[Vision2020] [Spam] Re: I thought you might be interested in this article

[lfalen]

Andreas

Idaho's self made billionaire, (Jack Simplot) started with nothing and only an 8th grade education.

I do not understand the continued reference to Wal-mart as being low pay and not paying health benefits. According to Stephen Peterson ( an Economist at the University of Idaho) Wal-mart pays an average of $10.58 per hour, which is higher than the local average supermarket.  I t has been said on Vision 2020 that Wal-mart does not pay health benefits. According to Peterson 75% of their employees are covered by health benefits, the other 25% are covered by their spouses plan.

Roger

-----Original message-----
From: "Andreas Schou" ophite at gmail.com
Date: Wed, 30 Aug 2006 23:54:29 -0700
To: "Jeff Harkins" jeffh at moscow.com
Subject: [Spam] Re: [Vision2020] I thought you might be interested in this article

> On 8/30/06, Jeff Harkins <jeffh at moscow.com> wrote:
> > Andreas,
> >
> > We can have a robust conversation but please try to avoid slurs about
> > my knowledge and understanding of issues - I will not castigate or
> > denegrate your knowledge and understanding.  Otherwise, I am
> > confident that a dialogue would serve no purpose.
> 
> Jeff --
> 
> I wasn't accusing you of being an incompetent economist. I was
> accusing you of being disingenuous, or at least of providing
> chest-thumping boilerplate instead of actually talking about what is,
> in fact, a very complicated issue that involves principles at least as
> much as facts. What I was frustrated about was that I know that you
> knew what you said below when you were responding before(1):
> 
> > Social mobility studies suggest that the friction that restricts
> > movement of low income levels to higher income classes is highly
> > correlated to education (quality and level achieved) and a set of
> > transferable/marketable skills (ability to provide value added
> > services). If one wants to enhance the opportunity for moving from
> > one social class to another, improve access to quality education
> > systems. Other significant factors appear to be indifference (don't
> > care), place bound (not able or unwilling to relocate) or believe the
> > shift would require too much effort on their part.
> 
> This is true but insufficient.
> 
> First, there is, at least for the forseeable future, the labor market
> -- especially for intangibles, where there literally no disadvantage
> to offshoring  -- is deeply imbalanced in favor of large employers.
> National borders are permeable for large purchasers of labor, but
> impermeable for individuals wishing to sell their labor. I cannot
> follow my job to India, nor could an equally qualified Mexican worker
> take my job.
> 
> Second, the employer gains bargaining power by being able to subject
> low-wage employees to unacceptable levels of risk. I'm not talking
> just about insurance, though the ability of an employer to extend or
> remove an employee's access to potentially life-saving treatment is
> certainly part of it. A person making $7.00/hr has no real capacity to
> buffer themself against the potential of a lost job: even assuming
> that they have the capacity to save, fixed costs -- like energy and
> rent -- occupy a proportionately larger portion of their income. This
> makes the consequences of a drop in income, and the potential anxiety
> accompanying the threat of a drop in income, much more severe.
> 
> If I suddenly get poorer, I drop my cable Internet. If I stay poorer,
> I miss a credit card payment, or several. If I suddenly drop to zero
> income, it will likely be some time before my  landlord decides that I
> am no longer welcome, or Avista decides that I'd be better off without
> power. Even if I suddenly become grossly incapable of meeting any of
> my financial commitments, I go live in my mother's basment and likely,
> Mr. Harkins, harangue you from there, though I suspect with much less
> credibility.
> 
> Third, you might note that higher social mobility correlates with
> functional, well-administrated social welfare systems. This may have
> to do with the fact that education  is a relatively high-order need;
> one you are unlikely to be concerned with if you are worried about
> what or whether you are going to be eating tomorrow morning.
> 
> > These same studies support the notion that human will/spirit is the
> > prime element in moving from one income class to another.
> >
> > Your model would seem to imply that being a member of a society
> > entitles you to a "social equity" income class - sounds like a pitch
> > for welfare to me and not far removed from the "living wage"
> > concept.
> 
> I believe in the distinctly un-leftist principle that work should have
> something to do with wealth, which, at this moment, it does not. A
> minimum wage is not welfare. A fair wage is not welfare. A living wage
> is not welfare. Though, to warn you, I wholeheartedly recommend
> welfare as well: the presence of a robust welfare state correlates
> fairly well with social mobility. The absence of market controls does
> not.
> 
> An aside: are you aware of what monthly TANF benefits are in the state of Idaho?
> 
> >  The fact there is no reason for a business entity to pay
> > more for labor than the value of the labor in the production and
> > delivery of goods and services.
> 
> This definition is circular. The value of labor is the consensus of
> what employers are willing to pay.
> 
> And, again, you're arguing that the valuation of labor is
> intrinsically rational. Though it has historically been, there's been
> a total decoupling between productivity gains and median wage growth.
> Unless you can tell me with a straight face that the gains in
> productivity have almost entirely been restricted to the top quintile
