Ralph Nader was recently interviewed by NBC and said that the US is living under “corporate fascism.” The timing is perfect if you consider these two events.
First, Fox is simply refusing to pay a sanction imposed against it by the FCC.
With the Supreme Court already agreeing to review how the FCC determines indecency in a case involving Fox, it appears that Fox has taken a rather aggressive stance concerning a different case where it was fined: it’s simply refusing to pay the fine.
The next comes from Starbucks which again is simply refusing to pay a sanction imposed against it.
In the state of California it is illegal for supervisors to share in employee tips. Starbucks recently lost a lawsuit brought by an employee who said he was forced to share a portion of his tips with his supervisor. The judgment awarded over $100 million in back tips and interest to the Starbucks baristas of California, and now several similar lawsuits are pending in other states.
Starbucks CEO, Howard Schultz, however, is more concerned about how the media is portraying Starbucks than he is about paying the back tips. Why? According to a spokesperson, Starbucks won’t be changing their practice and they won’t be paying up.
The company had this to say:
“Contrary to some reports, Starbucks has not taken money from any of its partners, and nor is there money to be refunded or returned from Starbucks.” A spokeswoman said Thursday that Starbucks Corp. has no intention of ending the practice of sharing tips among baristas and shift supervisors in California while it seeks an injunction.
I’m not saying that either of these sanctions are right. I think there should be boobies on TV. And maybe under some circumstances your supervisor should be able to partake in the bounty of your tips.
My point is that when the little guy is faced with a sanction, such as removing our hats or using our cell phones, cops taser us or shoot us into compliance. Isn’t the fact that corporations feel they’re above the law and get away with it proof enough that they are above the law and that we are living under corporate fascism?
#35–Ah Yeah==you keep equating regulating the corporations with not understanding they are a part of the economy.
What does your final sentence mean–beyond the totally obvious==”What specifically is going to drive the economic engine of this “new economy’?–Corportions, Duh!” So?
Does making the CFO criminally liable for falsified financial statements disregard the importance of corporations, or actually just the opposite? ( Duh, indeed! )
So==similar problem with no think neocon dogma of “got to be a part of the world economy or they will retaliate? HAR!! Like Mexico will sell its cantaloupes where? Like china will sell its toxic laden barbie dolls where?
I think some trade protectionism might still not be too late. We still have the worlds largest economy by gnp==lets fight with it. In any scenario, when “someone” gets hurt, its only a subset of everyone that gets hurt so who actually gets hurt if USA erects trade barriers? The investment class? the consumer? all of them?==ok, now 20 years down the road who has an economy that can actually employ them?
I don’t know if I’m “right” but my uncertainty is secure in the knowledge that what has been done so far hasn’t worked and I’m willing to try something new/old. Certain international trade arrangements also just look silly on their face, etc.
AH Yeah–who knows?
Ok, I’m back.
I couldn’t agree more about using trade sanctions against countries that engage in unfair trading practices. Like what we did to Japan and Korea when they were caught dumping computer ram a few years back. This is where “Insure a level playing field” comes in.
So some trade protectionism is not only a good thing, it’s needed. China in particular should get hit hard.
There is an easier and better solution. Make our US based companies more competitive. So when we are presented with a level playing field, our corporations deliver the best value.
We touched on some of the steps which should be taken already, like Universal Health Care, etc. These will help, but they are not the full answer.
Right in this thread we have suggested ways to remove burdens from corporations to help them become more competitive. If we continue down this road of assisting our corporations, then we will see less outsourcing because it will be financially better to keep the jobs at home.
In other words, we need to fix what is broken right now, and we can do it.
Don’t wait for any “new energy economy”. If our corporations are not competitive in the “old energy economy”, then they won’t be any more competitive in the new energy economy either.
So we are still stuck with the same conundrum. The way out is to get behind our industrial might and make it work again, not bring it to it’s knees.
It’s no fun being the one-legged man in an ass kicking contest.
