# US Economy and Permanent Job Losses **URL:** \ **Category:** Great Debates\ **Created:** [March 9, 2004, 10:15pm UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360 "2004-03-09T22:15:45Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [March 13, 2004, 4:13am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/101 "2004-03-13T04:13:51Z")
I agree that training might not be the best solution for all. Understand that I am not neccessarily talking about a 6 month course in network administration. While that may work for some, others might need a complete 4 years back in college. As to government support for opening a business (counseling, business operations training, loans, etc.), I like this idea. The question is though, what business would you start? As I drive around my area in northern CA, I’ve noticed an awful lot of new small resturants, pizza stores, nail salons, $0.99 stores, vitamin stores, package/mail handling stores, produce stores, discount shoes, sports shops and so on. These are all small operations that may keep the owner employed but someone has to wonder exactly how much market share possibilty there is in the above occupations, how many people they could employ and what they might pay their employees? Businesses like these depend on people having free money to availal themselves of the product or service being offered. I don’t see stores like this as any kind of solution to the bigger picture problem. I think one thing that can be done is for the government to bring like-minded and skilled people together and then perhaps give these groups of people first dibs on technology that the government is trying to license (such as [here](http://iridium.nttc.edu/). ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 13, 2004, 4:21am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/102 "2004-03-13T04:21:44Z")
> [@iamme99](#): > > No, we have to protect against the abuse of training, training strictly to be trained. I don’t know how to do that. Well, we might start by not introducing a third party to pay for the education. another option might be to make sure that the training that is available is of the highest quality. See the “data” I mentioned above and below. > [@](#): > > Unemployment generally doesn’t cover much… Well, it is based on your salary and the amount of time you worked. That is the more you make and the longer you made it, the more benifits you get. Also, there are extensions available to certain industries. Perhaps this could be applied more generally. > [@](#): > > And you have to pay both state and federal taxes on this money, which I think is foolish. I hope you will still think it is foolish when people who also recieve income from other sources also want to avoid taxes on any unemployment. > [@](#): > > In the SF Bay Area… For a start, we have to give up on the idea that displacements will be totally painless. If your jobs disapear, you should not be able to require the rest of us to “keep you in the manner to which you have become accustom” as it were. > [@](#): > > Take people who have millions/billions invested in various funds, real estate, whatever. They get a windfall tax cut, giving them even more dollars. What do you think they do with that extra money? They will put it into those or other investments. That’s exactly what I said. Now if Mr. Cuomo contends that these individuals will not themselves create new jobs, then I can probably agree with that. The individuals who create jobs are a minority. That means that a tax cut for any group will not result in a business created by each of the individuals who get a tax refund. However, if he contends that the money will not go toward the creation of new business, then he is silly. What do you think those investments do? I can buy that some will not directly create new jobs, but not in general. > [@](#): > > So the new money just gets put into a hedge fund or something. And what exactly do you think a hedge fund is? Are they not simply a type of strategy for _investing_ in the stock market? That is businesses? > [@](#): > > The problem is well-defined already and has been for many years. Cool then we should have no trouble. > [@](#): > > Trained and experienced people are being pushed out of jobs and careers do to technological change and outsourcing. Uh oh, we may have a problem. I’m not sure I understand that this has been happening in a way that needs addressing. At least not the way you seem to be implying. > [@](#): > > Many are unable to find equal employment for a wide variety of reasons. Wouldn’t the unemployment numbers have shown a steady increase over the last several decades if this were true? Or maybe is there something else going on? > [@](#): > > I agree, but we will not have any success in trying to tell other countries what they should do. I disagree. Many of the treaties signed in the last decades involved more than just the USA. And most of them provided some benifit to the US. There are pressures we can bring to bear, there are arguments to be made, and finally, there are retaliations available to us. We have a lot of influence. > [@](#): > > They will do what they feel is in the best interests of their own economy, so we have to assume that they will not do anything that benefits the USA only. Of course. We do not want anyone to do anything which benifits the USA only. That