Laidoff

[phor]

Re: Laidoff

You haven't thought this through very well. If there was no REGULATION, then those banks that gave themselves FAT BONUSES would have gone BANKRUPT. It was intervention that gave them the money that they used to reward themselves.

This is exactly why capitalism can't work WITH REGULATION. It isn't moral decency in business you need to worry about, that will work itself out in the marketplace. It is moral decency in government that should be priority.

I haven't thought this through?

A bailout is not regulation.
If it weren't for the bailout, you're right, they would have gone bankrupt and millions of people would have lost their jobs. What then? You think new banks would just spring up overnight to take up the slack?

People forget that it was the Bush administration that started these bailouts. They passed these bailout bills with a huge LACK of regulation. More regulation would have done nothing but help those bills by preventing the types of morally atrocious spending that was going on.

If there were no regulation (for example: minimum wage), then what would stop wal-mart from hiring at $1 an hour and providing no health benefits?
If there were no regulation, then there would be nothing to force wal-mart to hire union employees, so there would be no recourse that the employees would have against getting screwed by management. Obviously $1 an hour is exaggerated, but if they could find the lowest amount they could pay employees and still function, they would. How would that complete lack of moral decency work itself out in the marketplace? You think people would stop shopping at wal-mart just because they decided to under-pay their employees? I don't.

The ideals you are advocating do work in small business, but in the corporate world, free market ideals simply don't work without complete moral discretion.
It's just too easy for them to edge out competition.
The only other answer is governmental regulation.
At least with government the people have a means of recourse against officials who are acting inappropriately.

 

[Johnny]

Re: Laidoff

If there were no regulation, then there would be nothing to force wal-mart to hire union employees, so there would be no recourse that the employees would have against getting screwed by management. Obviously $1 an hour is exaggerated, but if they could find the lowest amount they could pay employees and still function, they would. How would that complete lack of moral decency work itself out in the marketplace? You think people would stop shopping at wal-mart just because they decided to under-pay their employees? I don't.

The ideals you are advocating do work in small business, but in the corporate world, free market ideals simply don't work without complete moral discretion.
It's just too easy for them to edge out competition.
The only other answer is governmental regulation.
At least with government the people have a means of recourse against officials who are acting inappropriately.

12 pages down the line and the free market vs worker rights debate went nowhere.

 

[trashX]

Re: Laidoff

workers going on strike might work with the walmart situation. So thats your "workout of moral decency" right there.

 

[AeroJonesy]

Re: Laidoff

workers going on strike might work with the walmart situation. So thats your "workout of moral decency" right there.

Hard to go on strike when you aren't in a union.

 

[Euthyphro]

Re: Laidoff

A bailout is not regulation.
If it weren't for the bailout, you're right, they would have gone bankrupt and millions of people would have lost their jobs. What then? You think new banks would just spring up overnight to take up the slack?

People forget that it was the Bush administration that started these bailouts. They passed these bailout bills with a huge LACK of regulation. More regulation would have done nothing but help those bills by preventing the types of morally atrocious spending that was going on.

Yes. New banks would spring up in place of the others. That's simple. Not overnight but not every bank in the US had over extended themselves like those that were asking for bailout money. If you want you can read Lewis' (CEO of Bank of America's) Testimony about how Bernake and Paulson, the people regulating the banks, coerced him to keep his mouth shut on the banking situation pre-bailout. That is, not to report to his shareholders, the very people he was supposed to be answering to. You're right though these scam artists are exactly who should be in charge of the economy. Why not just give them a key to Fort Knox while were at it. They can just magic up some prosperity with that kind of gold.

Also who said anything about Bush or Obama? I don't care what color of fascist it is. Blue fascist, or red fascist it doesn't matter.

If there were no regulation (for example: minimum wage), then what would stop wal-mart from hiring at $1 an hour and providing no health benefits?
If there were no regulation, then there would be nothing to force wal-mart to hire union employees, so there would be no recourse that the employees would have against getting screwed by management. Obviously $1 an hour is exaggerated, but if they could find the lowest amount they could pay employees and still function, they would. How would that complete lack of moral decency work itself out in the marketplace? You think people would stop shopping at wal-mart just because they decided to under-pay their employees? I don't.

If Wal-Mart could hire for $1 an hour unemployment would decrease. Those people who are currently making $0 an hour would get a $1 raise. Then they could at least eat Ramon noodles instead of garbage from the dumpster.

The ideals you are advocating do work in small business, but in the corporate world, free market ideals simply don't work without complete moral discretion.
It's just too easy for them to edge out competition.
The only other answer is governmental regulation.
At least with government the people have a means of recourse against officials who are acting inappropriately.