Gotta go for tonight. Good as always talking to you. I’ll catch up with you mañana.
#31
It should be noted that in many cases, the elimination of tax breaks and incentives would push many companies over the tipping point in terms of moving production offshore.
How exactly would one tie compensation and stock returns to employee “benefits”? Which benefits did you have in mind?
#32
That is a ridiculous sentiment. You might as well ban corporations from selling products overseas or foreign companies from selling products in this country. In a global economy, countries must compete just as corporations do. Should we penalize corporations that move their production to a different State? What about all of the jobs lost in the origin State?
#33
How is it that the person that buys a plate for 12 cents less loses? If their competition want that sale, they should either lower their price or produce a better plate. If you go up to two lemonade stands, why should you feel obligated to pay for the higher priced lemonade? Let’s look at your UAW example. How many Americans are better off by getting cheaper, better quality vehicles? How much money has been saved in gasoline by the Prius alone? Economics is not a zero sum game. For every transaction, both people gain or else the transaction would not take place.
#34
Protectionism breeds protectionism. If we put up trade barriers, then other countries will do the same. That plate that was 12 cents cheaper will now be 12 dollars more. Sure, “only” the plate consumers are hurt, and the retail store which generates lower revenue, and the wholesaler, and the transportation companies…. In the end, restricting free trade hurts us more than it helps.
As the standard of living in the US has gone up, so has the cost of labor. The effect is that some labor intensive industries simply do not make sense in the US unless you can eliminate labor costs through automation. Look at the UK and coal. Even though one of the largest coal deposits in the world is under the British Isles, almost all coal in the UK is imported from places like the Ukraine. What happened to all those British coal miners? Think of the lost labor by importing all their coal! Instead, people that were miners had to move into other industries to get jobs. Cheap labor industries are doomed to fail in the countries with high standards of living unless they find a way of reducing labor costs. In addition, if you tie compensation to employee “benefits” you further the incentive to reduce jobs.
#38–Thomas==thanks for joining. Ah Yeah and I are so used to being “reasonable” with one another, we need a new challenging perspective. And by challenging, I mean you are just as wrong as he is. I’ll take your points in seratim.
If a company can’t exist except by tax breaks, then they don’t deserve to exist==or, their dividends should be turned over to the government? Who “owns” a business that survives on tax breaks? Certain busnesses (like many sports teams and stadiums) only make a profit based on the amount of tax breaks they get. Good deal for tax payers?? – – No.
Over and over again you here company exec’s thanking the employees for jobs well done==its all BS. Seems to me if a company is successful it is because of 15-20 happy things, one of which is good employee resource. The law should require they participate in the success of a company. Why the law? Because it won’t be done otherwise, and its only fair. So, once again, government steps in to balance the field and promote the interests of people over corporations.
You say===Protectionism breeds protectionism. /// Yes it does and that is simply another “model” on which country to country competitition can take place. USA has a huge market. THAT’S AN ADVANTAGE!!!!! Why should we give it away for nothing in this contest of “systems?” Letting other countries sell into our market without controls has resulted in a decimation of our economy. IT DOESN’T WORK!!!!!! Lets try something different and tweak it as experience recommends?
You say===In the end, restricting free trade hurts us more than it helps. /// In reality—you don’t know that and the statement stands only as an article of faith.
You say===Re Coalminers===of course either side of any issue can show horribles. The issue is how they all add up 20 years down the road. I’ve seen the LAST 20 YEARS and it hasn’t added up too well.
You say===In addition, if you tie compensation to employee “benefits” you further the incentive to reduce jobs. //// Why would that be exactly? If the reduced number of jobs increase productivity, then reduce jobs. Just the opposite might be the case however. Again, you take one specific experience and try to apply it across the board. That is dogma–not thinking.
WHATS WRONG WITH YOU REPUGNICKS???Q
WHATS WRONG WITH YOU REPUGNICKS?===you argue like gun advocates. The American economy hasn’t worked “big time” for at least 10 years and the only thing you can suggest is more of the same.