does not amount to trade. Trade is mutually benificial or it is fraud or theft. > [@](#): > > we must address the problem of lost jobs created by freetrade. Well, of course. But first we have to understand the size of such a problem. If unemployment is still only 5-6 percent, how big of a problem can it be? > [@](#): > > Outsourcing has been accelerating since the 1970"s. We have done precious little to anticipate the problems that are caused which is why we find ourselves in this mess now. Again, I ask, if this were true in the sense you seem to mean, wouldn’t our unemployment be much higher? Or at least wouldn’t it have shown steady growth over these last decades? > [@](#): > > And what would that do? What do you do for someone who is past 40, has been working in their career for 20+ years, has a kid or two in college and has been displaced? What else? You help him find a new job or retrain him to do another job. What else is there? > [@](#): > > Provide them with some data on what they should have done? No, how did you get that. I’m not talking about a program to shout neener at unemployed people. That’s ridiculous. > [@](#): > > Or use the data to tell them what they should do now? Now you’ve got it. If people have good information as to the options available to them, they can make informed choices about what to do. > [@](#): > > Neither is of much help when you have the stress of providing for your family as your primary focus. Well, I’m not so sure. Isn’t one of the biggest problems the dispare generated by the “What do I do now…” type of question? Solid information answering that question would go a long way to providing the unemployed with hope. > [@](#): > > People have already paid for their education and training through college. Right. What I am suggesting is that we give up on the notion that once through school is all that anyone will ever need. We need to adopt a culture of continued learning. > [@](#): > > The average person in CA pays approximately 40-50% of their income in taxes right now (23-33% Federal, 10% State, 7% FICA). Why should they pay more? Uhm… Because we are demanding more services? What other reason could there be? > [@](#): > > If the corporation is doing the displacement for their own enhancement, why shouldn’t they pay for this program? But they are. I suggested a payroll tax. That comes out of both pockets to some extent. And obviously extra taxes on corporations will not lead to more corporations doing business over seas will it? > [@](#): > > The bottom line remains that out-of-work don’t pay taxes or consume much. Marginally employed people pay little or no taxes and also don’t consume much. […]I say someone’s going to pay the cost of maintaining the government and the services we have grown used to. If it isn’t the wealthy and the corporations, then it’s going to be the middle-American’s with jobs. And if it is the wealthy they will take their wealth somewhere else. I am not suggesting that we lower the taxes on rich people and raise them on others. I am only suggesting that a balanced approach is best. Also, I am not suggesting that higher taxes are a good idea in any event. I’m simply trying to propose options to the “Tax the rich and pay the poor” sort of proposals which seem to accompany this kind of discussion. Personally, I think a better understanding of economics would do the most good. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [March 13, 2004, 4:25am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/103 "2004-03-13T04:25:48Z")
So I read that post twice, **js\_africanus** , and from what I can figure out you’re saying that 1 - free trade is giving an economic benefit right now but 2 - that economic benefit may not be distributed in a way that fairly compensates those who are affected, which is the political part of this question. Is that right? ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 13, 2004, 4:26am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/104 "2004-03-13T04:26:25Z")
> [@js\_africanus](#): > > any efficient outcome can obtain if we redistribute wealth and let the competitive market run unfettered. What does it mean to redistribute wealth and leave the market unfettered? I’m not sure I understand. If a third party invaded your island and began taking rats from you and distributing them to me, how would that not effect the market? ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [March 13, 2004, 5:45am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/105 "2004-03-13T05:45:27Z")
[QUOTE=iamme99] Unemployment generally doesn’t cover much… > [@Pervert](#): > > Well, it is based on your salary and the amount of time you worked. That is the more you make and the longer you made it, the more benefits you get. Also, there are extensions available to certain industries. Perhaps this could be applied more generally. But only up to a point. The benefits only increase to a generally low maximum amount. As I stated, that generally isn’t enough to cover most people’s living expenses. A well-employed tech person might be making $5000-8000 monthly. Taking them down to $1500 monthly doesn’t seem like people would be living in the style they were accustomed to! And taking taxes out of unemployment only worsens the problem for the person and their family. In the case of unemployed people, I think an exception to taking