I am with you. I get the feeling reading the article that this is just setting the stage by adding a little asterisk to the number. In a couple years the asterisk is forgotten and a trend can be shown to push whatever agenda they want. They can show how things are "working" and getting better all we need is a little more of your money or how we "muzzed mank a khange for ze good of ze people"
Law of Diminishing Returns--Why Trickle Down Doesn't Work
A few decades ago, we all saw companies attempting to become more competitive and increase profits by becoming "leaner and meaner"--implementing various efficiency and cost-saving measures. When done in a balanced and reasonable way, that's all fine and good--Capitalism 101.
The problem is that they didn't stop at being "balanced and reasonable"; they went to the extreme and fundamentally changed (actually, "distorted" might be a better word) the face of Capitalism. As more and more companies laid off workers and/or offshored jobs, requiring the remaining workers to become more productive (that, in itself, not being a bad thing), we began the "race to the bottom".
At first, the effects on the economy were minimal and even gave a temporary boost to overall economic indicators. Over time, however, it became obvious that we were seeing the Law of Diminishing Returns in effect as the economic balance of capitalism reached its tipping point. As more people were unemployed or underemployed (or perhaps even remaining in the same job while taking pay and benefit cuts), consumer confidence and spending began to take a dive. This could be most readily seen at the end of the year with reports of decreased holiday consumer spending.
In turn, companies felt it necessary to tighten their belts even further. CEOs who were thought to be able to better manage their companies received unheard of salaries and compensation packages, more and more workers were laid off and the trend continued--unfortunately into a downward spiral. Many CEOs who were so highly compensated turned out to be short-sighted and incompetent, actually on occasion tanking their companies. Yet they were still allowed to collect their Golden Parachutes and go on their merry way at no loss to themselves. Meanwhile, more and more workers continued to get laid off or take further pay cuts, eroding consumer spending even further.
And so it stands today. Companies have become so focused on the bottom line that they fail to see that, in the larger economic picture, they are only shooting themselves in the foot in the long run. They can only erode their own customer base so much before, eventually, there will be too few consumers able to afford their products or services for them to continue to make a profit.
Paradoxically, at the moment, many companies have record profits and Wall Street is doing relatively well. In terms of Capitalism 101, this may seem positive. However, Capitalism 105 (which requires a bit more thought than Capitalism 101) teaches that this trend cannot possibly continue forever if the benefits to Wall Street continually outweigh the benefits to Main Street. If this continues, in the long run the snake will eat its own tail. Or to put it another way, any species that "eats its young", so to speak, will eventually cause its own demise.
Astounding! I didn't know that Capitalism 105 taught that Capitalism works best when you eliminate capital and that we will all profit more by eliminating as much profit as possible! I was also unaware that our U.S. companies were flushed with record capital/profits in this economy. Silly me... I thought that most of it was being printed and sitting in U.S. Banks and in an over-inflated stock market... You see kids, the above is what you are taught when you take economics at a community college..
Say it ain't so! The truth is, it's only going to get worse. Obamacare, though a noble cause, forces businesses of all sizes to provide health care coverage to all full-time workers. However, it is not required for part-time workers. In order to survive in this already tough economy, businesses are forced to cut-back on full-time positions (and pay) in order to keep making a viable profit and stay afloat. The result? More jobs are created, but they're part-time McJobs that require 2-3 people to work at in order to achieve the same output that one person on full-time (with full-time wages) could have done. This necessary evil will destroy both the economy, and small businesses in this country. There is an economic tidal wave coming after the fiscal cliff collapses, and that is how it will happen. Romney would have been no better (he had no plan), we were s*rewed no matter who won the election!
That being the case, it would appear that lay offs of full time workers are on the horizon. What a great fix for the economy! It would create a manpower deficit in a thriving economy, but in this economy it creates part time jobs to fill the gap and the dingbat government will use it to show a reduction in the rate of the unemployed.
There you have it. Years and years of "progressivism" started by Woodrow Wilson, moving on to FDR and LBJ, and now Obama, with the massive entitlements, have done nothing but breed a culture of poverty rather eradicate it.
Please explain how a full time worker can still live in poverty. Some part-time workers will have 2 jobs, because that is all they can get. So, how do entitlements establish poverty for these people? They work as hard as me.
Thomas, so much has been written about what lower federal taxes and less federal government can do for liberty, freedom and prosperity for a very large segment of the country. We are at a point today where the government is taking and then wasting way too much of the resources they steal from our paycheck. Opportunity is harder to come by for many, like the people you mention who work long hours and have little to show for it.
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A few decades ago, we all saw companies attempting to become more competitive and increase profits by becoming "leaner and meaner"--implementing various efficiency and cost-saving measures. When done in a balanced and reasonable way, that's all fine and good--Capitalism 101.
The problem is that they didn't stop at being "balanced and reasonable"; they went to the extreme and fundamentally changed (actually, "distorted" might be a better word) the face of Capitalism. As more and more companies laid off workers and/or offshored jobs, requiring the remaining workers to become more productive (that, in itself, not being a bad thing), we began the "race to the bottom".
At first, the effects on the economy were minimal and even gave a temporary boost to overall economic indicators. Over time, however, it became obvious that we were seeing the Law of Diminishing Returns in effect as the economic balance of capitalism reached its tipping point. As more people were unemployed or underemployed (or perhaps even remaining in the same job while taking pay and benefit cuts), consumer confidence and spending began to take a dive. This could be most readily seen at the end of the year with reports of decreased holiday consumer spending.
In turn, companies felt it necessary to tighten their belts even further. CEOs who were thought to be able to better manage their companies received unheard of salaries and compensation packages, more and more workers were laid off and the trend continued--unfortunately into a downward spiral. Many CEOs who were so highly compensated turned out to be short-sighted and incompetent, actually on occasion tanking their companies. Yet they were still allowed to collect their Golden Parachutes and go on their merry way at no loss to themselves. Meanwhile, more and more workers continued to get laid off or take further pay cuts, eroding consumer spending even further.
And so it stands today. Companies have become so focused on the bottom line that they fail to see that, in the larger economic picture, they are only shooting themselves in the foot in the long run. They can only erode their own customer base so much before, eventually, there will be too few consumers able to afford their products or services for them to continue to make a profit.
Paradoxically, at the moment, many companies have record profits and Wall Street is doing relatively well. In terms of Capitalism 101, this may seem positive. However, Capitalism 105 (which requires a bit more thought than Capitalism 101) teaches that this trend cannot possibly continue forever if the benefits to Wall Street continually outweigh the benefits to Main Street. If this continues, in the long run the snake will eat its own tail. Or to put it another way, any species that "eats its young", so to speak, will eventually cause its own demise.
You are exactly the type of short-sighted bean-counter I was referring to and you completely missed my point. Try again.
How about a war on poverty!