The economic challenge facing Democrats

The Boston Globe ^ | November 25, 2006 | Robert Kuttner

[A. Pole]

ITEM: On Election Day, ballot initiatives to raise the minimum wage passed overwhelmingly in all six states where the activist group ACORN and the labor movement made them a priority. These included the bellwether states of Missouri, Montana, and Ohio, where the wage initiatives contributed to a surge in turnout and helped progressive Democrats win narrow Senate victories. Since only about 7 percent of workers are helped directly by a higher minimum wage, the vote was widely seen as a symbolic expression of distress by the broad, working middle class seeking a change in economic priorities.

Item: The group Trade Watch reported that nearly every Democrat who picked off a Republican-held seat campaigned as a critic of trade deals like NAFTA that are less about exporting goods and more about making it easier for American business to export jobs. Even the still-Republican lame-duck Congress recently denied President Bush the authority to make more of these trade deals.

Item: This past week, corporate takeovers set an all time record of $60 billion in two days. In these takeovers, the new owners borrow most of the money, pocket a lot of it, and often lay off workers and cut pension plans to pay the increased interest costs, before selling all or part of the company back to the investing public. These financial plays not only enrich the super-rich and leave ordinary people more vulnerable, but they also add debt and risk to the entire economy.

Item: Robert Rubin, the Democrats' most influential economic adviser, recently gave a high-profile speech to the Economic Club of Washington, calling for tax increases. Rubin, chairman of the executive committee of the banking conglomerate Citigroup, wants to use the proceeds mainly for budget balance. [...] Rubin is a passionate free-trader.

[...]

[Hardastarboard]

Quite possibly the worst piece of legislation in a couple of decades.

A piece of your post, corrected. I've seen essays that indicate that SOX has cost businesses and investors more than any amount of fraud it could have possibly ever prevented. And frankly, from what I've seen, it isn't very good at that, anyway. Sarbanes and Oxley got us all in the shorts with this legislation.

[ClearCase_guy]

Are you saying that slave trade should not have been banned?

You embarass yourself.

[Northern Yankee]

Too true!

[L98Fiero]

"Well said comrade!"

Uh-huh. You appear to be the one supporting yet more governemnt controls of people and business. You are the "comrade" on this thread.

It never fails to amaze me the number of people who post socialist idea after socialist idea all the while claiming to be conservative. I have a sneaky feeling that if the liberals went pro-life, half of FR would start posting at DU.

[A. Pole]

"Are you saying that slave trade should not have been banned?"

You embarrass yourself.

He, he. You are ducking the issue. Slave trade was a free market thing! It was nasty interfering governments that put an end to the slave trade.

[A. Pole]

I have a sneaky feeling that if the liberals went pro-life, half of FR would start posting at DU.

Pro-life, pro-family. Abandon "gay" and atheist agenda. End mass illegal immigration. Put the interests of working people over "free" trade and corporations. End nation building and Wilsonian adventures.

Yes, this is a recipe for getting Reagan Democrats, social and paleo conservatives back.

Republican Party would shrink to the country club Republicans and Objectivists. (Unfortunately neocons would move to the Democratic Party too, because the power would be there)

[Extremely Extreme Extremist]

Never mind it was a rat admin that pushed NAFTA....

Uh, NAFTA was born under Poppy Bush.

[ClearCase_guy]

Slave trade was a free market thing!

I support free markets. You interpret this as support for slavery. Nice talking to you. Bye.

[Chuck_101]

You really do embarrass yourself.

Trading in slaves was banned. So was trading in cocaine. So was trading in automatic weapons. A free market means unfettered trade in legal items. it does not imply that one may trade in anything one chooses.

[A. Pole]

I support free markets. You interpret this as support for slavery. Nice talking to you. Bye.

Bye to you too. I will give you an example how free market leads to slavery:

1. If you have full freedom of contract, people can put their freedom as a collateral for a loan.

2 When they default on payments, they become slaves and can be sold.

This is the way where a significant part of slavery in ancient Rome came from.

Similar example were Athens:

[...]Before the introduction of coined money the peasant farmer borrowed commodities and repaid the loan in kind, and … was probably able to meet the obligation without great difficulty; but after the introduction of coined money the situation became decidedly more difficult…he must take a loan of money to purchase his necessary supplies at a time when money was cheap and commodities dear. When a year of plenty came and he undertook to repay the loan, commodities were cheap and money was dear", wrote Professor Calhoun.