this particular source of income makes good economic sense. [QUOTE=iamme99] Take people who have millions/billions invested in various funds, real estate, whatever. They get a windfall tax cut, giving them even more dollars. What do you think they do with that extra money? > [@Pervert](#): > > They will put it into those or other investments. That’s exactly what I said. Now if Mr. Cuomo contends that these individuals will not themselves create new jobs, then I can probably agree with that. The individuals who create jobs are a minority. That means that a tax cut for any group will not result in a business created by each of the individuals who get a tax refund. However, if he contends that the money will not go toward the creation of new business, then he is silly. What do you think those investments do? I can buy that some will not directly create new jobs, but not in general. > > And what exactly do you think a hedge fund is? Are they not simply a type of strategy for investing in the stock market? That is businesses? If you have 5 million in a fund and you add 2 million more to that fund, that doesn’t generate anything more economically. It doesn’t take extra people (new hires) to manage the extra money in the fund. But wasn’t that the administrations rational for the tax cut? That it would generate new jobs? Since that isn’t working, I propose removing the tax cut FROM THE WEALTHY ONLY. [QUOTE=iamme99] Many are unable to find equal employment for a wide variety of reasons. > [@Pervert](#): > > Wouldn’t the unemployment numbers have shown a steady increase over the last several decades if this were true? Or maybe is there something else going on? Yes, there is something else going on. The government is screwing with the unemployment numbers!. Large numbers of people are deemed too dissatisfied, too depressed, too fatalistic, too whatever and are no longer considered actively looking for work. These people are then summarily removed from the unemployment count. I have seen statements that the real unemployment rate in the USA, were everyone who would like to work counted, **would be about 10-11%**. I posted the below on unemployment on another thread. Here’s a good link on unemployment: [Link](http://www.gold-eagle.com/editorials_04/mauldin020904.html) > [@](#): > > Businessweek > Behind That Jobless Rate > > It’s down – as the young stop looking for work > > Unemployment, at 5.6% in January, has fallen from 6.3% in June, 2003. But that’s not because of robust job growth. Instead, many younger Americans have dropped out of the labor force. > > Since March, 2001, a total of 408,000 Americans aged 16-24 have left the workforce – meaning they are neither employed nor actively trying to find a job. The labor-force participation rate – the share of those 16-to-24-year-olds with a job or looking for work – hit a 32-year low of 60.5% in December, accounting for the entire fall in the overall participation rate (chart). > > It appears that many headed back to school. The latest data, through 2002, from the U.S. Census Bureau show that the share of 18-to-24-year-olds in college declined from 1998 to 2000 but resumed an upward trend after the recession began. > > What if the drop-off hadn’t occurred? If young people’s participation rate were equal to its level in March, 2001, the unemployment rate could be 6.6%. [QUOTE=iamme99] And what would that do? What do you do for someone who is past 40, has been working in their career for 20+ years, has a kid or two in college and has been displaced? > [@Pervert](#): > > What else? You help him find a new job or retrain him to do another job. What else is there? Great! So let’s get going. I’ve been in the IS technical arena for quite some time. But I don’t have a good feeling that this is a safe course for the future. Maybe a law degree would be a good adjunct. I’ll need living expense support through the new education curriculum (2 years). I’ll split the cost of education for this career change 50/50 with the government and my 50% will be at 0% interest. You OK with that? [QUOTE=iamme99] People have already paid for their education and training through college. > [@Pervert](#): > > Right. What I am suggesting is that we give up on the notion that once through school is all that anyone will ever need. We need to adopt a culture of continued learning. But that isn’t working. If you read the stories of people who have been displaced or are currently job hunting, many HAVE taken extra education courses, often on their own. It doesn’t matter BECAUSE the company can get the same skills at a lower cost somewhere else in the world. That is why taxes have to be applied to the companies to equalize the playing field. > [@Pervert](#): > > And obviously extra taxes on corporations will not lead to more corporations doing business over seas will it? Not if you make it economically expensive to do so through additional taxes. If corporations want to reside here and sell here, then they need to get religion real fast. They need to recognize that our economic contract can’t continue to work if their only focus is profits at any cost. [QUOTE=iamme99] The bottom line remains that out-of-work don’t pay taxes or consume much. Marginally employed people pay little or no taxes and also don’t consume much. […]I say someone’s going to pay the cost of maintaining the government