An Economic Truth

For months, I've been telling my friends that the bad economy cannot be fixed by the government alone, nor is it the government's sole fault that we're in this mess.  Yes, the deregulation that started under Ronald Reagan and continued through Bush I and Clinton before it imploded on Bush II has to take a lot of the blame.  The tax cuts on big business have hurt the economy, as well, even as we hear the battle cries from the far right to cut them some more.

However; the bigger slice of the blame game needs to be laid at the feet of the companies themselves.  Our government is in their pockets and have made it easier for the companies to only look out for themselves in the last thirty years, but We the People have elected them.  As long as companies don't hire American workers to work in American plants and as long as the American government doesn't place a high tariffs on non-American made goods coming into this country, we will continue to have high unemployment.

For example, according to this week's Bloomberg Businessweek (pg.50), Apple employs 25,000 Americans.  Sounds impressive, doesn't it?  That is until you learn that Apple's products are made by Hon Hai Precision Industry in China.  Hon Hai Precision (AKA Foxconn) employs 250,000 employees to build Apple products.  Do the math - for every 10 Chinese employee, Apple has 1 lone American employee.

Yes, but Julie, that's because our unions are demanding such hire wages, I hear you say.

Uh, no.  Unions aren't as powerful as they once were - for one thing - and for another, you don't believe that a worker on the factory floor deserves a fair wage for his or her work?  I could get into all that anti-union rhetoric, but I'll save it up for a later article.  In a nutshell, anyone who lays our economic problems at the feet of unions is someone who has never read a business magazine, gone to college or is making millions as a talking head.

The need and greed for high profits is what's causing the massive overseas drive of American jobs.  And, because there is no moral hazard - such as taxes or tariffs - companies will continue to drain our population of jobs.  

And, it is not just the big companies.  

I know of a company with less than 1000 employees - right here in southeast Wisconsin - that has a temporary need for one employee.  Rather than hire an American, they've contracted a company in India and now an American employee is training an Indian employee over the phone to do this job. And, it isn't a call center job.  And, there isn't a union employee in sight. 

Really, Julie?

Yes, really.

In conclusion, this economy has just been brewing for the last ten years, we've been shedding jobs for a very long time.  Relaxing the regulations on the financial markets has caused the economy to implode and relaxing tariffs and taxes on corporations - especially those that have been cutting American jobs - has finally killed the American dream.  And, no, the government can't fix all of it and the people who can - CEOs of corporations - don't want to fix it.  They don't care.  They're too busy laughing all the way to the bank.

Open Letter to President Obama

Dear President Obama;
I've sent comments to you on healthcare, but the box only takes 500 characters and I am much more long winded than that. Also, I haven't received any response. But, I'm not writing this to complain, but to help people take notice.
First and foremost, we shouldn't rush any of this. Theodore Roosevelt wanted national healthcare at the beginning of the last century and we've lived this long without it. Let's take our time. I know there's a feeling of urgency what with the economy trying to climb out of the toliet and the American public supporting you by 65%, but let's not make hasty decisions.
Second, any plan that adds yet another tax onto the backs of the middle class is not a plan worthy of mention. Those of us in the middle class pay enough taxes as it is. Right now, between Federal and State taxes, Social Security and Medicare, 1/3 of my paycheck is gone and I haven't even walked out of the building. Let's find the money some other way. (I'm for stopping farm substidies to large corporations and weekend farmers. The substidies weren't supposed to be paid out for more than five years when they started. It's just ridiculous that people like Sam Donaldson gets farm substidies, but I digress.) I'm pretty sure that at some point in the next few years, our taxes are going to have to go up, but let's not tax one of the few benefits we enjoy.
Now, having said # 2, let me mention #3: Let's give HUGE tax breaks to companies that cover at least 75% of an employee's healthcare and even bigger tax breaks to companies that cover 90%. Let's not make them pay taxes on any money spent on healthcare for employees' dependents. A lot of the uninsured are children and by giving employers the push to do the right thing, we might be able to knock more than half of the uninsured off the list.
Four, and this is big, let's not have national healthcare, but a national standard. And, here's why; we don't want to give companies a break on taxes and then have them use some shoddy fly by night insurance company that doesn't cover the basics. A pound of prevention is worth an ounce of cure, after all. We need wellness visits and mammograms, etc. to be covered. And, the standards set must be followed whether the company is self-insured or not. I spoke with a company representative where I work and she insisted that they didn't have to follow the minimums set by Illinois because they were self-insured. I couldn't find an answer on whether or not she was lying, so let's just get that part out of the way. If you follow at least the minimums, you get the tax break, if not, you don't. He who pays the band gets to pick the music, so companies shouldn't expect breaks, if they don't want to have the minimums.
Finally, whatever healthcare plan we pick or whatever minimums we set; Congress should be set at the same standard. If they had to live with our healthcare, the healthcare system wouldn't be broken.
I hope you see this, President Obama.
God Bless
A Concerned Citizen

Corporate Taxes And Healthcare

Have you read this week's Business Week? On page 20, the Mandel on Economics article is about slashing Corporate taxes from 35% to 25%. That's a pretty big slash and it would mean that Corporations would pay a smaller percent than the highest taxed individual. On top of that, Corporations all ready only account for 10% of the Federal Government's revenue. Slashing their taxes would only bring that figure down AND it wouldn't guarantee that they would create jobs here at home.
In an article just a couple of pages along, Catherine Arnst writes that some CEOs are behind the "new, federally funded insurer" plan "that would expand coverage by competing with private health insurers." For once, I agree with the Republicans that this is a bad idea, but not for the same reasons.
I realize that we have to get the healthcare costs in hand and that premiums have risen faster than anything else, but if we let our corporations pay less in taxes and not have to be responsible for the people they hire, we're not helping anyone. We're moving more costs to the government and less on the backs of the companies who helped incur them.
Why can't we throw out the tax code all together and create a new one that gives companies incentives to create American jobs and cover benefits by paying lower taxes? Why should we just lower the taxes across the board and give them government benefits that allow them to put out even less for their employees? Won't this just tax the American worker that much more?

God Bless