POLITICAL PARTY POOPER

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Posts Tagged ‘socialism’

“There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.” Henry Ford

Posted by politicalpartypooper on April 8, 2011

“There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.” Henry Ford

On January 5, 1914, Henry Ford introduced a minimum wage of $5 per day and Profit Sharing at his factories.  In all, some $10,000,000 in profit was distributed to 26,000 employees, or, an average of nearly $400 per employee.  Considering that the average wage in 1914 was approximately $592, that’s a hell of a bonus.  But the minimum wage actually doubled the average wage, sending it from $2.32 per day to $5.

The rest is history, or is it?

Why did Henry Ford make this change, and what impact did it have on the local economy, as well as the national economy?  One of the reasons Ford decided to increase wages substantially was an effort to reduce the high rate of turnover his plants were experiencing.  But another, less obvious and more mythical, but not less important reason, was to create a new market for the very product his employees were making.  If his workers wages increased, they might be able to afford to buy what they make, increasing the local economy substantially.

Republicans would say “poppycock” to this idea, and would cite rising inflation as a reason to keep wages artificially low.  They believe that when wages are increased, inflation increases, and thus, the economy is hurt.  But what if we had an actual historical example of a major, national increase in wages to guide us by?  Does such a moment exist?  Take a look at the following average wages:

1912:  $592

1914: $627

1916:  $708

Wages grew by 5% from 1912 to 1914, but by nearly 13% from 1914 to 1916.  What impact did this have on the national economy?  In short, it revived the American economy from a state of deep recession to that of a booming growth, and Fordism was born.  But let’s not forget the facts.  Henry Ford was called a socialist for paying his workers higher wages.  Sound familiar?

It should, especially if we recall what happens every time we try to raise the minimum wage in America.  The Republican argument is that rising wages is bad for the economy, because it causes inflation.  2/3 of our economy is consumer driven; in other words, the more consumers there are that are buying goods, the more the economy flows.  Historically, when the “masses” have more money to spend, America produces more.  Republicans argue that rising wages are a direct cause of inflation, and thus, a direct cause of economic retraction.

Our moment in time, where wages were significantly increased across America during a time of recession shows one result; the recession ended, economic growth ensued, and consumerism was born.  There is a myth surrounding Ford’s decision to increase wages; one that claims he foresaw what raising the wages would mean.  It isn’t true that he foresaw his wage increase allowing his workers to become his best customers, but he certainly capitalized on it once it started occurring.  So did every other business in America.  After the two World Wars, Fordism built the American Middle Class, the envy of the world.  Certainly there were times of recession, but none so deep as the Great Depression, where America was still weaning itself from the idea of an Upper Class driving the economy, as well as the current Great Recession, where yet again we find Republicans claiming that the American economy is a Supply side economy rather than a consumer driven one.

It’s hard to believe that we keep making the same mistakes.  It’s unfathomable that America would listen to a group of stodgy old men and women time after time whose sole purpose in life is to put money into the hands of the wealthy so that their economy will thrive.  Our economy is not recovering, unless you look at just one aspect of it.  Wall Street is booming, and the top 1%, as well as the top 10% are doing quite well.  Take a gander at the chart that follows:

 

 

 

 

ary, 1914…………….$627/year
average salary, 1916…………….$708/year

 

This chart shows that something disturbing was happening even before the Great Recession.  It’s even worse nowadays.  But in 2007, 87.8% of all wealth in the United States of America was owned by the top 10%, while only 12.2% was owned by the bottom 90%.  Of Financial Securities, 98.5% is owned by the top 10%, while the bottom 90% owns just 1.5%.  The next time you hear a Republican say that wealthy people pay too much in taxes, show them this chart, and ask them how it’s too much, when they own 90% of America?  In my book, if you own 90%, you should pay 90% of all taxes.  Is there a problem with my math?

A further check into statistics shows that only 1.6% of Americans will ever receive an inheritance larger than $100,000.  1.6%!  Sort of shows the so-called “death-tax” in a new light, doesn’t it?  Realistically, only 1.6% of Americans are affected by it, yet Republicans make it a major issue in every election.  Why?  Ask Paul Ryan.  Ask John Boehner.  Maybe they know.  I don’t.