Now, why is that?
O my God I never thaught I whould agree with ralph nader on anything, but his idia about reinstating the usery law hit home. I have not been in debt for many years but there was a time when I survived on short term loans. the top rate back then was 18%. If I had to have a loan today the 25 to 30% rates whould put me in eternal debt. A fair rate of return is 20% or less for the highest risk and 10 or less for low risk. And do not let me get started on interest rates paid on savings.
uh-hunh.
Nader has a lot of very smart things to say that NO ONE ELSE IS SAYING. Alas, he is the wrong messenger for the electorate.
Hello, I’m back!
I agree with #43 and #41, but…
Ok, bobbo. I’ve only got a couple of minutes to inform you where you have gone horribly, terribly wrong.
You think that by circling the wagons and having a “my way or the highway” attitude, that the US can salvage its flagging economy.
I bet Stalin thought the same way, and for the same reasons it will fail. The Soviet system failed in large part due to the disparity between the living standards of the Soviet Union as compared to the rest of the world. It’s not that the Soviet Union wasn’t improving the standard of living for it’s people, it’s just that their standard of living relative to the rest of the world was falling behind.
Let’s look at a minute of history, shall we?
In 1950, the US GDP vs World GDP was ~48%. Now it is at best ~18%. That averages to a loss of about 0.5% per year.
Given this trend, the US will continue to fall to only ~13% of the world GDP in 10 years and ~8% in 20. This means our “bargaining power” will diminish quickly, while countries like China, Korea, etc. will become more important, and even economically more powerful than the US.
Your misinformed suggestion of Trade Isolationism will doom the US.
Read and be enlightened.
http://tinyurl.com/22ufx2
Not to mention that the growth of the US GDP as compared to World GDP is practically 0 while other countries are growing at a pace faster than 10%
http://tinyurl.com/2nhrdd
We need to compete on the World stage. It’s a whole new ballgame and you are sitting in the cheap seats.
#39
RE: Tax breaks
Depending on the situation, I probably would agree with you, but you should be aware of the consequences. If a company cannot continue production in this country without tax breaks then they will move their production somewhere where it is cost effective or, as you said, go out of business. Either way, the effect is to reduce jobs in this country. There are other edge cases which make this issue less clear cut. Farming is a good example. While I think crop subsidies are ridiculously generous, it should be noted that once you repurpose land for use other than farming, it will never be repurposed back for farming purposes.
RE: Employee benefits
I’m still unclear as to what you mean exactly by employee benefits. Are you simply talking about compensation? Are you talking about profit sharing? Obviously many companies do provide profit sharing as an enticement to keep employees. Even profit sharing has its dark side as you run into creative ways that “profit” is defined or that mysterious costs crop up of nowhere. The stores are legion of people that had shares of a movie’s profit and got nothing because while the movie made hundreds of millions is revenue, somehow all of that evaporated through costs.
RE: Protectionism
Actually, yes I do have ample evidence that protectionism works according to supply and demand principles. If you artificially restrict supply or increase costs, prices go up. Protectionism increases the cost of goods both directly to consumers as well as indirectly through increased production costs. The consumer ends up with less buying power as a result. For example, Japanese consumers pay eight times the world price for rice because of import restrictions. A recent pact between the Japanese and the US to reduce the import of Japanese memory chips caused a worldwide shortage. Prices quadrupled. Ironically, it is only a small set of big corporations that benefit from protectionism as they can charge higher prices than the market would normally provide. Protectionism is essentially saying that American consumers should reject higher quality, lower priced foreign products for previously rejected American versions.
I note that you do not seem to complain when a company moves its operations from New York to somewhere cheaper like Texas. If tariffs are good for a country, then why not a State, city, or neighborhood? Protectionism is the wrong answer. Finding ways of making American companies more competitive is the right solution.
