Alternative to government welfare

I've already shown that the deindustrialisation in Britain was faster. I've also made it clear that, unlike elsewhere, it didn't reflect productivity and income growth. It reflected the speedy destruction of the industrial base through macroeconomic incompetence.

You continue to make no sense. We're referring to the private sector. We're not referring to subsidised industry. That came with Thatcherism, as shown by using welfare payments to further reduce wages paid.

The closest you could get is perhaps the mines. Note, however, that even here Thatcherism was motivated by conflict (essentially a revenge mission for the NUM helping to bring down previous Tory regime. And the evidence? We see again that closures weren't based on profitability issues. See, for example, Glyn and Machin (1997, Colliery Closures and the Decline of the UK Coal Industry, British Journal of Industrial Relations, Vol 35, pp 197-214). Yorkshire's closure over-targeting, for example, reflected the need to discourage solidarity

You continue to make statement without any economic comment in support. It is the case that Friedman's output was based on a fake argument with the neo-Keynesians over the Phillips Curve. I call it a fake argument as the IS/LM and Phillips Curve analysis had nothing to do with Keynes, reflecting instead the need to ensure macroeconomic consistency with microeconomic orthodoxy.

The inflation problem had already been solved, as shown by the rapid reduction prior to Thatcher's election. Clearly, however, it was painfully stupid to create a recession arguably worse than the Great Depression.

You're not making sense again.

 

Friedman and Thatcher were for keeping the pound. Friedman foresaw the problem in Greece etc..

Coal union workers destroyed the coal industry, coupled with costly regulations. You didn't produce coal cheaper then it was to import it, why should the UK pay to subsidize coal workers? Are they special?

If I posted a speech given by either one of them supporting the arguments I said and history bearer out as being right would it be worth the time finding the link? I prefer to argue with leftists that have some sense of monetary policy to be honest, but if you are willing to watch it I will go play fetch.

 

So were most folk. Bit obvious really, given the eurozone countries had not converged in economic terms.

I've presented empirical evidence that shows this is cobblers. Profitable collieries were deliberately closed. You again show that you political dogma is inconsistent with economic reality

 

How were profitable cobblers put out of business by thatcher ? Did the people stop buying shoes from them?

Not obvious to her opponents.

[video=youtube;5TPpuIslzG4]http://www.youtube.com/watch?v=5TPpuIslzG4[/video]

 

You might have to give that comedian career up! Thatcher deliberately attacked profitable companies. Strange that right wingers will go dreamy eyed about her when such coercion is so alien to the basic capitalist profit motive

 

How did she attacke them specifically. You make her skin like Godzillla lets see the proof.

 

Bit obvious: she took away their jobs, despite continued profitability. She destroyed whole communities because of a simple revenge mission

 

Couldn't name a single business huh? That didn't die because people didn't want to buy what they were selling at the price they wanted? Keep thinking about it.

Friedman and thatcher were against the euro, you new Labour Party seemed to want it if you watch the video of them.

You and I both know inflation doesn't happen in real time, there is a lag effect. Has inflation in your country ever been as stable since thatcher as before it? Seems her reforms brought some stability of you look at the data.

- - - Updated - - -

How so? Name the policy, or explain how they lost jobs please. You are just listing assertions now, and no I don't need a college textbook reference, just name the policy and examine why it killed business.

 

Given we're referring to the collapse of the manufacturing sector, you continue to be irrelevant.

Labour has always been split on Europe. There has been no efforts to join aboard the Euro, except some minor blubbering from the Lib Dems. Your knowledge of British affairs isn't high powered.

This is nonsense. The use of regressive VAT, for example, had an immediate effect on prices.

Again you ignore the reality (even though you gave data that destroyed your own argument). Inflation was falling rapidly prior to her election. It increased significantly, following the stupidity of her policies.

In your urge to use inane questions to hide from replying with any content, you fail to even understand what you're replying to. You're replying to a comment that referred to a deliberate policy of closing profitable coal mines.

 

Jumping in here because this statement caught my attention.