Central banking did not exist until the Bank of England was founded in 1694. Do you really think that economies weren't able to succeed up until this point? You might want to note that Holland at the time was the glory of Economic growth and also the only country in Europe that had a basic free market. Coincidence?

Cheers

 

[AeroJonesy]

Re: Laidoff

Aren't there other threads on the financial crisis?

Props to Corneo for being up front with his boss and hopefully saving someone else from getting the axe.

 

[phor]

Re: Laidoff

workers going on strike might work with the walmart situation. So thats your "workout of moral decency" right there.

Without a union, "going on strike" is called "getting fired".
They'll just replace you with someone who is willing to work for that little.

Yes. New banks would spring up in place of the others. That's simple. Not overnight but not every bank in the US had over extended themselves like those that were asking for bailout money.

The difference is size. Eventually other banks would fill in, yes.
But in the mean time millions of people would be out of work. Unemployment suddenly spiking that high would affect everyone, not just those involved with the failed bank.

You're right though these scam artists are exactly who should be in charge of the economy. Why not just give them a key to Fort Knox while were at it. They can just magic up some prosperity with that kind of gold.

Who said anything about letting scam artists be in charge of the economy? How does regulation help them achieve this? If the lawmakers constructing the legislation allow it to happen, the people can "fire" them and replace them with someone who won't. That's the beauty of government regulation, the people ALWAYS have a means of recourse.

If Wal-Mart could hire for $1 an hour unemployment would decrease. Those people who are currently making $0 an hour would get a $1 raise. Then they could at least eat Ramon noodles instead of garbage from the dumpster.

How would decreasing wages suddenly mean more jobs? The current workers would have to take a huge pay cut or get fired and replaced. Either way it's the same amount of jobs.

Central banking did not exist until the Bank of England was founded in 1694. Do you really think that economies weren't able to succeed up until this point? You might want to note that Holland at the time was the glory of Economic growth and also the only country in Europe that had a basic free market. Coincidence?

Cheers

Again, you're ignoring the glaring difference in size.
Were there billion dollar companies with hundreds of thousands of employees back then?
There's an enormous difference in the effect it will have on a nation's economy between a hundred workers out of a job and a hundred thousand workers out of a job when a company fails. And if you can prevent that from happening with careful regulation, the risk of economic fallout decreases.

I completely and utterly believe in free market principals when it comes to small business.
Ease of entry and rampant competition are the driving force.
Both of those fall apart in the corporate world though.
The initial investment to form a competing company is often so astronomical that it would take decades for another company to fill in the gaps left by a failed corporation. The economic consequences of a failed corporation are oftentimes simply too large to let the market take its course. (IMHO)

 

[Euthyphro]

Re: Laidoff

How would decreasing wages suddenly mean more jobs? The current workers would have to take a huge pay cut or get fired and replaced. Either way it's the same amount of jobs.

Its simply supply and demand. Companies would be willing to hire more people at a lower rate than they would at a higher rate. Thus allowing a natural wage rate would decrease unemployment.

Again, you're ignoring the glaring difference in size.
. . . if you can prevent that from happening with careful regulation, the risk of economic fallout decreases.

So what you're saying is that the larger and more complex an economy is the more likely it is that a few individuals will be able to regulate it properly. Counterintuitive? And what exactly is this magic number where regulation becomes effective. How large does an economy have to be before the free market breaks down and fails. What causes that fail?

The economic consequences of a failed corporation are oftentimes simply too large to let the market take its course. (IMHO)

What are the consequences exactly of a failed corporation? You've talked about unemployment, but bailout money hasn't stopped unemployment in the US from reaching something near a 20 year high. So what exactly are you talking about?

 

[PFSS]

Re: Laidoff

But it was definitely very tough to see other people get let go when they did not see it coming. They laid off very good engineers that have been working for the same company for over 30 years. Some people looked devastated.

Damn - I know how you feel. My project just got canned and everyone on it is now out of a job. I'm in a similar position to you but the rest of the guys are in a bit worse shape - almost all have kids and the one guy who doesn't has a mortgage that until last week was well within his means to pay, unfortunately a 30% deposit doesn't help much when you have no job.

You're an Engineer? What sort and what are you looking to go back to study? Just wondering as I'm a Structural/Bridge Engineer, also seriously looking at going back to school/retraining, but just have to decide what to do. I was looking at accountancy but it seems traveling with that might be difficult (I intend to be able to work in both he US and the UK, possibly elsewhere too).

 

[Johnny]

Re: Laidoff

Its simply supply and demand. Companies would be willing to hire more people at a lower rate than they would at a higher rate. Thus allowing a natural wage rate would decrease unemployment.

That's not really correct. A company will only hire as many workers as it has work for.