#44
While I agree that isolationism is the wrong answer, the doom with respect to the US economy requires a bit more scrutiny. One of the big reasons the US enjoyed a huge advantage over other nations is that the American worker is far more productive. They have far more capital investment. Human capital investment is any activity used to improve the individual with formal education being the most obvious example. However, over the past ten or twenty years, other countries have caught up. Thus, while the American economy could clearly be improved, it should be noted that a big reason for the closing of the gap between the US and other countries is that other countries have improved. We should *expect* that the gap will close and thus need to do more to remain competitive.
Exactly, thomas. It is this catching up which worries me. If we continue in our complacency, not only will they catch up but pass us up.
Sorry for late response–I couldn’t connect for awhile.
Trend lines of productivity (or anything else) do not control future trends==they ONLY REFLECT it.
Ah Yeah–the American industrial base is under attack from foreign competition and your response is to immediately give up because of the trend lines? That is what you say even though I know you won’t admit to it clearly stated.
Now, when did I ever say “my way or the highway” nor recommend “trade isolationism.” WHAT I DID SAY WAS “why give away our market to other countries?”
Ah Yeah–for whatever reason you reflect what is wrong with American economic policy==hook, line, and sinker, you think free trade (sic) is the only answer. It isn’t. There are pro’s and con’s in any contesting set of policies and to think being “more protective” of the USA market is foolish, is to reach a conclusion without analysis. Substituting trend lines for not thinking only highlights the non-think going on.
Thomas==re employee compensation, I’m mostly just after the lopsided compensation to the CEO’s and correcting the unfairness/breach of faith against employees that has been going on for decades now.
I’m not against excessive compensation “as such” except that it has created a perverse sense of incentives for corporate leaders such that they hurt their own companies/USA/employees/customers
/stockholders in order to maximize their own golden parachutes, options and whatnot. Major restructuring should focus on including the abused groups and tying TOP management compensation to actual productivity in tandem with employee compensation.
The argument against this is that people are economically incentivised and the top ceo’s need these packages to be motivated. BS! People are motivated by money ANT OTHER THINGS, like being successful, respected, honored, etc. What we have created in essence is a “fuck-you, I got mine” top management environment that has hurt and is hurting our society.
Thought experiment–tie all my vague thoughts and apply it to the auto industry. Would anything I think is needed have changed Detroit into building more competitive cars? — No.
A trend line that I agree is there is as the world economy “equalizes” yes, the relative share of the USA will decline. I’m just saying we don’t have to encourage the decline as if the exact rate were ironclad.
#49–Thomas==too hard to discuss isn’t it?
Discussions without definitions go nowhere, and discussing definitions is tedious.
Still==what “absolute” protectionism are you thinking of to dismiss it? How about 50% protectionism? Does that make it less onerous or is any protectionism a violation of faith?
Then there is issue linking. There is nothing about protectionism that mandates going to war. If you equate the two, and I don’t, we won’t ever understand the others concerns==and its all definitional.
Corporate malfeasance is a real mess. Honest accounting firms could clean most of it up, but accounting firms depend on being selected. Maybe a simple law would be to require a rotating selection from a group of approved accounting firms.
Publicly traded or not, corporations are creatures of statute and have no natural rights. They can be required to perform as the government/people wish. I want the CEO to focus on his business, not his compensation. Call me crazy. I would start by capping ceo salaries to a multiple of average employee salary. Stock options are a form of fraud/insider dealing and could be greatly reformed for the benefit of all except those few benefiting by the fraud today. The devil is in the details, wont ever happen, and so forth. Not a blog worthy subject–too many definitions are needed.
#49
> too hard to discuss isn’t it?
Not particularly. ;->
RE: Protectionism
Protectionism (tariffs, trade barriers etc) is currently used in varying degrees throughout the world today and in every case it raises prices and causes political friction in whatever degree you wish to discuss. Look at the European reaction when Bush put a monstrous tariff on steel. Even a small level of protectionism will have the effect of raising prices. As with all cases, the question is whether the cost of the effect outweighs the benefit of the protectionism. If the tariffs or barriers are too small, then it will do nothing to “help” domestic corporations. If too large, it will cause price increases, shortages and might instigate retaliatory barriers further exasperating the problem.
