Friday, October 03, 2008

So You Wanted A Crazy Solution?

So the "rescue" bill passed, the market farted and all is still completely screwed up in the world. I'm still neither happy or unhappy about it because truthfully I'm much more interested in the dynamics of who voted which way on both the first and second bills and more importantly...why.

Fascinating that we had to add another $100 billion in fixin's to that crap sandwich to get supposedly "conservative" republicans to eat it, isn't it? Of course we had our own Democratic Congresswoman Shelley Berkley who after being staunchly opposed to the first bill, eagerly gobbled up the second as quickly as my beagle eats his own turds. Nice to see irresponsible and capricious voting while the country is going down the poophole is bipartisan anyway.

Meanwhile I came up with my own "rescue plan" for the economy which took all of, I don't know, maybe 15 minutes.

1. Eagerly endorse and embrace same-sex marriage then launch an international ad campaign openly recruiting qualified gay and lesbian immigrants. We'd attract some of the best and brightest from around the world along with their assets both intellectual and worldly. Think of the lovely shops we'd get.

2. Raise the minimum wage to $12 an hour, phased in over the next 8 quarters, thereafter tied to core inflation and adjusted annually. Bet you wouldn't see much inflation.

3. Revamp the tax code. Close nearly all exemptions with the exception of home mortgage interest and dependent and medical deductions but lock in the 15% capital gains tax rate and lock in a 5% rate for anyone below the 15% tax bracket. Same for dividends. Investments would soar.

Sounds pretty crazy I'm sure but it's about as sensible as anything that's been proposed and far less looney than anything the McCain camp will do given a chance.

8 comments:

S2 said...

"Raise the minimum wage to $12 an hour..."

That would bring you up to about the same level as most of Europe.

When the minimum wage was introduced in the UK in 1998 there were lots of scare stories about how this would cripple the economy, but that hasn't happened (despite annual increases in excess of inflation).

Sadly, though, our bankers seem to be as stupid as yours.

Not Your Mama said...

Of course it wouldn't crash the economy, the economy is crashing for a lack of consumers with any money to spend.

Of course trying to explain that to almost anyone in America is like talking to a head of cheese.

Nader Enthusiast said...

I have a couple:

I agree with this farmer about a maximum wage.

Legalize drugs and tax the hell out of them - release users an put fraudsters in their cells.

Woozie said...

And plus, with no kids, we gays have tons more disposable income to dump into the economy.

Not Your Mama said...

'zactly.

S2 said...

nader enthusiast - your farmer link appears to be broken?

Nader Enthusiast said...

s2: It is kind of short so I hope Not Your Mama doesn't mind if I post it here.

I have to stop reading the papers. It's just not good for my blood pressure.

Actually, maybe the thing to do is read just one. It's when I start comparing stories that I get tense. Nothing like getting all the facts to confuse the issues. And math -- math is a big mistake. Mr. Melby did me no favors by being such a good math teacher.

Here's the deal. I read an article about how the factories that opened in northern Mexico after NAFTA are now starting to shut down. Companies left Detroit and many other big cities because they said they needed to hire cheap employees in order to remain competitive in a global market. That was about ten years ago; and now those employees in Mexico are getting too expensive. Why, some of them are making over $4,000.00 a year. In the past two years, nearly 500 plants have shut down – many of them moving to China -- because there a worker will assemble computers for $1,182.00 a year.

"So," you might say, "it's a hard old world. I like my cars and appliances cheap. By all means, we need to keep the labor bills low."

That's where having two sources of information becomes such a bother. The same day I saw the factory story I read a different article, on a different topic, but the two linked together. I couldn't believe the figures in the second article, so I looked up the data for myself. In 2002, the average pay of a CEO was $10.8 million. That's not the top five, by the way. That's an average from the top fifteen hundred publicly traded companies. Now, granted, when a few guys make $3-4 hundred million, it does skew the curve a bit. But, still, these boys are doing okay.

I started doing some math. If you multiply 10.8 million by 1,500, you get 16.2 billion (that's with a B) just for head-guy pay. I'm not including all the other members of top management; my calculator doesn't have enough digits to figure that amount of money. Now if these guys could take, oh, let's say, a million dollars a year in salary, which, frankly, many of my friends would consider a fair living wage, we would free up $14.7 billion for other uses. That's a lot of money. That amount would give about 3,500,000 jobs, or if you wanted to bring jobs back to America it would provide $40,000.00 a year jobs for 330,000 Americans. It seems reasonable. Fifteen hundred guys, and a few women, are cut down to a million a year, and in exchange, we put 330,000 people back to work at good wages.

I think a million a year sounds fair. It's not as if these guys are football players, one torn ligament away from the end of their career. Executives can keep working as long as they're capable of knotting their ties. After taxes, even in Minnesota, a million-dollar paycheck would give you about $2,000.00 every day in spendable cash. If you can't live on that, you're too dumb to run a major corporation.

My point here, and I have a couple, is that we've put up with moving so many of our manufacturing jobs overseas because we've been told, repeatedly, that's the price we need to pay to remain competitive. Actually, that's the price we pay so CEOs can line their pockets. That puts a little different spin on it. Keep in mind, some of those $11,000,000.00-a-year guys sat in boardrooms and made the decision to move factories from Detroit to Mexico and blame the unions, then moved the same factories from Mexico to China because those Mexicans were making, at $4,400.00 a year -- too much money.

Don't get me wrong -- I'm not some old-line Commie, urging that the wealth of the owners be distributed to the people. I actually like rich people, particularly the ones who start with a good idea, take risks, and become extravagantly wealthy. I'm not talking about them; I'm talking about the hired hands with the nice suits who run the companies built by other people. These are publicly traded companies, meaning the people who buy stocks, probably some of the same people who've been laid off, own them. It'd be interesting if at the next stockholders meeting there were an agenda item like this: "Which would you prefer, that we pay our CEO $11,000,000.00 or use some of that money to keep people working?"

I know how I'd vote.


Copyright 2003 Brent Olson

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