Comments about ‘Letter: Unsustainable economics’

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Published: Tuesday, Jan. 21 2014 12:00 a.m. MST

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marxist
Salt Lake City, UT

"This is not a difficult riddle to solve." I disagree with this statement, even though the writer is mostly right in his analysis. As my handle indicates, I view economics mostly from the perspective of Marx. According to Marx businesses and the owners (capitalists) are driven to maximize profits, it's grow or die. So it's not that capitalists are demented and evil - they aren't for the most part - they're just people. But in their position they feel absolutely driven to maximize profits above all. In large part they do this by minimizing wages as much as possible. That's why so much American production has been shifted to Asia. American capital doesn't worry much about domestic demand for its output because they view the world as one large global market.

Labor for its part has a hard time in the global economy because production can be easily shifted to areas with the lowest wages. Labor is to be continually whip sawed. Of course, as you point out, this setup is not sustainable, but capitalists can't see this in their zeal to minimize wages. This will only be resolved through severe crisis.

Curmudgeon
Salt Lake City, UT

Great letter. In addition, the typical business paradigm includes an assumption that growth is necessary for profitable success. Yet overall economic growth is ultimately unsustainable, whether due to resource depletion, environmental impacts, or crushing debt. "The End of Growth" by Richard Heinberg provides a compelling look at the unsustainability of growth as a driver of our economy.

Mike Richards
South Jordan, Utah

Roger Terry thinks that risk and investment are of no consequence. In other words, if we took him literally, we would have to give renters the deed to our homes because our risk and our investment to purchase homes is of no consequence.

Corporations are owned by those people who use their cash to buy shares in that corporation. Corporations have a board of directors, elected by shareholders who have a financial investment in that corporation. The board of directors are charged with the responsibility to preserve the value of the corporation and to maximize the profits so that the risk taken returns a profit.

Corporations hire people. Those people have not risked their money to buy the corporation. Those people are paid, whether the corporation makes a profit or not. Those people get exactly what they bargained for when they took the job. They, like our "renters" do not own the corporation or the house.

Calling names and disparaging risk will not buy you a business. If you have not invested your money in a business, you have no right to take money from those who have taken that risk.

SEY
Sandy, UT

Roger Terry has the non-secret answer I assume he's going to share on this comment board. He's shared it several times before, so if I remember it correctly, it's basically a pipe-dream. It cannot happen without employing the very heavy hand of government forcing "voluntary" cooperation.

Marxist, of course, sees the problem differently as the exploitation of labor, but he's right when he says the situation can only be resolved after a severe crisis.

Those in control of the economy are not about to relinquish it to someone with a "bright idea." Utopian schemes are fit only for those with too much time on their hands.

Martin Blank
Salt Lake City, UT

As Ed Abbey used to say, "Growth for the sake of growth is the ideology of the cancer cell." Roger's right in that the current system is unsustainable. The question then becomes "How can we change the system to be sustainable?" Does changing the system so that CEOs buying back stock options to artificially inflate the stock price and therefore getting larger and larger bonuses make sense? It's been said that had Walmart not bought back stock and had instead used the same money to increase payroll, the average Walmart wage would have risen by $5 an hour. So what's better, that Walmart's executives made more in bonuses, or that every employee could have made a living wage?

pragmatistferlife
salt lake city, utah

While I agree for the most part with the letter writer and Marxist, there is another facet to labor other than just cost and that is skill.

Labor will only be shifted to lower cost locations that have the skill to perform the work (possibly not equally, but at least good enough).

That is the opportunity America has and President Obama has been talking about at every turn but has been entirely stonewalled by the republicans.

America was the leader in auto production through the 70's simply because no one could build cars as well and as cheap as us...until they could.

The creation of new high tech industries along with the creation of a capable workforce is the answer to our future not just the re-distribution of wealth in old industries. That dog has hunted and will never come back.

Corporations or even small businesses are not going to pay higher wages because they should or could. They will only do it when they have to (demand). So until will create that condition this fight will continue.

Tyler D
Meridian, ID

@marxist

I typically enjoy reading your comments as (like Marx) some of your criticisms of our current system are accurate.