Unable to get out of debt, eventually bad weather or a poor harvest would bring foreclosure on their land and even bind them into slavery. This enslavement grew to crisis proportions, when Solon came to Athens rescue with his "Seisachtheia" or "shaking off" of burdens. Personal slavery was no longer allowed as security for debts. He canceled such existing debt contracts; and gave back land which had been seized. Farmers who had been sold into slavery abroad by those to whom they owed money were "bought" back and returned to Athens. [...]"
(A Brief History of Interest)

[A. Pole]

Trading in slaves was banned. So was trading in cocaine. So was trading in automatic weapons. A free market means unfettered trade in legal items.

By definition it is the government who decides what is legal. If free market means trade in legal items then you ALWAYS have free market. You've been hoisted by your own petard !!!

[dearolddad]

Well said comrade! Low wage is good for you.

And who gets to decide how much I pay my employees?

[conservatism_IS_compassion]

sgtbono2002

Nothing starts the inflationary spiral like raising the minimum wage.

Well said comrade! Low wage is good for you.

Do you want the "minimum wage" to be set higher than your own current wage?

IOW, do you want somebody to pass a law saying that you have to demand a raise or you will quit? If you want to do that, nobody is stopping you.

You may consider that your job can't be replaced by machinery and/or outsourcing, and therefore that your job is secure as long as no one is allowed to do it for less money than you are allowed to accept. And that your boss will be able to pass the cost along to his customers. And perhaps that is true - for you.

But in the real world, people start out at a lower wage and over time they are rewarded for learning how to be reliable and useful. In the real world, the lowest quintile of the income distribution, far from consisting of mature workers who never get a chance, is loaded with young people just starting out. Some of whom are in the bottom quintile only because they didn't graduate from college until June, and so they only worked half a year and therefore show a low "annual" wage the first year out.

More of those who were in the bottom quintile ten years ago are in the top quintile now, than are still in the bottom quintile now.

If you are an employer, why don't you be nice and just raise all your employees' wages just for fun? And if you are not an employer, why aren't you one? Since you know so much about how much labor is worth, you would have to be a smashing success at it!

[A. Pole]

And who gets to decide how much I pay my employees?

Who decides that you pay them anything at all? The government. Who coins/prints the money who use to pay? The government. Who protects you from being robbed? The government.

Tell us therefore, What thinkest thou? Is it lawful to give tribute unto Caesar, or not?
But Jesus perceived their wickedness, and said, Why tempt ye me, ye hypocrites?
Shew me the tribute money. And they brought unto him a penny.
And he saith unto them, Whose is this image and superscription?
They say unto him, Caesar's. Then saith he unto them, Render therefore unto Caesar the things which are Caesar's; and unto God the things that are God's.

Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained of God.
Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation.
For rulers are not a terror to good works, but to the evil. Wilt thou then not be afraid of the power? do that which is good, and thou shalt have praise of the same:
For he is the minister of God to thee for good. But if thou do that which is evil, be afraid; for he beareth not the sword in vain: for he is the minister of God, a revenger to execute wrath upon him that doeth evil.
Wherefore ye must needs be subject, not only for wrath, but also for conscience sake.
For for this cause pay ye tribute also: for they are God's ministers, attending continually upon this very thing.
Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.

[oblomov]

>>The best thing the Dems can do is get out of the way.

Undoubtedly, but the Dems are constitutionally incapable of this. They believe that the economy would grind to a halt if we stopped being "governed".

[A. Pole]

They believe that the economy would grind to a halt if we stopped being "governed".

If you remove the government there would be anarchy, money would disappear and your beloved market would go to hell.

[lucysmom]

if mergers are occurring, and stocks are going up, then the mergers are not harming the economy. Employees and stockholders are benefiting.

When a merger occurs, are employees added or subtracted from the new company? If employees are laid off, do they benefit? If the employees that are retained take one additional work, but not additional pay, do they benefit?

If competition is reduced, does the consumer benefit from increased service, reduced rates?

[lucysmom]

NAFTA was a truly bipartisan effort. Clinton signed it, but who were the ex-presidents standing with him at the ceremony? Who negotiated the agreement?

[oblomov]

>>Who decides that you pay them anything at all? The government.

No, my customers.

>>Who coins/prints the money who use to pay? The government.

The government does a horrible job of protecting the value of its currency.

>>Who protects you from being robbed? The government.

Hardly. It robs too, but under cover of legal procedure.

To equate free trade with slavery is ludicrous. Are you not familiar with the concept of self-ownership?

[ChurtleDawg]

the system is callecd "globalization" and yes, it has really hurt the middle class