For example if you run a painter company and you have a construction job requiring 10 men to work there for 4 months. You charge the construction company $100 an hour per painter. $50 goes to paying for the painter yourself and $50 is your profit. Now if a painter only cost you $1 an hour you would not be able to get 20 or 30 painters because there's only room for so many workers per job. Now you could say that the company could find more jobs then for the additional painters but if the company already makes a profit on every hour that a painter works then they are already taking every job they can and as many painters as they can.

The same is true for walmart. They only need so many people working in the store and getting workers cheaper does not mean that they will hire more people. It just means that the people who own the store can pocket more money to buy boats and houses for.

 

[PFSS]

Re: Laidoff

That's not really correct. A company will only hire as many workers as it has work for.

For example if you run a painter company and you have a construction job requiring 10 men to work there for 4 months. You charge the construction company $100 an hour per painter. $50 goes to paying for the painter yourself and $50 is your profit. Now if a painter only cost you $1 an hour you would not be able to get 20 or 30 painters because there's only room for so many workers per job. Now you could say that the company could find more jobs then for the additional painters but if the company already makes a profit on every hour that a painter works then they are already taking every job they can and as many painters as they can.

But then you might have a lot of people in your area who would like to hire painters for various purposes but look at the cost of $100/hour (split $50/$50 as you suggest) and decide that they don't want their house/whatever repainted *that* much. However if the price was $50/hour (split $25/$25) you might get twice as many people deciding to paint their stuff and so you'll be employing twice as many people.

The same is true for walmart. They only need so many people working in the store and getting workers cheaper does not mean that they will hire more people.

Not necessarily - there are the people who are essential for the bare bones of running the store, among the low paid these would be the shelf stackers and the cashiers. However Walmart might like to employ other people to make the customers shop more enjoyable - greeters, helpers and baggers. If the cost of hiring these people is too high for the benefit they think they will get then they won't hire them, if the cost is low enough they will. I know that one thing I really notice in the US is that those sorts of stores have a much larger staff than in the UK (which has a much higher minimum wage and more expensive benefits) - in the UK there are rarely baggers and I don't think I have ever seen a greeter.

 

[Garbad_the_Weak]

Re: Laidoff

That's not really correct. A company will only hire as many workers as it has work for.

For example if you run a painter company and you have a construction job requiring 10 men to work there for 4 months. You charge the construction company $100 an hour per painter. $50 goes to paying for the painter yourself and $50 is your profit. Now if a painter only cost you $1 an hour you would not be able to get 20 or 30 painters because there's only room for so many workers per job. Now you could say that the company could find more jobs then for the additional painters but if the company already makes a profit on every hour that a painter works then they are already taking every job they can and as many painters as they can.

The same is true for walmart. They only need so many people working in the store and getting workers cheaper does not mean that they will hire more people. It just means that the people who own the store can pocket more money to buy boats and houses for.

And likewise, fewer laborers will bother with $1 an hour, decreasing supply. At least, they would if they wouldn't starve if they don't take what they can get, which throws everything off.

 

[Johnny]

Re: Laidoff

might have a lot of people in your area who would like to hire painters for various purposes but look at the cost of $100/hour (split $50/$50 as you suggest) and decide that they don't want their house/whatever repainted *that* much. However if the price was $50/hour (split $25/$25) you might get twice as many people deciding to paint their stuff and so you'll be employing twice as many people.

Great so now we have twice as many people that need to be managed, twice as much work that needs to be managed and the profit to the company is exactly the same as before. Except that now twice as many things can go wrong and now they need to hire a few more management people to manage the extra jobs and workers which will actually reduces the over all profit.

Not necessarily - there are the people who are essential for the bare bones of running the store, among the low paid these would be the shelf stackers and the cashiers. However Walmart might like to employ other people to make the customers shop more enjoyable - greeters, helpers and baggers. If the cost of hiring these people is too high for the benefit they think they will get then they won't hire them, if the cost is low enough they will. I know that one thing I really notice in the US is that those sorts of stores have a much larger staff than in the UK (which has a much higher minimum wage and more expensive benefits) - in the UK there are rarely baggers and I don't think I have ever seen a greeter.

Greeters and baggers? are you ****ting me? You can't go to the store without needing someone to stop you at the door to go "hello"? and baggers? seriously. They need staff to bag your groceries? What's next? Do Americans need people to chew their food at McDonald's?