That said, it seems a waste of your talents to immerse yourself in a utopian philosophy that when practiced (at least among humans) has caused so much misery and despair. Regarding Marxism, I’m reminded of the E.O. Wilson quote – “wonderful theory, wrong species.” He does think it would work great for ants & bees though… I tend to agree.

I’ll ask you the same question I have asked conservatives with respect to free market healthcare – name a country or place on the planet where your theory has been practiced with positive results?

Roland Kayser
Cottonwood Heights, UT

President Eisenhower once gave speech in which he said that the genius of American Capitalism was that an average working man could buy a nice house, a nice car, and send his kids to college on his income alone. He said the capitalist countries that were ripe for communist takeover were those in which the wealthy had everything and workers struggled to survive. He also said that the reason for this was that America's business elite understood that it was in their own best interest to pay their workers well.

Our elites have forgotten this important lesson. It is simply not possible to have a stable society in which half the populations can't make a living. Although communist takeover is no longer a threat, our society cannot survive in its current condition. I don't know what it will take to change.

Mountanman
Hayden, ID

If low productivity produced prosperity, there would be no poverty! Productivity produces prosperity and low productivity inevitably produces poverty for individuals and nations. There is no other alternativ! The "secret" to America's past prosperity has been its productivity and the reason individuals and nations are not prosperous is because of low productivity. There is no such thing as wealth redistribution without destroying prosperity! Very difficult concept for liberals and socialists to wrap their minds around but there are no long term exceptions. For examples compare N. Korea with S. Korea, former E. Germany with W. Germany, Hong Kong with mainland China, etc.

Mike Richards
South Jordan, Utah

Demanding that "corporations" pay their workers more is absurd. It is absolutely absurd. How many of those who make those demands leave an extra $20 on the table when they eat at a restaurant? How many pay their barber more than the sign tells them to pay? How many tell the neighbor boy or girl who knocks on their door and offers to cut their grass or shovel their walkway that they will let them do it, but that that work deserves $50 instead of $15?

Telling others how to spend their money is baloney. We are the wealthiest nation on earth, but we are filled with people who hold on to every penny while they demand that others share their wealth. Those who hold on have TVs, cell phones, computers, nice homes, cars and more clothes than they could every wear.

Spend some time on YouTube watching industrial robots build cars, then realize that until workers learn how to design robots, until workers give the same value as a robot, no business will pay them for work that can be easily automated.

2 bits
Cottonwood Heights, UT

Can somebody help clarify the last paragraph for me?

Re: "The current corporate system of wealth distribution is a parasite that thrives by killing its host"...

So... who is the "Parasite", and who is the "Host"? And how are the P's killing the H's??

===

IF it's the relationship I'm assuming (where consumers=host and corporations=parasite)... corporations don't kill off their customers. They rely on customers wanting and buying their products/services to survive. Corporations are very aware of that. How do they "thrive" by killing off their customers?

They also know they need their employees, and want their employees to prosper and be happy working there (if that's the relationship he's trying to describe). No.. they can not thrive by killing their employees.

Employers actually want their employees to succeed and be as happy as possible working there (that's the only way they can deliver their product or service). Without them they are nothing (and they know that).

Corporations want their customers to be as prosperous as possible (because that means they have money to buy their products/services). They want their employees to prosper also.

Grover
Salt Lake City, UT

Fact: 70% of the American economy of TODAY is based on our own consumption. Conservatives and liberals have to accept that as a fact. Wages in real terms are declining in the USA for 90% of the working class due to forces like exporting jobs that can be done more cheaply elsewhere and those that can't are given out to the lowest bidder in a never ending death spiral downward for workers.

Problem: How do we keep the current system running in the future when the numbers are headed inexorably in the wrong direction. Productivity gains have a human limitation. Adding automation only makes unemployment higher. Finally, traditional pension disappear by the day which puts more and more people on the edge of disaster. Despite what one regular contributor says ad nauseam, we are all now "owners" through our 401K and IRAs. We all own stock and share in the risk of companies. As owners we gain when costs are cut, but as workers we are on the other side of the equation. Capitalism has no safeguard to keep the system working for everyone hence we see the looming catastrophe with no real answer as to how to prevent it.