The point is, Henry Ford’s instant increase of wages, and his sharing of his wealth with his employees sparked an economic growth for an entire nation during a time of deep economic retraction; a direct and lasting contradiction of Republican principles.  The economy is not now, nor has it ever been driven by the supply side.  History proves this, and Henry Ford proved it, even as his peers called him a socialist.  He became a Billionaire, not by hoarding more of his money, but by paying more.  He grew his wealth by growing that of his employees.

America needs to re-learn this lesson quickly.  If we don’t, you can expect a Depression that will make the 1930’s variety look like an economic boom.  The question is, what are you going to do about this?     Ω

 

 

 

 

 

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America: Socialist Or Not?

Posted by politicalpartypooper on April 15, 2010

I shamelessly stole this from The Middle of Nowhere. Despite the crazy rhetoric of fellows like Glenn Beck and Rushdie Limbaughlatollah, or Sarah Palin and Seanaxe Hannitito, it would seem that America isn’t really as Socialist as they claim.

Bill Quigley, Legal Director at the Center for Constitutional Rights and law professor at Loyola University New Orleans, looks at the 9 most pervasive American myths about socialism and debunks them, one by one, below (via ICH).

Myth #1. The US government is involved in class warfare attacking the rich to lift up the poor.

There is a class war going on all right. But it is the rich against the rest of us and the rich are winning. The gap between the rich and everyone else is wider in the US than any of the 30 other countries surveyed. In fact, the top 10% in the US have a higher annual income than any other country. And the poorest 10% in the US are below the average of the other OECD countries. The rich in the U.S. have been rapidly leaving the middle class and poor behind since the 1980s.

Myth #2. The US already has the greatest health care system in the world.

Infant mortality in the US is 4th worst among OECD countries – better only than Mexico, Turkey and the Slovak Republic.

Myth #3. There is less poverty in the US than anywhere.

Child poverty in the US, at over 20% or one out of every five kids, is double the average of the 30 OECD countries.

Myth #4. The US is generous in its treatment of families with children.

The US ranks in the bottom half of countries in terms of financial benefits for families with children. Over half of the 30 OECD countries pay families with children cash benefits regardless of the income of the family. Some among those countries (e.g. Austria, France and Germany) pay additional benefits if the family is low-income, or one of the parents is unemployed.

Myth #5. The US is very supportive of its workers.

The US gives no paid leave for working mothers having children. Every single one of the other 30 OECD countries has some form of paid leave. The US ranks dead last in this. Over two thirds of the countries give some form of paid paternity leave. The US also gives no paid leave for fathers.

In fact, it is only workers in the US who have no guaranteed days of paid leave at all. Korea is the next lowest to the US and it has a minimum of 8 paid annual days of leave. Most of the other 30 countries require a minimum of 20 days of annual paid leave for their workers.

Myth #6. Poor people have more chance of becoming rich in the US than anywhere else.

Social mobility (how children move up or down the economic ladder in comparison with their parents) in earnings, wages and education tends to be easier in Australia, Canada and Nordic countries like Denmark, Norway, and Finland, than in the US. That means more of the rich stay rich and more of the poor stay poor here in the US.

Myth #7. The US spends generously on public education.

In terms of spending for public education, the US is just about average among the 30 countries of the OECD. Educational achievement of US children, however, is 7th worst in the OECD. On public spending for childcare and early education, the US is in the bottom third.

Myth #8. The US government is redistributing income from the rich to the poor.

There is little redistribution of income by government in the U.S. in part because spending on social benefits like unemployment and family benefits is so low. Of the 30 countries in the OECD, only in Korea is the impact of governmental spending lower.

Myth #9. The US generously gives foreign aid to countries across the world.

The US gives the smallest percentage of aid of any of the developed countries in the OECD. In 2007 the US was tied for last with Greece. In 2008, we were tied for last with Japan.

Despite the opinions of right wing folks, the facts say the US is not on the path towards socialism.

But if socialism means the US would go down the path of being more generous with our babies, our children, our working families, our pregnant mothers, and our sisters and brothers across the world, I think we could all appreciate it.

There is a version of this article with footnotes for those interested. Quigley77@gmail.com

Let the debate begin.