> (and have been in the high double digits for the top quintile of the
> top quintile), the labor market is behaving in a way that appears to
> be at odds with any rational valuation of labor.
> 
> > Thus, unless the employee
> > contributes to the value of the enterprise (marginal revenue product
> > exceeds marginal cost), there is no reason to employ that
> > individual.  And over time, unless that individual enhances their
> > value (e.g., added or improved skills, lower error rate), there is no
> > basis for increasing the wage compensation of that individual.
> >
> > The fact is though - very little can stop the cream from rising to
> > the top.
> 
> I don't mean to discount the importance of personal accomplishment,
> but the history of "self-made men" is one of the merely well-off
> transforming themselves into the obscenely wealthy. Bill Gates'
> parents were millionaires. J.P. Morgan inherited a ten million dollar
> fortune. Henry Ford's parents owned one of the largest farms in
> Michigan. E.I. DuPont was descended from French nobility.
> 
> Andrew Carnegie's family, though, was pretty much broke. There's one for you.
> 
> > Persistence and determination, coupled with observation and
> > ingenuity will nurture a robust opportunity for individuals to move
> > through the social stratums. There seems little substitution for
> > effort and achievement.
> 
> This is a statement of faith as much as it is a statement of fact. I
> believe in individual acocmplishment, and I believe in the strength of
> markets, but I don't believe in the infallability of markets. This is
> the same sort of magical thinking disguised as economic theory that,
> for instance, brought us the Laffer Curve.
> 
> > You seem to confuse achievement with consumption. Why would you
> > define the "American Dream" in the context of a gold-plated Rolls
> > Royce?  The American Dream that I subscribe to is built on the notion
> > that "if you are willing to make the necessary sacrifices and
> > efforts, you have a great likelihood that you can be what you want to
> > be. In this world, there is no free lunch.
> 
> The economic system in this country is a gaming table where certain
> people are betting their pocket change and others are betting their
> lives. While I don't recommend the equal distribution of money and
> misery, the idea that both groups are rational economic actors in
> exactly the same sense is a convenient pretense and very little more
> -- and the ways in which the working poor cannot make what would
> otherwise be rational economic decisions are being exploited, very
> much to their detriment.
> 
> -- ACS
> 
> (1) This is not a very well-constructed sentence.
> 
> > I've read volumes about the captains of American Industry. I've
> > carefully selected the recommended biographies.
> >
> > At 11:03 AM 8/29/2006, you wrote:
> > >On 8/28/06, Jeff Harkins <jeffh at moscow.com> wrote:
> > >>Bill,
> > >>
> > >>Here is a simple thought for you to ponder ...
> > >>
> > >>The ultimate force that assures that competitive behavior and free
> > >>choice will provide a check on greed is that there is nothing that
> > >>can prevent you from becoming the next CEO earning $200 million - you
> > >>simply have to be willing to commit to that agenda and be willing to
> > >>make the sacrifices necessary to achieve your goal.
> > >
> > >This is utter nonsense, Jeff. As an economist, you should know
> > >full-well that it's utter nonsense.
> > >
> > >Social mobility has declined since the 1970s. 42% of people born in
> > >the lowest income quintile die in the lowest income quintile. 24% move
> > >up a quintile. Less than 5% reach the top income quintile. Likewise,
> > >36% of people in the top income quintile remain in the top income
> > >quintile. Note, also, that this is lifetime social mobility --
> > >including the expected increase in wages over a lifetime. This is a
> > >problem, both in terms of social equity and in terms of efficiency:
> > >talent is spread more widely than income, and we are insufficiently
> > >capitalizing on the talents of our low-income citizens.
> > >
> > >For God's sake, Jeff, social mobility is higher in Finland, Norway,
> > >Germany, France, Canada, and Denmark. Only Britain has a lower degree
> > >of social mobility than the United States. The "American Dream", at
> > >least insofar as the "American Dream" involves becoming a
> > >multi-billionaire capable of gold-plating his Rolls Royce, is, in the
> > >21st century, a collective hallucination on the part of the American
> > >people.
> > >
> > >>Yes indeed - you could be the CEO of WalMart and you could then
> > >>restructure that company or any other multinational firm as you see
> > >>fit - as long as you satisfy the return on capital demands of the
> > >>shareholders and the expectations of the capital markets.
> > >>
> > >>It really is that simple.
> > >>
> > >>You might consider reading the biographies of Dupont, Firestone,
> > >>Ford, Hughes, Vanderbilt, Osborne - even Gates (to name a few) to
> > >>gain a sense of how this is possible.
> > >
> > >You might want to consider reading the biographies of Paris Hilton,
> > >John E. Du Pont George W. Bush, Edsel Bryant Ford. You might then want
> > >to take a chance with the biographies of the second generation of
> > >robber barons: the children of Astor, Morgan, Carnegie, and
> > >Vanderbilt. Then you might take a moment to remember that Ford was a
> > >vocal pro-fascist who used his considerable wealth to promote very
> > >little other than anti-Semitism. Then you might take a moment to
> > >consider the social good acomplished by ridiculous and unprecedented
> > >concentration of wealth in the hands of a small number of people.
> > >
> > >-- ACS
> > >
> >
> >
> >
> 
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