general, cuts will do better, I'm not sure. You don't go into much detail as to why it would work.

I'm interested in seeing where you're ultimately heading with this. I'm also curious as to why you think that targeted tax incentives, as opposed to significant cuts on business and corporate interests or a complete overhaul of the regulatory burdens, would be the better alternative.

[pastorlenny.livejournal.com]

I don't know how you go from your first point to this.

You're saying that governments have no legitimate role to play in the optimization of domestic economies and the mitigation of economic injustice -- despite the fact that they are capable of maintaining relatively stable domestic currencies?

In the business philosophy that good customer service reigns triumphant, absolutely.

What does this have to do with achieving high levels of employment or healthy wages?

Targeted stimulus has no modern record of success.

The GI Bill and the home mortgage deduction being particularly notable failures, I assume.

[pastorlenny.livejournal.com]

Short version: it is good when less workers can produce equal or more goods.

You mean fewer workers. The example of China is not useful in modeling the US economy, because we are at different stages of development. And, of course, it is amusing that you use the word "good." It is also telling that you maintain that people are a "resource" -- and that you support this position by referring to that most productive of all human endeavors, warfare.

It is also interesting that you do not distinguish between the application of available private capital and government spending.

it's production that determine a society's wealth

Do you include lending money at interest and/or speculating on oil futures to be "production?"

[pastorlenny.livejournal.com]

1. I am generally opposed to raising taxes. I'm not sure why you would ask this, though -- because I don't think I've ever proposed tax increases anywhere in this community.

2. Government spending can be quite lovely if a government has money to spend. This is not the present case in the US. But government spending is not generally an equivalent substitute for consumer spending -- because governments don't buy homes or Kinects.

[kylinrouge.livejournal.com]

Eh, your solution doesn't mean much to me. Some people in this community have claimed that all that will happen is people will hire for the express purpose of obtaining these tax credits and then will promptly fire those people. Of course, I don't buy that prediction at all, but I don't like your solution for other reasons.

Mainly, it reeks of supply-side shenanigans. Why not enable the populace to have more options of employment, either through a greater focus in education or less reliance on the kind of security that employment brings? One argument for single payer is it removes the mandate from employers to provide health insurance, which frees up their capital to hire more and pay more, but at the same time it frees up people seeking jobs from going into jobs where they're under-insured or under-paid. They have more options of which job to go into because their health care isn't tied to it.

Basically, make it easier for people to get jobs on the demand-side, not force companies to go out of their way to hire people because they have these 'incentives' to do it, without which they would not do the hiring.

[pastorlenny.livejournal.com]

it reeks of supply-side shenanigans

I think we want to be careful about objecting to something because of what it "reeks of." For example, we might not want people to object to a potentially successful program for UHC simply because it "reeks of" socialism or some such. Also, what I propose has little to do with supply-side economics -- which is a macroeconomic theory regarding taxes and production (supply), rather than the targeted application of tax policy for social ends.

a greater focus in education

I am a little skeptical about this at the moment, because we have lots of well-educated and unemployed people. It's a separate issue -- but my sense is that there is a lot of hype around the relationship between college education and employment. Maybe we can do another post about this.

it frees up people seeking jobs from going into jobs where they're under-insured or under-paid. They have more options of which job to go into because their health care isn't tied to it.

I think this is a very interesting point. Again, it might be worth a post of its own.

[eracerhead.livejournal.com]

Corporations would hire more people if there were less overhead. A major portion of that overhead is health insurance. This places us at a competitive disadvantage with foreign countries, most of whom have these costs externalized to the taxpayer. Another major source is payroll taxes associated with social security and medicare. This tax is 15%, not 7.5%. These costs should be borne completely by the worker as the business gets no benefit from it. IMO, it was conceived as a way to hide the full cost from the citizenry.

Do even one of these two things and we are likely to see a large increase in hiring.

[mrbogey.livejournal.com]

'This places us at a competitive disadvantage with foreign countries, most of whom have these costs externalized to the taxpayer.'

Most other countries have a much higher tax rate. They also have a greatly reduced GDP. It doesn't seem on a cursory glance that it's helping them be competitive. Is there a factor I'm missing?

[badlydrawnjeff.livejournal.com]

Health insurance is not overhead, but rather optional compensation. They offer it because they need to in order to get better workers.

[sandwichwarrior.livejournal.com]

I accept your initial 2 premises but would like to propose some additional questions/thoughts.

Question: Is employment for the sake of employment a public good? We could hire one man to dig ditchs, another to fill them in, but is this not a waste of time/resources? Sure, everyone would have a job but would this actually lead to a just or productive society?

Alternate/additional Premise: The Capitalist is dependant on his workers, therefore it is in the Capitalist's long-term interests to treat his employees well. Happy employees will be willing to work harder for less and are less likely to string up thier boss if things go sideways.

(The trick of course is somehow convincing people to think in the long term)

Additional Premise: Just as the Capitalist is dependant on his Workers, the Workers are dependant on the Capitalist. Say Bob works in a factory building tractors, could bob build a tractor if he didn't work in the factory? Probably not. The Capitalist provides Bob with facilities, training, raw materials, and a wage. Bob Provides the Capitalist with tractors, they have mutually dependant and symbiotic relationship.

Random Thought, Neo-Communism/Unionism: What if rather than traditional the traditionally confrontational style of collective bargaining unions set up mutual funds. Union members would pay thier dues into this fund and the fund would purchase shares in the company. This fund would quickly come to control a signifigant portion of the company's total stock thus giving the workers a voice in the board room and a position among the share-holders not based on coercion (strikes).
When an individual worker reached retirement, sufficient senority, they would be allowed to liquify thier shares giving them a juicy severance package/nestegg.

It's Marx's dream of workers owning the means of production only without all the Violence and Jingoism.

[pastorlenny.livejournal.com]

We could hire one man to dig ditchs, another to fill them in, but is this not a waste of time/resources?

I don't think anyone has suggested anything remotely like this.