I would be ashamed if I had to stand around while someone bagged my groceries. Get the **** out of my way I'l bag my own groceries. Go back to school or something

 

[trashX]

Re: Laidoff

whats wrong with baggers and greeters, college kids earning a few bucks(not only college kids ofc) apart from that johnny, if there are 2 stores, 1 where you get greeted and your bags packed and 1 where you dont why would you want to go to the latter? Its just another way for a store to be more competetive

 

[Johnny]

Re: Laidoff

I'd go to the store with cheaper groceries because they didn't have to spend money on greeters and baggers.

 

[phor]

Re: Laidoff

What are the consequences exactly of a failed corporation? You've talked about unemployment, but bailout money hasn't stopped unemployment in the US from reaching something near a 20 year high. So what exactly are you talking about?

And you don't think that would have went any higher without the bailouts? A 20 year high? Think about an all time high... What would that have done to our economy? It's a snowball effect because the vast majority of our economy is based on predictions or "futures".

Millions of people lose jobs, they can't pay their mortgages or car loans, stock markets see this trend and suddenly stocks for companies in these areas slump. Investors get angry, so Management goes into damage control mode, slimming down the company so that investors don't lose money. Then companies that rely on these markets like parts manufacturers, home improvement stores, etc... see demand decrease, so they have to begin to downsize. That trend just continues on and on.

Compare that to what happens if a private local business goes bankrupt. They aren't tied to the stock market, so their bankruptcy doesn't have the ability to quickly affect other areas of the economy. Plus, it would be quite easy for someone else to get a loan to start a business to pick up the slack from the failed business if the demand is still there. So it may not affect the economy at all, even in the short term.


If you want a magic number for when I believe free market principals begin to fail, I already explained that.
I think it's as soon as a company goes public and begins participating in the stock exchange. aka. the Corporate World.
Once a company gets that large and has such a large financial backing from investors, it's very difficult for competition to continue to drive free market principals in a lot of market segments.

Not necessarily - there are the people who are essential for the bare bones of running the store, among the low paid these would be the shelf stackers and the cashiers. However Walmart might like to employ other people to make the customers shop more enjoyable - greeters, helpers and baggers. If the cost of hiring these people is too high for the benefit they think they will get then they won't hire them, if the cost is low enough they will. I know that one thing I really notice in the US is that those sorts of stores have a much larger staff than in the UK (which has a much higher minimum wage and more expensive benefits) - in the UK there are rarely baggers and I don't think I have ever seen a greeter.

Regardless of if they hire more people or not (which I still don't think they would, but they might), the vast majority of the workers are still being completely exploited and having to live off pennies while the management is rolling in money. And they can do virtually nothing about it because there isn't really any competition for wal-mart that could drive them into applying moral business practices.








@ corneo - What are you planning on studying when you head back to school?

 

[trashX]

Re: Laidoff

I'd go to the store with cheaper groceries because they didn't have to spend money on greeters and baggers.

i highly doubt a store would hire greeters etc if they werent already on the same price level as other stores

 

[Johnny]

Re: Laidoff

i highly doubt a store would hire greeters etc if they werent already on the same price level as other stores

The money has to come from somewhere don't they?

if they have extra to spare on baggers and greeters then they could simply keep that money and then lower the prices on all groceries and take all customers that way.

 

[trashX]

Re: Laidoff

true. but i dont believe that the cost of a few baggers and greeters devided by the all the groceries would result in such a dramatic drop in prices. just a guess by the way no calculations done

though i do agree that they certainly aren't nescesary(sp?) i dont see why you wouldnt want them

 

[Corneo]

Re: Laidoff

Damn - I know how you feel. My project just got canned and everyone on it is now out of a job. I'm in a similar position to you but the rest of the guys are in a bit worse shape - almost all have kids and the one guy who doesn't has a mortgage that until last week was well within his means to pay, unfortunately a 30% deposit doesn't help much when you have no job.

You're an Engineer? What sort and what are you looking to go back to study? Just wondering as I'm a Structural/Bridge Engineer, also seriously looking at going back to school/retraining, but just have to decide what to do. I was looking at accountancy but it seems traveling with that might be difficult (I intend to be able to work in both he US and the UK, possibly elsewhere too).

Now that I'd a few days to soak in the news I feel better for myself knowing that I will definitely make it through the next few months. My two friends on the other hand are devastated. Both of them work for the same company, they got engaged last winter and bought a house together in November. Both got let go last Wednesday. Unfortunately they got in over their heads and bought a house with virtually no deposit and have a high monthly mortgage. When they both bought a home, I felt that they were making the wrong choice because the economy had already tanked in December. Both though their jobs would be safe. To make matters worst, the town that we live in has very limited opportunities for the same type of engineering job. The are no high tech companies within 60 mi.

I worked as an electrical engineer. I'll be going back for my masters. Hopefully in two years I will have my masters and the economy will recover. In the mean time, I will take my severance package and collect unemployment untill school starts!