Roland Kayser
Cottonwood Heights, UT

To Mountanman: By all means, let's compare Communist East Germany with Socialist West Germany. No American liberal wants to emulate East Germany, West Germany is another story. It is perhaps the world's most productive capitalist economy combined with a high level of tax financed social services. A very pleasant place to live too, and you can always drive next door to France to get the world's best food and wine.

Open Minded Mormon
Everett, 00

My adult children and I were talking over the weekend.

I mentioned that perhaps - like our ancestors before - that it was time for us to migrate to Canada or New Zealand.

Anti-war,
more Socialist,
cleaner enviroments,
use the metric system,
greater economic freedom,
Universal Healthcare,
and
for the sake of convinience for us, already spoke English.

Those countries were more like the America I USED to know.

Besides -
Since we are all here for the test in motality --
The LDS Curch is still true, even in Australia.

Open Minded Mormon
Everett, 00

Agreed,
Great Letter.

I was quite frankly surprised the DN posted it.
Wouldn't want to risk being labled with the "liberal" media attacking this country...

UtahBlueDevil
Durham, NC

You can't remove the role of government in all of this. The trans-contential railroads were made possible because of vast land grants by the government to Union Pacific and Central Pacific. Boeing got off the ground because of a contract to deliver air-mail. The Department of Defense moved IBM from a maker of business machines, to computers in the late 1930s, The Space Race gave us core technologies like the semiconductor, flat screens, lcd displays, long life batteries, and the list goes on and on. Even major medical break throughs that spun off to some of the biggest pharma companies were through DoD grants. My own company is the result of a Department of Agriculture grant to study agriculture production. We now do 3 billion in sales and employ over 14,000 people world wide.

I know it isn't the nice neat little picture some want, but government has had a heavy hand in promoting American business. If we are to be competitive in the future, that role will still need to be filled.

Open Minded Mormon
Everett, 00

When 1% of the population owns 80% of the wealth,
and continues to expotentionally gravitate upward each and every year,

That 1% simply can't spend enough on "goods and products" to sustain our economy.
And they are too geedy to "trickle down" their good fortunes to those procduing it.

Henry Ford gsvr doulbed his employees pay so they could afford to by the very products they built...
And America grew from it.

Welcome to the new guilded age of the 21st century...
The world of tomorrow looks more like MadMax or the Hunger Games than Star Trek.

What in Tucket?
Provo, UT

Corporations should not make profits? what blarney is that. Only the government running a business can do without profit. They just add more tax payer money. A business that is not profitable is going to fail.

Kent C. DeForrest
Provo, UT

pragmatist:

"Labor will only be shifted to lower cost locations that have the skill to perform the work (possibly not equally, but at least good enough)."

Wellllllll . . . I can't count the number of times I have called technical support at various companies, only to have my call fielded in India or the Philippines or Bangladesh by a "technician" who could neither speak intelligible English nor understand my questions.

Grover:

I disagree with just one thing you said. Yes, more people may own stock through 401k plans or IRAs, but statistics show that ownership is actually concentrating rather than dispersing in society. The already wealthy own an increasing share year by year. So I'm not really an owner in any sense of the word that makes any difference.

2 bits:

"Employers actually want their employees to succeed and be as happy as possible working there (that's the only way they can deliver their product or service)."

You haven't worked in many corporations, have you? Ever been laid off by Novell, for instance, just so the quarterly numbers look better?

Mike Richards
South Jordan, Utah

A lot of good comments are being posted. Some want wages increased, citing Henry Ford. Others, like me, want workers to add value before paying higher wages. Some cite the fact that a very small portion of the population has the most wealth, but no one yet has told us that the very wealthy already pay most of the taxes, which means that you and I are already riding on the coattails of those "rich guys".

Common sense tells us that we would not go to a barber shop and 'hire' someone who didn't know how to cut hair. We value our own money more than that. We could not go to a doctor who only knew how to use the Internet to diagnose our ills. We would not even hire someone to mow our grass unless we knew that that person had the skills and the equipment necessary to do the job; yet, some are telling us that 'corporations' need to pay the unskilled and the unqualified more.

Wealth is generated by selling goods or services. Workers need to learn to add value to goods or services.

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