Low paying low skill manufacturing jobs still create "wealth" with the production of goods and contribute to the economy. Those that work in these jobs also "consume" goods and services which creates other higher paying jobs. Typically in a "modern" economy these jobs are filled by immigrant labor where these jobs "pay more" than what that person could earn doing the same work, if available, in their native country. The "immigrant" relocates to improve their standard of living and is willing to work these low paying low skill jobs that the domestic work force won't do because the domestic work force already has a higher standard of living.

Where "modern" economies fail is by employing "crony capitalism" where "protectionism" is inherent in the immigration laws that limit the flow of labor to fill the demand for labor these low paying low skill manufacturing jobs require. Crony capitalism established by "protectionism" in immigration laws drives these low paying low skill manufacturing jobs out of the "modern" economy and it has deep adverse effects on the standard of living because the gross domestic product (i.e. the wealth production of the nation) is reduced.

 

I am 100% with you on crony/government directed "capitalism"

The inefficient labor adding to the nations wealth only does so if it is subsidized or protected by crony capitalism. To the extent such jobs are allowed to pay what the international or even the domestic market values then at they are good. If minimum wage laws make those jobs illegal at market pay and causes unemployment, that is bad. The problems that unskilled labor in manufacturing pays less then the minimum wage in many of these industries people complained are losing, the only way to keep them here is to tax more efficient industries.

 

I'm no expert on"Thatcherism" but I completely agree that welfare payments result in "reduced wages" because of the taxation imposed on the person receiving the "welfare" assistance. In referring to "reduced wages" I'm referring to "net disposable income" after all taxes are paid. In the Untied States that reflects federal, state and local taxation as all of this taxation comes out of the "gross wages" of the individual. It make no real sense to me that the government (at all levels) takes money from people that they earn and then give it back to them in the form of welfare.

It makes more sense to not take the money at all so that they won't require the welfare or will require much less welfare to mitigate the the effects of poverty. The problem in the US is that we have highly unfair taxation where the tax burden for average working Americans imposed by federal, state, and local government is much higher than for high income individuals. We're imposing a much higher tax burden relative to income on low income workers, that require the welfare assistance, than we impose on high income individuals. That makes no sense at all. If nothing else we need taxation where the tax burden relative to income is the same for everyone. That alone would greatly reduce the need for welfare assistance because we wouldn't need to take so much from lower income workers that require welfare assistance.

 

We're they profitable without any protections? Did the nationalized coal industry produce coal at a lower cost then private competitors?

Answer key:

You can't name a single business and that should be super easy to do.

You agree with Thatcher and disagree with half of labour.

We agree less taxes is better for everyone but government.

You ignore the lag effect of inflation but pretend to be an economist.

Your coal mines weren't profitable without protection, which comes out of the pocket of society at large a s is spent on inefficient and often striking miners.

 

The wealthiest 1% pay 36% of our revenue burden, not counting corpeate taxes, employment taxes, regulatory compliance etc...How much more should they bear before fairness is reached in your book? They don't make 36% of income. I think your argument is stronger if you argue against discrimination of how people get paid Vs how much they are paid.

 

Yes. What part of profitability don't you understand?

 

I would make a bold statement. It isn't the "minimum wage" that is preventing these jobs from existing but a lack of the immigrant labor force that will work at these minimum wage paying jobs.

One of the proposals by "conservatives" is that all employers must verify the legal immigration status of their workers. There are employers that do hire illegal aliens to fill jobs because they can't get enough "legal" aliens to do the work. These employers pay minimum wage or above and are driven to employ illegal aliens because those are the only workers they can get. It isn't the "cost of labor" that is there problem but a shortage of "legal" immigrant labor to fill the jobs.

It would be silly today for an entrepreneur to start up a new business where they were dependent upon paying minimum wage or slightly above knowing that they can't do so with "legal" immigrants that would do the work for the pay being offered. They know for a fact that most Americans won't do this work for the wages and those that would are already employed.

I would provide a conservative estimate that tens of thousands of businesses don't exist in the United States today because of the lack of immigrant labor that will do hard work at minimum wage. A more realistic estimate would be that hundreds of thousands of businesses don't exist because of the shortage of legal immigant labor. It isn't the minimum wage that is the problem but the lack of a legal immigrant labor force that will work at those wages that is the problem.