and the services we have grown used to. If it isn’t the wealthy and the corporations, then it’s going to be the middle-American’s with jobs. > [@Pervert](#): > > And if it is the wealthy they will take their wealth somewhere else. > > I am not suggesting that we lower the taxes on rich people and raise them on others. I am only suggesting that a balanced approach is best. > > Also, I am not suggesting that higher taxes are a good idea in any event. I’m simply trying to propose options to the “Tax the rich and pay the poor” sort of proposals which seem to accompany this kind of discussion. Personally, I think a better understanding of economics would do the most good. And that is what I am trying to do also - find a balance. IMO, the old rules and guidelines are not working and we fall deeper into a black hole if we continue on the same path. Middle America doesn’t have the means to pay more taxes. So corporations and the wealthy simply have to pay their fair share. Corporations have to accept their part and place in our society and realize that they have a certain social responsibility. And yes, it will cost them. Perhaps they will have to take some money from their overpaid executive compensation packages. Makes me so sad, sniff. 😃 ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [March 13, 2004, 6:05am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/106 "2004-03-13T06:05:23Z")
**js\_africanus:** I agree with everything you said. I was just trying to simplify the problem by just considering the one side and treating the other as a black box. The other country is simply a big factory - you feed materials into one end, and goods come out the other. Losing your job to Autocad is no different than losing it to a foreigner. Both are economic units that reduce the cost of producing things, and therefore displace the old means of production. This is almost by definition an improvement in efficiency. From this perspective, even if the other country subsidizes its workers or puts tariffs on your product, it just lowers the efficiency of your big factory. As long as it remains more efficient than domestic production, it’s still to your benefit to use it. **iamme99** said: > [@](#): > > There are relatively few draftsman who lost their jobs to Autocad and like programs. Because of their lower numbers, there was time and opportunity for them to retrain and transition into other technical jobs at equal or better pay level. I don’t agree. Estimates for outsourced tech jobs range around 425,000. A LOT of draftsmen lost their jobs. And many of those kinds of jobs were lost very quickly. The rise of the laser printer decimated small print houses in the space of five years. In contrast, outsourcing happens gradually - it’s been happening for decades, and the U.S. IT industry is still the biggest in the world. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [March 13, 2004, 6:11am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/107 "2004-03-13T06:11:18Z")
**js\_a:** \* […] if the market—because of real-world imperfections, bad luck, etc.—ends up distributing welfare in a manner that is morally or ethically objectionable, the way to solve the problem is to redistribute the wealth and then let the market do its thing. You will be getting the maximum amount of well-being possible with a distribution that is morally justified. \* Fine by me. I’ve been saying all along that while I don’t support outright protectionist measures or economic isolationism (except perhaps in limited and targeted ways to compensate for protectionism in other economies), I think there’s an important role for government intervention to moderate the excesses of unfettered capitalism’s boom-and-bust, winners-and-losers cycles. I’ve never been arguing “scrap the market”, rather “moderate the extreme social impacts of the market”. You and I have AFAICT nothing to argue about here. However, what **Sam** and now **pervert** have been claiming is that even these governmental measures of “redistributing the wealth” constitute a dangerous interference with the workings of the market. You are now arguing with them, not me. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 13, 2004, 6:14am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/108 "2004-03-13T06:14:54Z")
> [@iamme99](#): > > It doesn’t take extra people (new hires) to manage the extra money in the fund. But wasn’t that the administrations rational for the tax cut? No. Not the way I understand it. The rational had much more to do with the way money is invested. It is invested in businesses. Either to grow existing ones or to create new ones. Even hedge fundes participate in this to some degree. > [@](#): > > Yes, there is something else going on. The government is screwing with the unemployment numbers!. I was afraid something like this was behind your comments. Ok, let’s follow it. If over the last several decades, people have been falling off of the the employment and then off even the unemployed roles, where did they go? Wouldn’t we have significant numbers of starving indigents in the streets by now? > [@](#): > > Large numbers of people are deemed too dissatisfied, too depressed, too fatalistic, too whatever and are no longer considered actively looking for work. Well, no, if you look at the BLS site linked to in the article [And here for