I never said that protectionism automatically leads to war. Rather, I said that wars have been fought over protectionist policies.
RE: Corporate malfeasance
Having a reputable accounting firm clearly is not enough. Remember that Arthur Anderson was the most respected accounting firm until Enron. However, having rotating auditing firms is an interesting idea. Certainly having more than four or six accounting firms would be a good start. I’m not sure on this one. It may already be the case that they are required to rotate firms.
I simply do not see a way that you can “cap” CEO compensation. For one thing, they would simply change their title to get around it (remember Rothstein’s multiple titles such as “Food Director” from Casino?). For another, they would find ways of getting compensation that circumvents the restriction. Politicians have far more restrictions on compensation and they manage it all the time unfortunately.
I disagree that stock options are the “insider dealing” you suggested especially with startups. If you work to build a company and assume the risk, you deserve to be compensated for your efforts. Frankly, Steve Jobs deserves the billions he has made from Apple as does Gates for Microsoft. They built their company’s from nothing. Whether companies should pay ridiculous executive salaries is frankly a decision for the stock holders or owners depending on the situation. If you own a company, you are not obligated to run it cost effectively and many do not.
#51 Amen. You got it exactly right.
Well–Thomas and Ah Yea==in my opinion, you two have drunk the coolaid.
Yes, its all easy to discuss if you have a dogma where a=b=c=we can’t do anything else.
You almost comes to grips with actual analysis when you say: “As with all cases, the question is whether the cost of the effect outweighs the benefit of the protectionism.”==but you characterize the benefits as harmful========why don’t you throw in the effect of Americans keeping their jobs????? Not in the mantra?
I heard something about rotating accounting firms==don’t know if its required or just an idea from the roundtable. BUT–yes, increase the number of qualified firms and then audit them “a la spitzer” to keep them honest too. The only bigger whores I have ever seen in operation besides the annual audit firms are the brokerage houses. But then, not being ceo material, I probably don’t benefit from their insights.
Caps are easy. If you don’t see how they can be enforced, that merely shows your own corrupted view of how the system currently works and that is a big part of the problem making all reform difficult. So–install the caps, catch the crooks, change the system.
If you don’t think stock options are a type of fraud, that simply means you benefit from the practice, or more commonly and sadly, you would like to.
If you think “anyone” deserves “billions” then we need to spend some time defining and understanding what “deserves” means. Hard to do–it takes pages and books. Easy to do if your attitude is “I got mine–fuck you.”
The capitalist way. Yep, best in the world. Don’t change a thing, its perfect.
#53
RE: Protectionism
If protectionism saves jobs, then why not let States erect trade barriers? After all, New York is losing manufacturing jobs to Texas.
The ideas of protectionism goes back a long way even in the US. The Civil War was not only about slavery and State’s Rights, it was about unfair tariffs which disproportionately hurt the South. Jefferson Davis’ inaugural speech in 1861 had far more rhetoric about tariffs than it did about slavery. In the 1930’s, Congress passed the Smoot-Hawley Tariff Act which put high tariffs on a series of imports. Our trading partners did the same in retaliation with the result being a 70% drop in world trade.
Really, the core issue here is that we need to get people out low skilled jobs and into high skilled jobs. Low skilled jobs are replaceable by outsourcing, legal immigrants and automation in most industries. High skilled jobs are far more valuable on the global market and much harder to replace.
RE: CEO Caps
If they are that easy, how is it that they have done little to stem the tide of benefits gained by politicians? It is not my corrupt view, it is a realistic view that people will find loopholes to their benefit.
RE: Stock options.
Your opinion is irrational. I happen to know many people that gained and lost due to stock options. There are many, many stories of people (including myself) that have accepted lower salaries in exchange for stock options and when the company hit it big, they did well or if the company collapsed, they missed out on a better salary. There is quite a bit of risk in working for a startup or a company that goes public. Options provide a means of letting employees share in the successes of the business while shielding them from the effects of failure.