 

For Thatcherism it was all about competition with the third world. By destroying worker bargaining power, eliminating minimum wage and further reducing wages through welfare benefits, they believed competitiveness could be maintained. Its an exceedingly ignorant stance, reflecting an inability to understand how a capital-abundant country should trade.

 

An investor pays 1/2 or less of the tax rates than a worker based upon the same income at the Federal level of taxation. A low income worker has up to 16-times the tax burden relative to income when compared to a high income individual at the State level of taxation.

I have always argued for taxation that is fair where the tax codes are identical for all individuals and even created a thread on it.

http://www.politicalforum.com/polit...iminating-crony-capitalism-taxation-us-3.html

In that thread I fundamentally created a single "exemption" for all households (similar to and inspired by the "prebate" proposed for a consumption tax) and then a flat tax on all income above that exemption amount.The "exemption" removes federal taxation for those that recieve "welfare" so we're not taking money out of their bank account and then returning it to them in welfare benefits. It also addresses the regressive taxation at the State and Local levels to some degree where the low income worker can have up to 16-times the tax burden relative to income (that 16-times comes from WA where I live that has the most regressive taxation in America).

Nothing could be more fair than a "flat exemption and flat tax rate" for every person and entity receiving income in the United States.

I do note a change in FICA/Payroll taxation that is dedicated to the Social Security/Medicare Welfare Programs that would virtually eliminate these welfare programs separately. We might mention that low and middle income households and small businesses provide viritually all of the funding for these through taxation while the wealthy pay virtually nothing and these programs are the only federal programs that have been fully funded by taxation. These programs account for about 40% of all federal revenues and the wealthy don't contribute to them today. They are also welfare programs that can be all but eliminated over time if we address the problem that created the need for the welfare assistance in the first place.

 

Agreed! Absolutely. I am all for open borders without a social welfare state. If you can afford to live here, welcome to America. It is when people can come here and not work that is the issue. I know most do, but the issue becomes problematic when a someone is on welfare because their parents can't earn the minimum wage but want to work and are getting welfare instead. Even worse when they came for the welfare b/c being poor in America is nothing like being poor in Peru.


The minimum wage does hurt jobs though, albeit inefficient ones, or training jobs only. But surely, at some price, everyone can be employed unless they are a criminal. A more important floor though is the welfare trap. That affects how quickly low end work gets filled, we can fix the demand for labor issue by allowing more immigrants, but the supply of Americans unwilling to sacrifice welfare benefits for a low paying job would remain.

 

Based upon this summary I would also agree that it hurt the workers in the UK by reducing their standard of living.

As many know, and I'm often condemned for it, I'm an advocate of laizze-faire capitalism but many miss a point when it comes to "welfare" and "laizze-faire" capitalism is that laizze-faire capitalism is relies upon equality of opportunity for the individual and we don't have that in the United States today. Invidious discrimination based upon race and gender is widespread and, because of this discrimination, it drives a need to mitigate the poverty it creates. Excluding retirees (that end up on welfare because of the low Social Security benefits) the vast majority of working age Americans are minorities and women that are subjected to discrimination in hiring and compensation in the United States.

The greatest single thing we could do to reduce the need for welfare assistance to mitigate the need for welfare for working Americans is to eliminate invidious discrimination against racial/ethnic minorities and women in the United States. Unfortunately this discrimination is not by the government and the government can't do much about it. It is based upon individual prejudice and the government cannot control the minds of the people. We do have "anti-discrimination" laws but they only address the most egregious violations were documentation exists to support a civil complaint. These cases are extremely rare.

Laizze-faire capitalism, as one of its requirements, depends upon the elimination of invidious discrimination as all individuals must be afforded equality of opportunity in the economy. Even laizze-faire capitalism would be forced to address the poverty created by this discrimination, which violates the principles of laizze-faire capitalism, and mitigate the effects of poverty created by it. Denial of equality of opportunity is a violation of the Inalienable Rights of the Person and laizze-faire capitalism is mandated to protect or mitigate against the violations of the Rights of the Person.

Now that will make many of my Libertarian friends choke but it is a fact.