compleness](http://www.bls.gov/lau/laufaq.htm#Q3) you’ll see “_Unemployed persons. All persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4 week-period ending with the reference week._” It says little about why they did not look for work in the last four weeks. And your cite makes the assumption that if they had not dropped out of the civilian labor force, the would still be unemployed. Perhaps they found another occupation. Your cite suggests they may have gone to school. > [@](#): > > You OK with that? No, not particularly. Why should I pay 50% of such a thing? Has your job been outsourced by me? > [@](#): > > That is why taxes have to be applied to the companies to equalize the playing field. Except I think it will equalize in a way you don’t intend. > [@](#): > > If corporations want to reside here and sell here, then they need to get religion real fast. They need to recognize that our economic contract can’t continue to work if their only focus is profits at any cost. And imposing vast new taxes on business will not be a very big incentive for them to stay here. hy do you think that new taxes on businesses will not accelerate the problem you are trying to address? > [@](#): > > And that is what I am trying to do also - find a balance. No, you are trying to find a new excuse to “stick it to the rich”. > [@](#): > > Middle America doesn’t have the means to pay more taxes. So corporations and the wealthy simply have to pay their fair share. Which of course means that coprorations need to pay more and the rest of us should not. This is your idea of balance. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 13, 2004, 6:21am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/109 "2004-03-13T06:21:27Z")
> [@Kimstu](#): > > However, what **Sam** and now **pervert** have been claiming is that even these governmental measures of “redistributing the wealth” constitute a dangerous interference with the workings of the market. You are now arguing with them, not me. Well, to be fair none of you ever give a good estimate for the level of market interference that would result from this redistribution you want. If you want to impose a .01% new tax that is one thing. If you want to impose a 40% new tax that is another all together. I think it is unfair to say “even these governmental measures” implying that I am unsympathetic or unconcerned (or more probably) a libertarian/anarchist nut. If you wish to suggest how much wealth needs to be transfered and provide proof that it would not impact the economy in any large way, we can debate that. Otherwise, I am assuming that you mean to institute a system whereby the government can arbitrarily take any amount of wealth it deems necessary to support as many people it deems necessary in whatever lifestyle it deems necessary for as long as it deems necessary. Which system, BTW, I do not consider a small interference in the market. Perhaps you can alter my perceptions of your proposals. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [March 13, 2004, 6:23am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/110 "2004-03-13T06:23:47Z")
**Kimtsu** said: > [@](#): > > However, what Sam and now pervert have been claiming is that even these governmental measures of “redistributing the wealth” constitute a dangerous interference with the workings of the market. I didn’t say it was dangerous. I said it was less efficient. It will hurt economic growth. It will cause other job losses in the country as a cost of that drop in efficiency. Whether that is a bad thing depends on what your ideals are. If you want to give up some growth and economic efficiency in exchange for more social justice, that’s fine. But at least discuss the issue from that basis, and be aware of the costs involved. Don’t fool yourself into thinking that you can just tweak the system and prevent those jobs from being outsourced without paying a pretty hefty price for the privilege. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [March 13, 2004, 6:35am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/111 "2004-03-13T06:35:23Z")
**pervert:** _Otherwise, I am assuming that you mean to institute a system whereby the government can arbitrarily take any amount of wealth it deems necessary to support as many people it deems necessary in whatever lifestyle it deems necessary for as long as it deems necessary._ This, of course, is the system we’ve currently got. There are no constitutional limits on the rates at which wealth or income may be taxed, nor on the amount of taxes that may be spent on social benefits, nor on the nature and extent of social benefits that the government may provide, nor on the number of people that may benefit from them. So the job for us as a society is to agree where in this arbitrary system of potentially unlimited wealth redistribution we want the lines to be drawn. I agree that this is not an easy job. **SS:** _Don’t fool yourself into thinking that you can just tweak the system and prevent those jobs from being outsourced without paying a pretty hefty price for the privilege._ Again, I don’t think I’m the person you mean to be addressing with this point; you are talking past what I’m talking about. I have said repeatedly that I don’t think outsourcing is the primary problem in our jobs situation and that I don’t think protectionist measures are the best way to deal with it. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [March 13, 2004, 6:59am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/112 "2004-03-13T06:59:16Z")
Sorry, I just veered off there a second into a more general point. Didn’t mean to associate you with that viewpoint. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [March 13, 2004, 7:03am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/113 "2004-03-13T07:03:03Z")