You need to clarify why exactly you think stock options are a “fraud.”
RE: Gates, Jobs etc.
Why should they not get the rewards of success in their business? They literally started from nothing. Gates dropped out of college to startup Microsoft. They are the ones that had the idea and made it a success. In addition, many of Apple’s and Microsoft’s employees did very, very well due to stock options.
No one said that everything was 100% perfect. There is always room for improvement. However, let’s try to learn from the mistakes of history.
RE: #1
Actually, my argument about States erecting trade barriers could not be more relevant. If it is good for a country, then why is not good for a State? If protecting American jobs is acceptable, then why is not acceptable to protect NY or CA jobs? All the same issues apply.
That the Founding Fathers specifically prohibited trade barriers between States in the Constitution and its resulting enormously positive effect says volumes as to why protectionism is a bad idea.
RE: #2
The reason I bring up Davis’ speech is to simply show you how long this debate has been raging.
RE: Labor
High skilled does not imply compensation. High skilled implies the human capital investment required to do the job. Sweeping floors is a low skilled job because it does not require any training to perform. An accountant is a high skilled job because it requires substantially more training to perform.
RE: CEO Caps
I think that any law that put a cap on CEO compensation would be unenforceable especially with private companies. Would it be nice if we lived in a kumbayah singing world where CEO’s would voluntarily agree to less pay and share it equally amongst employees regardless of skill or market value? Sure. However, the reality is that this will not happen. If they passed such a cap, overnight every CEO in the country would disappear and reappear with a different title to get around the cap. In addition, it would pull law enforcement resources away from the crimes they are currently investigating to attempt to peg Jello to the wall in the course of finding over-compensated CEOs.
RE: Stock options
You forget that there are number of other people that also benefit from stock price rising like other employees. How is giving a CEO stock options any different in terms of the conflict of interest you are claiming than a CEO who owns lots of the stock of the company for which they work? At the end of the day, you want to provide incentives to the CEO to make the company perform better. Companies are not obligated to pay a CEO in stock. They can compensate them based on balance sheet returns, net income or a host other metrics. That is up to the company.
RE: Gates
Keep in mind that Gates gets about $400K to $600K in salary. The vast majority of his wealth came from the value of his stock rising substantially over its base value. So, it is not as if Microsoft “paid” Gates his billions. They paid him in stock and the stock went up.
#56–Thomas==well, that varies from just wrong to choosing to be stuck in the mud.
I think our psoitions are staked out and to one degree or another, each of us simply isn’t understanding what the other says.
Dogmatic thinking is like that.
U.S. is living under some kind of Fascism. All corporation is runned some kind of fascism. For example News Corp runned by Rupert Murdoch is a fascist corporation. Just like Dictator like Joseph Stalin and Adolf Hitler, Rupert Murdoch is a dictator. Fascism is a disease taking over human civilazation!
Maria who is the Rental Agent at Sahara Palms Apts. Protected Rapist Danielle Grant, for some unknow reason.Thier relationship is unknow at this time. She was over heard laughing at how The Victim was tormented and RAPED she thought it was funny how Grant talked about victim.Ms Grant who resides at the apts. Danielle Grant 23, of Las Vegas is a RAPIST, she and another man used a date rape drug on Victim at Sahara Palms Apartments 2900 El Camino ave. apt 170, Danielle L Grant sodomized the victim with a plunger. She is lite skinned 4’6 to 4’7 and she drives a Black Ford Focus, She works as an dental assistant during day. STOP her please. Victim is too ashamed to tell Police. Memory just now coming back. Danielle L Grant MUST BE STOPED. She is a drug addict and dealer ( Lortab and Meth,weed ) sometimes works as a Vegas Escort/Prostitute when she needs money. If you have information on her criminal activities Please contact the Las Vegas Police Dept.