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Goldman Sachs Average Wage is $500,000

Posted by politicalpartypooper on March 2, 2010

Goldman Sachs has more than 31,700 employees world-wide.  Average pay?  $500,000 per year.

If I were naive, I might say something like, “What a wonderful company to work for!”

Did you know that the President of the United States earns $400,000 per year?  Goldman Sachs must really be doing really well to be able to pay each and every one of its employees $500,000 a year.  Wow!  How can I get hired by them?

Okay.  Reality hits, and I realize that an assistant working for Goldman Sachs probably only earns $30,000, while a personal banker earns somewhere around $35 – $60,000 per year, unless he is really, really good, and then he may earn as much as $80,000 or more.  Which begs the question; with a compensation package that causes your average wage to be $500,000, why are so many earning less than $100,000?  In fact, I have to conclude that the vast majority of Goldman Sachs employees earn less than $100k, but the company could afford to pay them so much more.  After all, the AVERAGE is $500,000, which is more than ten times the national average.

What am I missing?  Where are my Republican friends to explain this to me?  Why am I having such a hard time grasping the fact that with a company average of $500k, the overwhelming majority of Goldman employees earn less than $100k?  Is this where they tell me, “Well duh!  You HAVE to pay executives 200 times more than normal workers, ‘cuz they’re WORTH EVERY PENNY!”

So I did some math.  Let’s suppose that 28,700 of Goldman’s employees earn $100k each. (Obviously, they don’t earn that much, but let’s just suppose)  That would leave 3,000 employees earning an average of $4.6 Million per year.

Who wants to bet that the number of employees earning more than $1 Million is much less than 3,000?  Where, oh where are my Republican friends?  I NEED them to explain this to me.  The numbers tell me that Goldman could afford to pay ALL of its employees $200,000 per year, and still pay its top execs more than $3 Million per year.  I know of many small business execs that would give their left arm to earn that kind of cash.  Yet at Goldman, they still have a large majority of their employees earning less than even $100k.

Please, my Republican buddies, tell me I am wrong about this.  Please loudly call me a wealth redistributing socialist who wants to punish wealthy execs by paying every employee a better wage!  Punish them to the tune of only paying them $3 Million a year!

How dare me!  How heartless of a socialist can I possibly be?  Don’t I know how much responsibility they have?  Aren’t I aware that every executive at Goldman Sachs has ten times the responsibility of the President of the United States, and they deserve to be paid like they do?  Goddamn me!  Goddamn me to hell!  You Socialist, commie, pinko bastard, you Polticalpartypooping, marxist wealth redistributor!  You are going to destroy Capitalism by paying the bottom feeders a higher wage and punishing those poor executives by only paying them $3 Million a year!

In other news, Goldman Sachs board rejected Shareholder demands for an investigation into their compensation practices, so, that ends that.  What do the Shareholders know, anyway?  They’re just the mostly middle class owners of Goldman Sachs; they wouldn’t understand complex things like executive compensation, or why there has to be such a huge chasm between bottom feeder pay and executive pay.

But, I have it on good authority that a group of shareholders has banded together. Shareholder lawsuits filed recently in New York and Delaware charge that Goldman’s compensation levels in 2009 were too high.

Shareholder lawsuits?!  Oh my God!  The owners of the company are suing?

What in the everlasting brimstonic fires that make up hell are they thinking?  Are they TRYING to destroy Capitalism?  Who, oh who, will help Goldman Sachs executives!?  Who will save them?  Where is the Republican Senator who will stand up for their rights?  Where is the Conservative talk radio host who will trumpet this discrimination to the highest heights?  Who will rescue the deprived class of Goldman Sachs executives who are beset on every side by Socialists?  Who will keep them safe from their owners?!

And if this lawsuit succeeds, what’s to stop the shareholding owners from telling the executives to start paying the bottom feeders more equitably?  Or from demanding a higher return on their investment, rather than giving so much of that profit to a select few?  Where does this madness end?!

What’s to stop shareholding owners from telling Goldman Sachs how they have to pay everyone?  Since when do we allow owners of a company to dictate to a handful of wealthy executives what they can and cannot do?

You know what that is, don’t you?

It’s…gulp…SOCIALISM!

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