No need to be so reasonable about it. 🙂 ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [March 13, 2004, 11:11am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/114 "2004-03-13T11:11:28Z")
Let me break some of this out so we can focus on one issue at a time. Originally Posted by iamme99 It doesn’t take extra people (new hires) to manage the extra money in the fund. But wasn’t that the administrations rational for the tax cut? > [@pervert](#): > > No. Not the way I understand it. The rational had much more to do with the way money is invested. It is invested in businesses. Either to grow existing ones or to create new ones. Even hedge fundes participate in this to some degree. Can you provide any cites that show that this money IS being deployed into business creation? Cuomo says it isn’t happening. Here’s an excerpt from the Matthews/Cuomo transcript link that I pointed to earlier. Cuomo is much better positioned than you or I to know what is going on with wealthy people, like himself. When he says they had all the money they needed to invest with, before the tax cut, I would tend to believe him. The money gained by the tax cut, for this class of people, was NOT required to help anyone in this class further invest in either new or existing companies. It just added some more zeros to their net worth. So it would make little or no difference if it was taken away and better applied somewhere else. > [@](#): > > MATTHEWS: But isn‘t that a technical point, since we still have a lot of unemployment. > > CUOMO: Well, let‘s get this clear about the technicalities and the realities. > > Right now the papers are filled with economy is recovering, economy is strong. Growth is good. > > Growth in China, eight percent. And people starving to death. There‘s a big difference between a technically good economy, which is production, distribution and consumption of goods, and whether your people are doing well. > > What you should say is the economy is good by all the economic standards. However, 140 million workers are in deep doo-doo; 15 million of them are either out of work, working part time, or quit on looking for work. > > Their wages go up a point a year, if they go up at all, the ones who are working. The cost of welfare—health care goes up 12 percent. Housing goes up. They‘re sliding down; 35 million people are going nowhere. Eleven million of them are children, and that‘s with a good economy, so-called. > > Sure it‘s a good economy. You have people working for you at half the price or 1/10 the price overseas. And so you‘re making money. This is a good economy, and this isn‘t politics. This is the objective truth. > > This is a good economy if you‘re a big corporation, if you have a lot of shares in a good corporation. > > For them, they‘re doing well. Why? They put people to work overseas, it‘s cheaper. You know, they get rid of the health care costs, which is a big problem. > > So you know, when we read news that says the economy is terrific, ask yourself. Terrific for whom? You have 140 million workers. It‘s not good for them. > > Listen, one out of five of our workers are high skilled. One out of five of our workers, Chris, are high skilled. Why? Undereducated. That‘s one of our big problems. > > MATTHEWS: But you know, Governor, that the great strength of the Republican Party politically and the reason they control the House and the Senate federally, nationally, is because they promised lower taxes. That‘s always been a big New York issue. > > But as long as the Republicans say we‘re going to give you lower taxes, isn‘t that the best sales pitch you can offer? > > CUOMO: You know, the president—with all due respect—is very blunt. You know, you need tools to build a great America. His tool is the wedge. That‘s the simplest tool known to mankind. > > He says, “I‘m going to reduce everybody‘s taxes, and that‘s going to make the economy strong.” Nonsense. > > He reduces $3 trillion in taxes by one count, or $3 trillion total. > > Forty percent of that—say $1 trillion, goes to the top two percent. That‘s me and my clients at Wilkie Farr & Gallagher. That‘s less than two million people. > > Now, what did that $1 trillion do for you? Get invested in the economy? Of course not. We have plenty of investment money. Did it get spent so that your consumption went up, the economy seven percent? No. > > If you wanted to help the economy, give all the tax cuts to the middle class. Give it to the 140 million people who would spend it, because they have to. Give it to the poor people. > > MATTHEWS: But that‘s not the Republican philosophy, because the Republicans believe in investment, not consumption. They believe the best thing to do is create an investor class, which will support and finance the industry. > > CUOMO: Chris, the economy is 70 percent consumption. We have investor money. We‘re not short investor money. We‘re short consumers spending money in this market. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [March 13, 2004, 11:38am UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/115 "2004-03-13T11:38:29Z")
