Profit’s a good thing, right? Very American. We all want profit.
So maybe we should be looking deeply into Exxon, Chevron, United Health Care, Cigna, Koch Industries – all the big companies that have made record profits while paying HUGE executive salaries, even during a staggering economic downturn. We should be learning from them. What, exactly, do they do differently from General Motors and Washington Mutual Bank, or, even, our little company? How can the rest of us do the same?
SHOULD the rest of us do the same? Is what those companies do legal? Constructive to the overall economy? Is the pie big enough for all of us to get a fair chance at a piece of it by doing what they do, even on a smaller scale? If the answer to any of these last three questions is “no”, then it only makes sense that those profits were not fairly come by, and the practices that achieved those excessive profits should be stopped, by regulation that is designed to result in a stable and just economy. And profits for all who work hard and honestly.
We’re not economists, but that seems like a basic ethic America can get behind. There must be SOME economists out there with ideas that will rescue us. Then all we need is a Congress willing to put their mouths and votes where the money isn’t.
Just sayin’...
Credit, they say, is hard to come by for small business these days. We heard some conservative pundit say today that we need to cut the capital gains tax to encourage investment. Problem is, the typical investment that results in “capital gains” goes to corporations that are on the stock exchange, not the small businesses (fewer than 500 employees) that account for something like 50% of the jobs in America.
Let’s differentiate between venture capital to small (REALLY SMALL) businesses and buying stock in General Electric or Exxon. Put your money in a struggling 10 person business with a plan to create something, some product they can sell (not just a service company) to people who really need it, and you shouldn’t get taxed on the gains as much as if you buy 10,000 units of Bank of America. If all you do is transfer your electronic money from one spreadsheet to another, and you make big money, you should get taxed big too.
And if you invest in a company that employs half the people in some small town in, oh, let’s say, Kansas, and your investment keeps that town alive, plus earns you a gain on those dollars, you should get a super tax break, and a medal.
Just sayin’…
And speaking of jobs, I’m sure the folks in Rio will be glad to get the jobs that will come with the 2016 Olympics. Chicago – and America at large – could have used this injection too. So how did our pal Rush Limbaugh react to the disappointment? Watch this video – even Fox News found he responded “less diplomatically”:
He went on to say it was the worst day of Obama’s presidency. What a class act this guy is. But he’s not the only Republican to sense some kind of political victory at Chicago’s loss:
The clip shows conservatives at a seminar for Americans for Prosperity, cheering at the news. American’s for Prosperity – the fake “grassroots” Tea Party group funded by … oh, yeah, Koch Industries – one of the companies we mentioned in the first paragraph.
We’ll echo Dylan Ratigan of MSNBC – these people oppose health care reform just to defeat Obama and “they don’t care if half the country dies!” So there should be no surprise when they cheer the failure of Chicago to get the Olympics because they see it as a loss for President Obama.
Apparently there’s no price too high to pay for the defeat of your political foe – even if it puts another nail in our economic coffin.
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The way our tax system has been set up is completely unfair and confusing. Due to the current tax system, there is no insentive to take on the headaches that come along with being a small business owner. The big businesses and corporations have many accountants working to pay the least amount of tax possible. This is something that most small businesses do not have the resources to acquire. Corporations also have special tax shelters and regulations governing them that small businesses do not fall under. I would have to consult some of my old college books to explain completely.
ReplyDeleteI believe, like several Libertarians, that the country needs to develop a fair straight consumption tax. That way there would be no loop holes in the tax system for crafty accountants to get people and businesses out of paying their fair share. There would be no more special tax credits or posting losses to get tax reduced. Everybody would have to pay a tax on the product or service that they consume. The country would bring in much more money into their coffers at the end of the day than the current system.
The only difference between the wealthy and middle and lower class income families is that the wealthy can afford accountants and lawyers who know the tax code loop holes, and they understand how to get out of paying taxes. With a straight consumption tax, they would still have to pay the tax on the items they purchase. No more capital gains, death taxes, and other goofy taxes.
As far as GM goes, they made some mistakes in the way that they do business. They also had to contend with the UAW. Unions had their use in the past, but today the government regulates all of the past injustices that were imposed on workers. The union is just another big money making machine that really doesn't have the best interest of their members in mind. It was ridiculous that when GM went to the government to for help, that the union was asked to make concessions as well as GM, and they refused. How is that for having the employees back, jobs were in jeopardy, GM was in dire straits, but the union would not make any concessions along with GM? We could probably discuss this all day. There is no way that the material cost for an automobile costs as much as the sticker prices on these automobiles.
DG, I must beg to differ with the last part of your observation. Autoworkers union made great concessions in trying to keep GM alive last year. Don't know where you got your information on that one. When auto execs made their second try for bailout money from congress in December, UAW president, Ron Gettelfinger, said the union would suspend its jobs bank, which requires carmakers to keep paying laid-off employees, and would consider changes to its labor contracts. The union has also agreed, Gettelfinger said, to delay the payments that the automakers must make to a new retiree health care fund called a Voluntary Employee Beneficiary Association, or VEBA. (this from the New York Times).
ReplyDeleteChrysler workers, according to the Wall Street Journal, offered similar concessions, notably in lower wages for new hires, cuts in pensions and benefits, and agreeing to stake their future benefits and pensions on a union-ownership share of the company - a company with very dim hopes of staying alive.
A sad example of union willingness to make big concessions came from a local UAW branch in wisconsin. In a bid to keep their local plant in operation and save jobs, the LOCAL UAW pledged $214 million, $50 million more than the state, county, and city governments combined, but it wasn't enough - Michigan made a higher bid.
These concessions weren't the first, either. They've been coming for many years, as the union saw the automakers floundering, underfunding the contractual pensions and health care, and grossly mismanaging their business.
Unions aren't perfect. They can get greedy. They sometimes overreach. But you can't pin the Detroit Disaster on unions.