 

The fact is that most working age welfare recepients are either workers at low paying jobs or individuals denied employment based predominately upon race/ethnic or gender discrimination. The percentage of people that are collecting welfare because they don't want to work is actually extremely small and all of them would be better off financially if they worked. Welfare benefits are on top of the low paying wages they would receive. It is said that a person working at minimum wage will qualify to receive enough in welfare benefits to equal $30,000 in total income but a person not working will only receive about 1/2 that amount. There is a huge motivation for the person to work based upon the welfare laws.

 

The child poverty rates documented it

I wouldn't put you in the same camp as Thatcherism. That's probably the nicest thing I've ever said to you!

The weird thing about Thatcherism is that it was actually rather similar to autonomist anarchist thinking. Rather than a focus on freedom and exchange, perceived worker power becomes key. Thus, to the autonomst, globalisation is simple a reaction to union power. It provides a means to hold the worker in check, ensuring profits are not threatened. Thatcherism ultimately followed the same tale. The worker had to be crippled in order to ensure gains from trade to be redistributed to the producer. And to help that process they were happy to use corporate welfare.

Sounds like you have much in common with the institutionalist perspective to discrimination, whereby- through organisational adaptation- inequalities of opportunity are effectively imposed on the economy. There is no means for the market to naturally eliminate the problem as, to buck prejudice in society, will provoke costs in itself. Its then not the standard coercion (such as the Marxist suggestion its about dividing the workforce in order to further exploitation), but a social restriction that partially destroys mutually beneficial exchange

 

I don't know that I'd agree with this but the inequality of opportunity is undeniable and negatively affects the economy.

The "market" is not a magic bullet for all things but there is a irony related to prejudice. Individual prejudice is predominately subconscious in nature and it adversely affects the decisions of the person.

A study in 2003 in the US reflected that when all things were equal except race that a white person was 2.4 to 3.4 times more likely to be hired than a black person and that even when the black person was "more qualified" the white person was still 1.7 times more likely to be hired. I don't believe that any of the hiring managers were "racists" but instead their decisions were adversely affected by their subconscious prejudice. They actually believed they were selecting the "best qualified candidate" in all cases when, in fact, they were not. It has to be assumed that the selection of a lesser qualified person would not produce the best results for the enterprise so the enterprise was negatively affected financially from the decision.

As I've noted I'm not an economic anarchist believing that the "market" solves all problems which is why I endorse laizze-faire capitalism that imposes regulations focused on the projections of the inalienable rights of the person. If the regulation cannot prevent the violation then it must attempt to mitigate the effects of the violation. As I noted the denial or equality of opportunity in the economy is a fundamental violation of the "Right of Equality of the Person" and while neither the government or the market can prevent invidious discrimination due to individual subconscious prejudice it can and does have a responsibility to mitigate the effects of that violation of the rights of the person.

It often bores me when people complain about "welfare" that they create the need for because of their own prejudice. Those that complain the loudest tend to be the same people that express the most prejudice.

 

I don't agree the welfare trap still exists even after the gingrich reforms. maybe TANF alone, but now when you add in SSDI, SNap, Medicaid, state run outfits, etc...in any event I forced to work for money there would be less available labor for hiring and the market will begin to self correct. You can lose a lot of these programs especially disability by getting a job. Negative income tax would work better.

Don't fall for propaganda shiva! Checkout median personal income during thatcher and PPP. They soared. Kids became poorer because their parents divorced. Divorces soared then too. Kids don't make money their parents do and single parent homes make less then intact homes. Can't blame the cultural revolution on Thatcher. This is a common statistical trick used by lefties. The other one they use for the same reason is complain about household income in the last 3o years.

 

Two employees of the same qualifications walk in. One can sue for discrimination of you fire them, one cannot. Who is more valuable objectively? These anti discrimination laws have the opposite effect. Look at the ADA employment provisions. After they passed to help people get jobs, employment among the disabled nearly went down by half.

HR departments constantly worry about lawsuits, it is no wonder that they affect hiring.

The market does correct for discrimination. Jackie Robinson is a great example. Best player in baseball for the money at the time. More were following him. You want to lose money and games or do you want to hire blacks? Same economics at play for more "mundane" work.