> [@Pervert](#): > > I was afraid something like this was behind your comments. Ok, let’s follow it. If over the last several decades, people have been falling off of the the employment and then off even the unemployed roles, where did they go? Wouldn’t we have significant numbers of starving indigents in the streets by now? > > Well, no, if you look at the BLS site linked to in the article [And here for compleness](http://www.bls.gov/lau/laufaq.htm#Q3) you’ll see “_Unemployed persons. All persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4 week-period ending with the reference week._” It says little about why they did not look for work in the last four weeks. And your cite makes the assumption that if they had not dropped out of the civilian labor force, the would still be unemployed. Perhaps they found another occupation. Your cite suggests they may have gone to school. I don’t know what to say. It you truly read this link I provided before [(Unemployment link)](http://www.gold-eagle.com/editorials_04/mauldin020904.html) then it should be clear as to what is going on. Perhaps extracting a couple of examples will help: If you are removed from the unemployment count, then the number of unemployed “officially” goes down. All administrations like the number of unemployed to be low. If you are young, you may have moved back in with mommy and daddy and don’t have to look for work. Or you may have decided to go back to school because you had looked for work for the last year or whatever and hadn’t found anything. Doesn’t mean that you wouldn’t like to be working if you could get a job. > [@](#): > > There are now 1.5 million more people who are not considered to be part of the workforce than there were last year at this time. Part of this is due to population increase, but much of it is what the survey calls discouraged workers. If you are discouraged and not looking for a job, you are not considered unemployed. Only those actively looking for jobs are considered unemployed. If you are over 16 and work for even 1 hour in a week, you are counted as fully employed. Again, this helps reduce the unemployed number. > [@](#): > > First, anyone over 16 who works is counted. Your teenage kids working in the summer are counted, which is why the actual numbers shoot up in the summer… Unless you have some other relevant cites that contradict this information, I don’t see any profit in pursuing this pint further. Facts are facts. Unemployment numbers do not accurately represent everyone who is unemployed or not fully employed. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [March 13, 2004, 12:06pm UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/116 "2004-03-13T12:06:05Z")
> [@Pervert](#): > > Quote: > You OK with that? > > No, not particularly. Why should I pay 50% of such a thing? Has your job been outsourced by me? > > Quote: > That is why taxes have to be applied to the companies to equalize the playing field. > > Except I think it will equalize in a way you don’t intend. > > Quote: > If corporations want to reside here and sell here, then they need to get religion real fast. They need to recognize that our economic contract can’t continue to work if their only focus is profits at any cost. > > And imposing vast new taxes on business will not be a very big incentive for them to stay here. hy do you think that new taxes on businesses will not accelerate the problem you are trying to address? > > Quote: > And that is what I am trying to do also - find a balance. > > No, you are trying to find a new excuse to “stick it to the rich”. > > Quote: > Middle America doesn’t have the means to pay more taxes. So corporations and the wealthy simply have to pay their fair share. > > Which of course means that coprorations need to pay more and the rest of us should not. This is your idea of balance. I’m not trying to turn this into class warfare. There are a lot of people out of work, who have lost their careers solely because corporations are searching for the lowest cost provider. There will be many more suffering this fate in the near future if outsourcing continues on at its present rate. Out-of-work or marginally employed people pay no or less taxes, which hurts the government and ultimately, everyone else. All out-of-work people need retraining opportunities and support during the retraining. But WHO is going to pay for this support and training? Currently, the government only provides for retraining of manufacturing people who have been outsourced. If you work in IT, medical technology, a call-center, essentially anything considered white-collar and you lose your job to outsourcing, you get no help from the government. Warren Buffet recently said that corporations do not pay enough tax. Cuomo and others say the wealthy already have enough money. It should be clear by now that the tax cuts already passed HAVE NOT generated the new jobs that were supposed to come from these massive tax cuts. So if corporations pay more taxes and the tax cut that was allocated to the wealthy is rescinded, then the monies gained can be used to support retraining and/or business start-up loans to the white-collar unemployed. If this doesn’t happen, then we will have more and more unemployed, less revenue for the government, higher state taxes and higher deficits. If you have better solutions, then please post what they are. OTOH, if you believe everything is hunky-dory and we don’t have any problems that need dealing with right now, then say so and let’s move on. We can both nitpick at each others sentences forever but it won’t help solve any of the problems. ---
**Author:** ![Aeschines](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aeschines/32/16251_2.png) [@Aeschines](https://boards.straightdope.com/u/Aeschines)\ **Post date:** [March 13, 2004, 12:54pm UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/117 "2004-03-13T12:54:05Z")
Mr. Stone asks what’s the difference between draftsmen getting booted by Autocad and other workers getting booted by outsourcing. There is one big difference at least. Autocad gave you just as good a product, if not better, for less time and money. It gave producers an _absolute_ advantage over retaining the workers and doing the old way. The same thing for telephone switch board operators. Chinese and Indians taking American jobs don’t give such an advantage; in fact, the quality will probably go down in the short term, nor will they provide the product faster. Still, these disadvantages are worth it to the producer because these people work for cheap. So it is with any product: some people will buy Coke for 99c a 2 L bottle, and some people will buy Dipsy Cola for 49c a 2 L bottle. There is always a market for done worse-done cheaper. Another difference between the situation of the draftsmen and today’s displaced workers is environmental. Yes, there have been some pretty shacky job markets since WWII (I’ve even enjoyed a few myself!), but there has been this sense since the bubble that nothing new was coming, and nothing good could happen. IT guy? Go to hell. Newly minted MBA? F\*ck you. Fluent in Japanese–go back to Japan (I did). 15 years of industry experience? How’s 30k sound? The nostrums have been spilled in advance–retraining, go back to school, blah cough blah. Been there, done that, and there is still f\*ck all out there in the market for us. Add to that the hypercompetition of the era, in which you have to have a BA in order to barista at Starbuck’s, and you have one hell of a frustrated populace. Outsourcing is just a match on tinder, that’s all. What can the government do? Not much. I don’t know if it really should, either. Indians and Chinese are no less deserving of these jobs than anyone else. Sometimes when you’re f_ct you’re f_ct and that’s that. No new industry is coming along. Nothing. Biotech? That’s not labor intensive, and it’s really just a new thing for the drug industry (oddly, quite depressed with everything else right now, at least as far as jobs are concerned) to chew on. So what am I advocating here? Just plain talk about the situation, sans rose-tinted glasses. The US is in a horrible economic mess right now; it really is. The stock market is horrendously overvalued (again!), the currency is way over-valued, and we have a housing bubble. Oh yes, and mind-boggling personal debt. NO JOBS. Let’s, for now, call a f_ct situation a f_ct situation. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [March 13, 2004, 3:16pm UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/118 "2004-03-13T15:16:42Z")
Boy, I’ve been called “The Voice of Doom” in real life, but I am officially handing the mike over to **Aeschines**. As your in Japan, I’d like to suggest some good sake to wash that POV down with. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [March 13, 2004, 4:03pm UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/119 "2004-03-13T16:03:19Z")
> [@Aeschines](#): > > No new industry is coming along. Nothing. Biotech? That’s not labor intensive, and it’s really just a new thing for the drug industry (oddly, quite depressed with everything else right now, at least as far as jobs are concerned) to chew on. After all, its been 3 whole years since the IT bubble burst. No new great technology has come about in that vast amount of time. Nothing new will ever come along I’m sure. I see it now. My rose colored glasses have turned to grey and I bow to your ability to see into the future… -XT ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [March 13, 2004, 4:11pm UTC](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360/120 "2004-03-13T16:11:33Z")
> [@pervert](#): > > And imposing vast new taxes on business will not be a very big incentive for them to stay here. hy do you think that new taxes on businesses will not accelerate the problem you are trying to address? > > No, you are trying to find a new excuse to “stick it to the rich”. > > Which of course means that coprorations need to pay more and the rest of us should not. This is your idea of balance. Would it be your position, pervert, that corporations are now paying their fair share of taxes? Because they aren’t. They’ve used legal loopholes to avoid existing taxes to such an extent that many pay no federal taxes at all. We should, of course, shut down these loopholes, but that would involve an honest Congress, and I have my doubts about that prospect. [Previous page](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360.md?page=5) [Next page](https://boards.straightdope.com/t/us-economy-and-permanent-job-losses/233360.md?page=7)